Lourenco Goncalves, the President and CEO of Cleveland-Cliffs, has called Northeast Ohio home for over a decade, leading the Cleveland-based steel company since 2014. However, if his ambitious bid to acquire US Steel succeeds, Goncalves has announced he will relocate out of state, to Pittsburgh.
During a nearly two-hour news conference in Western Pennsylvania on Monday, Goncalves made it clear that if the acquisition is finalized, he would move to Pittsburgh, along with Cleveland-Cliffs’ key executives. “I will relocate to Pittsburgh, and US Steel will finally have a CEO residing in Pittsburgh,” Goncalves said. In addition to the CEO’s relocation, he stated that Cleveland-Cliffs’ Chief Financial Officer, Chief Operating Officer, and General Counsel would also be moving, marking a significant shift for the company.
The move would place the headquarters of the newly combined entity, Cleveland-Cliffs and US Steel, in Pittsburgh, signaling a major shift for Cleveland-Cliffs, which has deep roots in the Cleveland area. However, Goncalves emphasized that the name of the surviving entity after the merger would be United States Steel Corporation. “Cliffs will be part of United States Steel Corporation,” he explained, with Cleveland-Cliffs continuing to manage its mining operations while US Steel would oversee the steel side of the business.
This naming structure, according to Goncalves, would mirror a situation similar to when NationsBank acquired Bank of America, with NationsBank choosing to keep the Bank of America name because of its strong brand recognition. Goncalves said, “The name United States Steel Corporation must survive,” acknowledging the historic significance of the US Steel name in the steel industry.
Goncalves’ unsolicited bid for US Steel made headlines back in August 2023. His offer, which had the backing of the United Steelworkers Union, was rejected by the US Steel board but opened the door for other bids. Japanese-owned Nippon Steel stepped in with an offer that was eventually accepted by the US Steel Board of Directors. This move, however, ignited significant concerns on Capitol Hill, with both Democrats and Republicans calling on the Committee on Foreign Investment in the U.S. (CFIUS) to block the deal for national security reasons. Despite these concerns, the committee failed to take a position, leaving the final decision in the hands of President Biden, who blocked the deal on January 3.
In response, Nippon Steel and US Steel filed a federal lawsuit challenging the president’s decision, as well as a separate lawsuit against Goncalves, Cleveland-Cliffs, and the United Steelworkers Union. The lawsuits claim that Goncalves and others had coordinated illegal actions to block the merger with Nippon Steel. Cleveland-Cliffs has dismissed these claims, calling them a “desperate attempt to distract from their own failures.”
For now, Cleveland-Cliffs is unable to make a formal bid for US Steel until Nippon Steel abandons its merger agreement with US Steel, a decision that could take until June, following a deadline extension granted by the Biden administration.
Goncalves, however, remains optimistic about the potential of acquiring US Steel. He clarified that Cleveland-Cliffs cannot proceed with its offer while US Steel’s current management and board are bound by the deal with Nippon Steel. “We can’t make anything happen until the current management, the current board of US Steel make the decision to abandon the merger agreement with Nippon Steel,” he said.
Given the potential ramifications of such a move, the Greater Cleveland Partnership (GCP) is advocating for Cleveland-Cliffs to reconsider its headquarters relocation. “From its founding in 1847 to its position today as the second largest steelmaker in North America, Cleveland-Cliffs has been one of our region’s leading companies and contributors to our strong business environment,” said GCP CEO Baiju Shah. “We strongly believe its headquarters should remain in Cleveland, and we will work with others to make that case to the company.”
Cleveland-Cliffs has yet to provide additional comment or clarification on Goncalves’ statements. As the company waits for clarity on the legal status of the acquisition, the debate over where its corporate headquarters will be located remains unresolved, with significant implications for both Cleveland and Pittsburgh.