This was Dennis J. Carney's last week at work. On Sept. 30, he joined more than a hundred thousand other veterans of the steel industry who have lost their jobs in the past four years.
Of course, Carney's leave-taking is like none other in the industry. He was forced out as chairman of Wheeling-Pittsburgh Steel Corp. last month, the loser in a bitter fight to the finish with the United Steelworkers of America after he tried to impose steep wage concessions on the steelworkers last summer.
The fight had escalated rapidly since the spring, after the company and the union couldn't agree on concessions to keep the foundering company afloat.
In April, Carney took Wheeling-Pittsburgh into bankruptcy court to gain protection from creditors. In July, he abrogated the company's labor contract with the steelworkers and cut wages and benefits. That led the union to strike Wheeling-Pittsburgh in retaliation. By September, the last of the company's inventories were running out, leaving it perhaps a month or two at most to settle the labor dispute and get the plants running again.
Carney was the insurmountable obstacle to a compromise between the company and the union, and so he went.
His defeat cushioned by a reported $1 million severance agreement, Carney leaves the scene, but he remains a striking symbol of the steel industry's throes.
Dennis Carney stood out as a particularly blunt, abrupt, hard-driving executive in an industry not known for poets and philosophers. Joining the company in 1974, Carney knew where he wanted Wheeling-Pittsburgh to go and he took it there, surprising observers by his ability to raise money for a bold, $540 million program to modernize its plants, cutting costs and raising quality.
Initially, Carney also persuaded the steelworkers to accept wage concessions. In a series of agreements beginning in 1981, labor costs were cut to $18.60 an hour and then frozen at $21.40 -- below the $25 an hour that would have been reached without the concessions.
After the company filed its Chapter 11 bankruptcy petition, Carney told the union that a reduction to $15.20 an hour was essential for its survival. Not surprisingly, the union rejected that contention.
"Carney is responsible in great measure for the financial backing the company got," said James Kraft, a professor at the University of Pittsburgh's graduate school of business. "But the same personal characteristics were probably his downfall in dealing with the human side of the equation -- the steelworkers," said Kraft.
"He took a hard line," said Robert Hageman, a steel industry analyst with the Wall Street investment firm Kidder, Peabody & Co. "A lot of those things were needed. You have to have a dynamic individual who takes a hard line. You can do that up to a certain point. But you have to recognize the situation on the other side and reach out for some sort of compromise. I don't think that point was reached and that's when things began to fall apart," said Hageman.
His detractors on the union side say that Carney ran the business in a highly centralized fashion. "He was a stubborn man. Very authoritarian. He had a management style that was thoroughly outmoded and his company paid for it with terrible labor relations," says one source.
It apparently paid in other ways, too. Carney, who came to Wheeling-Pittsburgh after three decades at U.S. Steel Corp. was a steel executive of the old school, some close observers say. Steel executives raised in the boom years of the 1950s and 1960s had a confident, boomer's philosophy: Pour the steel. Someone will buy it. Don't lose sleep over markets or prices. Carney's investments, that left the company hugely in debt, were on the "hot" end of the steelmaking process, on new casters to produce cheaper unfinished steel, an area vulnerable to increasing import competition. Or they were in production of basic steel products that also were most exposed to foreign imports.
As cost pressures mounted on Wheeling-Pittsburgh, Carney assured the board that he knew the union and he knew the workers, sources say. The union was posturing and wouldn't force the company into bankruptcy, he maintained. And he was wrong.
Carney was forced out by Allen E. Paulson, who had become a major investor in Wheeling-Pittsburgh in 1983, after going public with his company, Gulfstream Aerospace (sold this summer to Chrysler Corp. for $637 million). Paulson, seeing his considerable investment headed down the drain, replaced Carney with George A. Ferris, 69, a former Ford Motor Co. vice president and head of its Route Steel operations.
Ferris' first moves have been to mend fences with the steelworkers, and he appears to be succeeding. He opened the books to the union. He announced a 10 percent cut in management salaries and layoffs in the white collar ranks. And he said he would take no salary until a new agreement has been signed. All this in an attempt to create a sense of partnership between the company and the employes, says Kraft. "Carney would never have done that," Kraft contends.
Wheeling-Pittsburgh and the steelworkers resumed negotiations this week and there now is hope on both sides for a rapid settlement. That won't guarantee the company's survival, however, Hageman and Kraft agree. Even if a new contract is reached within days, it will be a month or more before the company can get the furnaces going, product out the door and cash coming in again. Meantime, the bankruptcy petition and strike has certainly damaged the company's good will and its customers' confidence. "But there is a window to recovery . All parties will have to sacrifice -- and the union may be willing to do it now," said Kraft.
The industry's assumption is that Ferris will try to recruit a younger steel executive to head Wheeling-Pittsburgh's operations for the future. A replica of Dennis Carney isn't expected.