The chairman of the nation's largest steel company today called for "a more liberal interpretation" of federal antitrust laws to permit mergers and joint ventures between domestic steelmakers that could go out of business if forced to stand alone.
"The federal government should adopt a policy which helps create a more competitive steel industry capable of competing with any nation," United States Steel Corp. Chairman David M. Roderick said.
"A more liberal interpretation of the laws regarding mergers is necessary if this is to be so. If such interpretation is not possible, enabling legislation should be enacted so that the steel industry can continue to remain within the private sector as a world-class competitor," Roderick said in his capacity as chairman of the American Iron and Steel Institute, which is holding its 91st general meeting here.
Much consolidation of existing steelmaking capacity in the United States, within and across corporate lines, "could be accommodated under present statutes" if federal officials are willing to view the industry as a collection of facilities, as opposed to a group of companies, Roderick said after his speech.
A steel industry push for new antitrust laws would come only if the liberal interpretation approach "proves unworkable," he said. In any case, what is needed is a body of law reflecting the global business conditions of 1983, "not something that is in keeping with the business climate of 1890," Roderick said.
"To continue looking at the steel industry as if the only producers were domestic companies located in a very limited geographical area. . . just doesn't mean a whole lot in 1983," when domestic steel, currently in its worst economic slump since the Great Depression, is being battered by foreign competition, Roderick said.
Some Wall Street analysts agree. "What you have in a lot of cases are steel plants that have been partly modernized, but very few that have been completely modernized," said Charles A. Bradford, an analyst with Merrill Lynch, Pierce, Fenner & Smith, Inc., in response to Roderick's remarks. "That means you have some companies with great casting mills, but poor raw steel production facilities."
Such companies may not have the capital to upgrade their production plants. And their failure to make needed improvements could lead to total shutdown of their operations, Bradford said. Under eased antitrust laws, steel companies with strong production facilities, for example, could merge with those having strong casting facilities, thereby avoiding the complete shutdown of both companies, Bradford said.
Had eased antitrust laws been in effect, the nation might have been able to save some of the 200 domestic steel facilities that have been closed permanently since 1974, Bradford said.
According to other analysts here, some domestic steel companies that might benefit from merger include Jones & Laughlin Steel Corp., a subsidiary of The LTV Corp., and Republic Steel Corp.