U.S. Steel, Koreans to Operate Cal. Plant : 1,100 Jobs Assured at Bay Area Facility; Utah Mill Faces ‘Significant Reduction’

U.S. Steel Corp. announced today it will form a joint venture with the Pohang Iron and Steel Co. Ltd. of South Korea to own, operate and modernize U.S. Steel’s plant in the San Francisco area.

Under the agreement, there will be a “significant reduction” in operations at a Utah mill, the steelmaker said.

The Pittsburg, Calif., mill will market “high quality steel and tin productions throughout the western United States,” the companies said.

The companies said the joint venture will invest more than $300 million during the next four years to modernize and expand the mill’s operations for producing cold-rolled sheets, galvanized sheets, tinplate and tin-free steel.

Employment Assured

The Bay Area mill now employs about 1,100 workers and the companies said the joint venture is “expected to assure existing employment . . . well into the next century.”

The agreement also provides for U.S. Steel to supply hot-rolled steel coils for finishing by the joint venture mill from U.S. Steel’s Geneva plant near Provo, Utah, “as required, until almost 1990.”

After President Reagan’s steel trade program expires in October, 1989, the South Korean company will become “the primary supplier of high-quality cast steel coils for finishing at the California plant,” the company said.

The Utah plant employs about 2,400 workers.

“While impact of the joint venture on Geneva would not be immediate, (U.S. Steel Chairman David) Roderick said that under current market and operating conditions, the partnership would result in a significant reduction in Utah steel-making operations by 1990,” the company said.

“The plant’s future beyond that date will be determined by then existing marketing conditions,” it said.

Government-Built Plant

The Utah mill was built by the federal government in 1944 and recently has supplied semi-finished steel for further processing at Pittsburg.

Rumors had circulated for months that U.S. Steel was negotiating with Pohang, considered one of the world’s lowest-cost steel producers, to import semi-finished steel for processing at U.S. Steel mills in the United States.

Roderick had said several times that his company was negotiating not only with the South Koreans, but also with numerous potential foreign suppliers about a variety of business opportunities.

The United Steelworkers union waged a vigorous public relations campaign against U.S. Steel’s plan in 1982 to buy semi-finished steel from British Steel Corp. for finishing at U.S. Steel’s Fairless Works on the Delaware River near Philadelphia.