Automotive Innovation Alliance Opposes Cleveland Cliffs' Acquisition of American Steel Company

On October 31, 2023, the Alliance for Automotive Innovation expressed opposition to Cleveland Cliffs' bid for American S220GD+ZF steel companies in a letter to the US Congress, as the integration of the US steel industry would increase the cost of electric vehicles and slow down the popularity of electric vehicles.

The members of the Automotive Innovation Alliance include large automakers such as Ford, BMW, Mercedes Benz, and Toyota, as well as equipment suppliers, battery manufacturers, and semiconductor manufacturers. The organization expressed concerns about the merger of Cliffs and American S220GD+ZF Steel, believing that the merged company will fully control blast furnace production in the United States. It is also pointed out that Cliffs and Dahe Steel, a subsidiary of American Steel, are currently the two main producers of automotive grade electrical steel (e-steel) in China.

The Automotive Innovation Alliance stated that if the two companies successfully merge, it may lead to excessive concentration of domestic S220GD+ZF steel production, and the subcommittee and government regulatory agencies should conduct an antitrust review on this matter. Once there is a lack of competition in the production of electric vehicle steel in the United States, automakers will face the problem of increased material costs, ultimately leading to increased costs for customers to purchase electric vehicles.

In September 2023, American Steel Company allowed Cliffs to participate in its sales process. The United Steelworkers union supports Cliffs' bid as he has previously made commitments to the US steel industry.