While USX Is ‘in Play,’ Union Seen as Vulnerable

The raid on USX Corp., the nation’s largest steel company, by some of Wall Street’s most feared corporate raiders is expected to prove a disadvantage for the United Steelworkers Union, Wall Street analysts say.

Some 22,000 union members have been off the job since Aug. 1, when negotiations over a new contract broke down. The company claims that the workers went out on strike, while the union says its members were locked out.

Some analysts have estimated that USX, which recently changed its name from U.S. Steel Corp., has so far lost between $200 million and $300 million from the work stoppage.

On Monday, USX said it was working on a plan to restructure its operations. The move followed reports that Carl Icahn, Irwin Jacobs and T. Boone Pickens Jr. had followed Australian financier Robert Holmes a Court in buying up USX shares.

Last month, Holmes a Court said he intended to buy as much as 15% of the nation’s 15th-largest corporation.

Some steel experts say the uncertainty surrounding USX’s fate may discourage the company from reopening talks with the union and could force it to take steps that would cost the union more jobs in the long run.

Longer Battle Expected

“This certainly throws in another monkey wrench,” said Paul Tiffany, assistant professor of management at the University of Pennsylvania’s Wharton School of Business.

“It diverts (USX Chairman David) Roderick’s attention,” he said, adding that the appearance of big investors would probably force management to take steps to boost profits.

Several industry experts believe that USX may stick firmly to the hard line it has taken with the steel workers.

“You could have an even longer battle,” said Merrill Lynch & Co. analyst Charles Bradford. Analysts believe that the dispute might not be resolved until early next year.

The steel workers, however, do not appear displeased with developments that have thrown USX into “play,” a term used by Wall Street to describe a company that has attracted attention from investors as a possible takeover or restructuring candidate.

“It can’t get any worse than it already is when you’re out on the picket lines in a lockout. I don’t know if it could get any worse than that,” union spokesman Gary Hubbard said.

Union Role

“They (the investors) could shake the tree, and anything that would shake the tree is looked upon with a degree of optimism by the union,” he said, but he would not say whether any speculators had contacted the union.

“The union expects to be a major player in the future of the company,” he added.

Wall Street sources said Pickens sold his stake at a profit.

Icahn and Holmes a Court were unavailable for comment. Jacobs confirmed that he holds stock in the company but otherwise refused to comment.