By Shunsuke Tanaka
Yomiuri Shimbun Staff Writer
Eiji Hashimoto, chairman and CEO of Nippon Steel Corp., announced plans to double the crude steel production of United States Steel Corp., which it has acquired, within three to five years in a recent interview with The Yomiuri Shimbun.
The following are some of the main points of the interview, which took place on Tuesday.
Looking back on the negotiations
The Yomiuri Shimbun: It took a year and a half to acquire U.S. Steel. What were you set on achieving when you went into the negotiations?
Eiji Hashimoto: The acquisition of U.S. Steel was essential to our global strategy. It was our best way to enter the U.S. market and fully expand our business there.
We knew from the start that it would become a political issue. If the United States wants to revive its manufacturing industry, the fact that it (the acquisition) would also contribute to Japan-U.S. cooperation offers another good reason. We had faith that it would have to go through.
Yomiuri: When was the most critical moment?
Hashimoto: (When) former U.S. President Joe Biden issued an order to halt the deal. It was a political decision made with a predetermined conclusion, and we could not accept it, so we sued Biden.
Yomiuri: What will this acquisition mean for the Japanese economy?
Hashimoto: The U.S. government is making a major shift in its economic and trade policies. On its own, the United States cannot compete with China in manufacturing, but Japan can work with it. Japan is one of the few countries that can complement the United States with a comprehensive package that includes everything from materials to assembly. We must turn this into an opportunity. Japan and South Korea will be hit hardest by the rejection of free trade.
If the acquisition of U.S. Steel creates a stable supply of high-quality steel for the United States and strengthens the U.S. manufacturing supply chain, it will be the first case of cooperation between Japanese and U.S. manufacturers.
Revival of U.S. Steel
Yomiuri: What is your strategy for reviving U.S. Steel and expanding into the U.S. market?
Hashimoto: The United States has the largest steel demand of any developed country. There are no companies producing motor cores or large transformers for electric vehicles. This is because they have no high-performance electromagnetic steel sheets, so they rely on imports. By supplying these through U.S. Steel, we can enable production in the United States. Supplying high-quality steel in the United States will allow us to turn the demand for imported steel into demand for U.S. made steel.
Variable costs such as logistics are high, making it difficult to beat imported materials in terms of cost. We will improve yield and reduce costs to compete with imported materials. By increasing new investment and expanding our product lineup, we aim to double the volume of crude steel produced in the U.S. from its current level of approximately 11 million tons. This will take about three to five years.
Yomiuri: What are your thoughts on training and securing engineers and other personnel?
Hashimoto: U.S. Steel's engineers alone will not be enough to double production, so we will send over a large number of engineers from Japan. We have already sent 40 engineers, but we will probably need more than 100. In the longer term, we will also work with universities to train engineers.
Yomiuri: If the U.S. administration changes to a Democratic one, won't the golden share pose a risk?
Hashimoto: Even if the Democratic Party comes to power, they also want to revive the manufacturing industry. Expanding the promising U.S. market is the essence of our management strategy. Our goals are aligned with those of the U.S. government, so we are not concerned.
Becoming number one worldwide
Yomiuri: You have a goal of producing 100 million tons of crude steel. Tell us about your determination to become number one in the world. How will you compete with China?
Hashimoto: Arcelor Mittal S.A. (which is headquartered in Luxembourg) is currently number one in terms of overall capability, so we need to close the gap and overtake them. We have a joint venture in India, so we need to strengthen our independent operations in Europe, Thailand and other regions in order to become number one.
China exports industrial products at low prices, so we need to avoid the negative impacts (of that). To prevent China from gaining a foothold in key markets such as the United States, India, Europe and Thailand, we must take the initiative in overseas operations.
Since (Chinese companies are) state-owned, all data is centralized. We must strengthen our research and development capabilities to stay ahead in cutting-edge technology. It is impossible to prevent technology leakage if you operate in China. The best strategy is not to establish (new) operations there.
----
This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
YDN-m0000128185-1
(END) Dow Jones Newswires
July 14, 2025 03:19 ET (07:19 GMT)
Copyright (c) 2025 The Yomiuri Shimbun
Comments