United States Steel Corp. yesterday announced the largest cutbacks in its 82-year history--the closing of six major plants and reductions at 24 other facilities from California to the nation's industrial heartland that will throw more than 15,000 employes permanently out of work.
U.S. Steel Chairman David M. Roderick said the company's massive retrenchment, idling 15 percent of its more than 100,000 employes, was needed to "ensure U.S. Steel's position as the nation's premier steelmaker, restore market share and lead to maximum profitability in our steel operation."
Roderick estimated the U.S. Steel closings will cost the company $1.2 billion. Tax deductions, however, will reduce costs to $650 million.
He blamed "subsidized" imports and "noncompetitive" wage rates for forcing the closing of major plants and other company facilities.
The six plants to be closed are works at Lorain-Cuyahoga, Ohio, near Cleveland; Ambridge, Pa.; Johnstown, Pa., Shiffler, in Lawrenceville, Pa., Elmira, N.Y., and Trenton, N.J.
The steel maker said it will also close ore operations in Wyoming and Utah; five coal mines in Utah, Kentucky and West Virginia, and specialty steel operations in Johnstown, Pa.; Pittsburg, Calif., and Trenton.
The company also will trim its chemicals and agrichemicals businesses in Florida and Alabama, and withdraw from the rail business.
To underscore his theme that high wages play a large part in making U.S. steel noncompetitive, Roderick pointedly announced that new, state-of-the-art facilities will be added to one plant in Birmingham, Ala., where workers agreed to concessions, while detailing major shutdowns at the South Works plant in Chicago, where the employes refused to accept changes in manning patterns and work rules.
In announcing the plant closings, Roderick emphasized that more than 10,800 employes being permanently thrown off the payroll were already on layoff at idle plants. These plants are now being closed permanently. The new closings announced yesterday will be completed by next April and will add 4,600 additional employes to the unemployment rolls.
"While the decision to suspend operations at the affected units are difficult for the employes and communities involved, they were unavoidable in light of global economic and market conditions in steel," Roderick said after the company's board of directors, meeting in Pittsburgh, approved the cutbacks.
U.S. Steel, the nation's largest steel maker, registered losses of $497 million during the first three quarters of this year. In 1982, the industry's worst year since the Depression of the 1930s, the giant company reported losses of $852 million.
The entire U.S. steel industry has been in a depressed state for the last three years, operating this year at less than 60 percent of capacity despite major sales increases. Production last month was 58.7 percent of capacity, compared with 35.9 percent for November, 1982.
Bethlehem Steel Corp., the nation's No. 2 steel maker, currently is in the midst of major retrenchment that has cut its work force by one-third over the past three years. As a result, it has cut employment costs by $1 billion a year and is now considered one of the most efficient steel makers in the United States.
Roderick also announced the breakdown of negotiations between U.S. Steel and British Steel over a joint venture that was opposed by unions in both countries. The plan was canceled after a year of talks because of "purely financial and economic reasons," he said.
Under the proposed arrangement, semi-finished slabs from British Steel's Ravenscraig Works in Scotland would be shipped to U.S. Steel's Fairless Works, near Philadelphia, for finishing. Roderick had linked the future of the Fairless Works, with its 8,000 employes, to the linkup with British Steel, though there was no announcement yesterday of a major retrenchment there.
The only good news was the announcement that U.S. Steel plans to restart its steel making and flat rolled steel operations at the Fairfield works near Birmingham, Ala., which had been closed for the past two years. This will bring 1,600 employes back to work.
Roderick said Fairfield, along with the Gary, Ind., works, will get new continuous casters--described as the most efficient way to form steel into semi-finished shapes--which will make U.S. Steel the country's largest producer of continuously cast steel.