A coalition representing major automakers has called on the White House to resist any attempt by steel manufacturer Cleveland-Cliffs to acquire competitor U.S. Steel, citing concerns of potential anti-competitive pricing that could impact vehicle costs. The Alliance for Automotive Innovation, led by CEO John Bozzella, expressed apprehension over the consolidation of the two companies, which could lead to a significant market share concentration of 65 to 90% in steel used for vehicles under a single entity.
President Joe Biden has emphasized the importance of U.S. Steel remaining under American ownership, particularly amidst its proposed acquisition by Japan’s Nippon Steel for $14.9 billion. In response to Cleveland-Cliffs’ indication of a potential bid for U.S. Steel in case the Nippon Steel deal falls through, the automotive group representing manufacturers such as General Motors, Toyota, Volkswagen, and Hyundai stressed the need for alternative outcomes that avoid creating a monopoly in domestic steel production.
The alliance underscored the critical implications of a U.S. Steel and Cleveland-Cliffs merger, particularly in controlling all domestic electrical steel (e-steel) essential for electric vehicle (EV) motors and EV manufacturing. The group cautioned that such a consolidation could lead to increased steel and e-steel costs, ultimately raising the prices of finished vehicles, including EVs, for American consumers. The automaker coalition previously raised concerns with Congress, the Federal Trade Commission, and the U.S. Justice Department regarding the potential merger’s impact on steel used in vehicle components like structural frames, automotive surface panels, and EV motors.