USX, Steelworker Talks Fail to Rivet Nation’s Attention

In decades past, the prospect of a steel strike in the midst of war and recession might have set off alarms at the White House. Presidents Truman, Eisenhower, Kennedy, Johnson and Nixon thought nothing of intervening in labor talks between the steel industry and the United Steelworkers.

But the threatened strike at USX Corp., the nation’s biggest steel producer, has caused hardly a ripple outside the company and its 18,000-strong union membership.

Analysts say the shrinkage of USX, continued overcapacity in the steel industry, the end of industrywide labor bargaining and steel’s diminished role in military hardware have combined to make the threatened strike a virtual non-event in the nation’s broader economy and war effort.

“They could be on strike for six months and I don’t think there would be any steel shortages,” said Charles Bradford, steel analyst at Union Bank of Switzerland in New York. “If they were just out a month, nobody would even know.”

Bargainers for USX, formerly U.S. Steel Corp., and the United Steelworkers union were negotiating late Thursday in Pittsburgh to reach agreement on a new labor contract for workers in six states. Both sides have made extensive strike preparations while declaring that they hope to avoid a walkout.

The initial strike deadline was midnight Thursday, but a couple of hours before the deadline arrived, union negotiators extended it 24 hours to midnight tonight.FRIDAY They cited progress in the bargaining.

The union hopes to bring USX in line with other steel producers that have restored pay cuts taken during the drastic steel industry shakeout of the early 1980s. USX management hopes to retain what analysts say is a labor-cost advantage over the competition.

The expiring contract doesn’t cover the 900 United Steelworker members at the Pittsburg, Calif., steel mill owned jointly by USX and South Korea’s Pohang Iron & Steel Co., according to company officials.

Though the outcome of the talks is key to steel industry economics, industry experts say labor trouble in steel no longer reverberates through the halls of government, war or no war.

Not only is steel a smaller part of the economy, but the steel companies no longer bargain as a group as they did until the early 1980s. Industrywide negotiations could lead to far broader shutdowns of the nation’s steel-making capacity than a strike limited to a single company.

In 1952, President Harry S. Truman seized the steel mills during an industrywide strike and ordered them reopened, an action reversed by the Supreme Court. In 1959, President Dwight D. Eisenhower invoked the Taft-Hartley Act to call off a 115-day strike. In 1962, President John F. Kennedy persuaded the steelworkers to accept a small pay hike, then ordered steel executives to Washington for a three-day dressing down when they tried to raise prices anyway.

And during the Vietnam War, Presidents Lyndon B. Johnson and Richard M. Nixon summoned steel bargainers to the White House, each time jawboning successfully against walkouts.

“Now the steel industry goes to Washington and says, ‘Please pay attention to us,’ ” said Ben Fischer, a professor at Carnegie-Mellon University in Pittsburgh. “Back then, it was, ‘Leave us alone.’ ”

White House intervention in the past was provoked by fear that steel shortages could drive up prices and trigger inflation. Such threats are remote today, because steel is available from so many companies and from other nations. The U.S. industry is operating today at about 80% of capacity.

Meanwhile, USX itself--though it is still the largest single steel company in the nation--controls just 13% of the U.S. market, compared to 24% as recently as 1974. Its total employment has tumbled to 51,000 from a peak of 171,000, despite its purchase of two big oil companies in the 1980s.

The advent of steel “mini-mills” and tough foreign competition have helped to decimate big, traditional U.S. steel companies such as USX. Small specialty steel mills now account for up to 25% of the nation’s steel production.

“USX has taken the biggest hit of all. They’ve shed an enormous amount of capacity,” said Robert Crandall, who has studied steel for many years from the Brookings Institution in Washington.

Now mostly an oil and gas company, USX has signaled an interest in selling its steel unit. On Thursday, it consented to a demand by investor Carl C. Icahn, its biggest shareholder, to issue a separate class of stock for its U.S. Steel subsidiary.

Sale of the steel operations would leave USX with what used to be known as Marathon Oil and Texas Oil & Gas, which last year accounted for about 84% of USX operating profits.

The recession only stands to worsen a steel glut, further diminishing the potential impact of a USX strike. One of steel’s biggest customers, the auto industry, has been temporarily shutting down plants by the dozens because of slumping demand for cars. The Big Three U.S. auto firms said Thursday that they don’t expect a USX strike to have any effect on them.

As for all those tanks, armored personnel carriers and other steel-laden military equipment being put to work in the Persian Gulf War, they just don’t add up to much in the context of the steel industry.

At the peak of the Vietnam War, military demand consumed just 2% of the nation’s steel output. The widespread substitution of other materials--notably aluminum--has dropped that figure to 0.1% today, according to the American Iron & Steel Institute.

USX itself is not a big player in the types of thick-plate steel needed by the military, compared to No. 2 steelmaker Bethlehem Steel, adds analyst Bradford.

“A strike will hardly cause a ripple, except in the unemployment lines in the steel towns,” said Crandall.

Times researcher Amy Harmon in Detroit contributed to this story.