President Donald Trump has exercised his administration’s “golden share” authority to prevent the shutdown of a U.S. Steel plant in Granite City, Illinois.

';Golden Share' Veto

The “golden share” grants veto power over certain corporate actions, a condition set by the White House for approving Nippon Steel’s (OTC:NPSCY) $14.1 billion acquisition of U.S. Steel in June.

This power was used to stop the planned closure of the Granite City plant, which employs 800 workers, according to a report by The Wall Street Journal. Two weeks prior, the company had informed employees of the impending shutdown, despite plans to continue paying them.

Lutnick's Intervention

Commerce Secretary Howard Lutnick intervened by contacting U.S. Steel CEO Dave Burritt, stating that operations must continue. Lutnick criticized the company’s plan to pay idle workers as “nonsense” in a CNBC interview. Subsequently, the company reversed its decision, stating its goal was to maintain flexibility and continue operations at the plant.

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Union leaders had opposed the acquisition, fearing plant closures and increased imports of foreign-made steel.

"We need a future. Whatever they give us, we're willing to do the work," Craig McKey, president of United Steelworkers Local 1899 at Granite City, told the Journal.

Nippon Steel's Acquisition Of US Steel

The "golden share" authority, secured by President Trump during the June acquisition of U.S. Steel by Nippon Steel, plays a critical role in maintaining control over key corporate decisions. This power was part of a National Security Agreement signed with the U.S. Treasury and Commerce departments, ensuring that the U.S. government retains influence over the steel industry.

The acquisition, which transformed U.S. Steel into a subsidiary of Nippon Steel North America, was initially celebrated for its potential to inject billions into the American steel industry. The partnership was expected to protect and create over 100,000 jobs, as noted in a joint statement by the companies.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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