U.S. Steel Corp., in one of the biggest industry retrenchments in modern history, announced yesterday it is laying off 13,000 workers at outmoded plants throughout the nation.
The steel company, the largest steelmaker and 15th largest manufacturer in the nation, hinted that more layoffs could follow.
Critics have complained that the steel industry has been poorly managed over the years and has failed to modernize fast enough. But U.S. Steel maintained yesterday that the biggest problem has been the federal government. It specifically cited tax, trade and environmental policies.
In announcing the cutbacks, board chairman David M. Roderick said "the operations being terminated at this time have been noncompetitive for a variety of reasons, including operating costs, unfairly priced imports or excessive environmental spending requirements."
He warned that U.S. Steel's sprawling facilities in Chicago and Birmingham, Ala., may be the next to be closed unless there is a major turnaround in their fortunes.
The cutbacks yesterday included 16 company operations in eight states. The biggest shutdown involved the company's steel operations in Youngstown, Ohio; Torrance, Calif., and New Haven, Conn. Other cutbacks will come from shutting down facilities within plants, but not the entire plants.
U.S. Steel would not furnish a breakdown of the number of workers involved at each of the affected facilities. Yesterday's layoffs affect approximately 8 percent of the company's 166,000 workers.
Roderick said the net result of yesterday's acttion would be a "sizable loss" for the year, but he did not indicate how much money might be lost.
Roderick admitted that the decision to close the plants would place hardships on individuals and communities, but said the actions were necessary for the good of the company.
"We have had to make decisions which are unfortunate for the employes involved and the communities in which these facilities are located," he said. "We have done our utmost to keep these facilities operating, but it is now necessary to take these actions in the best interests of the remaining employes, stockholders and the longrun economic benefit of U.S. Steel."
He pledged to work "diligently" with the affected communities to convert the plants to new, job-creating activities. He did not elaborate.
Industry analysts in New York said they were not surprised by the company action, and indicated further layoffs may be coming.
"If anyone was surprised by the news, maybe he's in the wrong business," said Charles Bradford of Merrill Lynch, Pierce, Fenner and Smith. "In its third-quarter report, U.S. Steel said publicly that it would do this sometime in the fourth quarter. This was the last board meeting until shortly before Christmas, and they wouldn't do it then."
At the Pittsburgh-based headquarters of the United Steelworkers union, however, the news came as a shock. Officially, the union had no comment. Privately, however, union officials claimed they had no indication of the cutbacks until moments before the company announcement.
One union official admitted that Roderick ahd warned earlier this year that if the company could not make money out of steel it was going to get out of steel. "We didn't know if he really meant it," the official said. "I guess he means it."
U.S. Steel also is involved in chemical manufacturing, mining, bridge construction and shipbuilding.
Reaction among the top steelworker officials, according to one union source, was "confusion." He indicated the union would demand some statistical justification for the closings. "There's no numbers, no justification, no nothing," the source said.
Congress, a part of the proposal to bail out the financially ailing Chrysler Corp., is considering proposals that would force companies such as U.S. Steel to offer to sell facilities to their employes before abandoning them.
Roderick used yesterday's closing announcement to fire another broadside at the federal government. He said it "could play a major role in alleviating the difficulties currently confronting the steel industry by diligently enforcing existing U.S. trade laws, reducing excessive government regulations, modernizing current tax laws to encourage capital formationn and abstaining from unwarranted involvement in steel pricing decisions."
He said the layoff announcement "reflects the lack of government action in these areas."
For more than two years, the federal government has helped protect the domestic steel industry from import competition by imposing special duties on foreign steelmakers who try to sell in the United States below certain price levels.
In exchange for the protection, known as a Trigger Price Mechanism, the steel industry basically agreed to abandon other efforts to curb foreign imports and to pursue price moderation in keeping with government anti-inflation policies.
In the environmental area, the industtry is negotiating with the administration over a so-called "trade-off" policy on federal air quality standards. This would allow some operations of a steel plant to be out of compliance with federal environmental standards if the overall plant operation meets the standards.
Roderick said yesterday the future of some U.S. Steel facilities would depend on the outcome of continuing negotiations with the government over air pollution standards.