U.S. Steel Sees Higher Profits, Smaller Industry
U.S. Steel Corp. Chairman David M. Roderick borrowed a bit of Lee A. Iacocca’s vocabulary Monday in addressing his company’s annual shareholder meeting in Los Angeles. Projecting that the current quarter’s profits would be better than those just released for the first quarter and reiterating his pleasure with its 1982 acquisition of Marathon Oil, Roderick called his company the “New U.S. Steel.”
But scores of shareholders frustrated over continued meager dividends and a few dozen pickets outside the meeting were vivid illustrations that the company still must grapple with old, sad problems.
At a press conference before the meeting, Roderick predicted that steel orders would continue to improve through this quarter, that oil and gas operations would recover from severe pricing assaults and that the company’s sales, especially on the West Coast, would begin to benefit from voluntary restrictions on imports of foreign-made steel; all will help the company to improve its first-quarter earnings of $58 million, he said.
Sounding as ebullient as Chrysler Corp. Chairman Iacocca did during Chrysler’s turnaround, Roderick told shareholders: “I can confidently report that (the company) is healthy and vigorous, ready to do friendly but determined battle with our competitors and alive to the changing conditions of our domestic economy and the international marketplace.”
However, the protesters, including a few of the almost 100,000 workers whom U.S. Steel has laid off in the past five years, charged that company plans will “steal” even more U.S. jobs. Other pickets were expressing opposition to the company’s involvement in joint ventures in South Africa.
Roderick said ongoing discussions with the South Korean firm Pohang Iron & Steel Co. would “not likely” lead to U.S. Steel importing semi-finished steel. And, Roderick said, its South African partners are “on the cutting edge” of providing fair employment opportunities for that country’s non-whites.
One unhappy shareholder said the asset-selling program embarked on in 1980 makes U.S. Steel a “company in liquidation.” U.S. Steel has sold more than $2.2 billion in assets under the program, with a $500-million sales goal for this year. Roderick, however, rejected the term, saying “our asset base clearly is better balanced than ever before.”
Roderick said the company’s continued health also was dependent on receiving new concessions from the United Steelworkers in next year’s contract bargaining. He said the industry would shrink even more in the next five to six years, resulting in further plant closings.
