Steel chiefs show mild optimism Executives vow to take action against unfair competition

May 28, 1992|By Thomas Easton | Thomas Easton,New York Bureau

NEW YORK -- Top executives of the major integrated steel companies, meeting in New York yesterday, expressed muted optimism about a rebound from a disastrous 1991 and vowed to vigorously pursue complaints against dumping by overseas competitors.

Their comments came on the first day of the annual meeting of the American Iron and Steel Institute. Attending were about 600 manufacturers, buyers and suppliers, about the same number as last year but little more than half the typical level of the 1960s and 1970s when industry-wide employment was about 500,000, compared with 180,000 today.

Suggesting a glimmer of hope in what has been an awful past year and an awful decade, Walter F. Williams, chief executive of Bethlehem Steel Corp., predicted that his company's planned price increase of 1.7 percent to 2.9 percent would stick, after two increases failed.

"The timing is better," he said. "Even customers recognize our profitability has to increase."

Bethlehem's move was echoed yesterday by LTV Corp.'s steel unit and the U.S. Steel division of USX Corp., which said they would raise prices on flat-rolled steel by as much as 2.8 percent in July.

Steel manufacturers have lost money in eight of the past 10 years while consumption and pricing has regressed to levels not seen since the recession of the early 1980s, said Charles A. Corry, chairman and chief executive of USX Corp.

In 1991 alone, industry losses in the United States have been estimated at $2.2 billion. Bethlehem was bludgeoned by falling sales and prices, losing $767 million last year. The company reported losses in this year's first quarter and expects to do so for the second quarter.

"I hope we will be profitable before too long," Mr. Williams said.

Despite the continued erosion in Bethlehem's finances, Mr. Williams said at a news conference that its modernization program is continuing. A $200 million hot strip mill at Sparrows Point was completed in the fall. A $140 million galvanizing line at Sparrows Point is expected to be running by year-end.

David H. Hoag, chief executive of LTV, echoed the views of a half-dozen steel executives speaking yesterday, saying he expected the industry's future to be better. Suggesting that the industry might already be profitable thanks to a recent increase in factory use, he projected this year "will be better than last year but still far from satisfactory."

Aggravating the harsh conditions tied to a slow economy, steel industry executives said, were cheap imports that undermined volume and prices.

Bethlehem has filed claims of unfair trade in two areas of the steel business. Yesterday the company, with five other major manufacturers, USX, LTV, National, Armco, and Inland Steel, indicated it would file claims with the International Trade Commission concerning flat-rolled sheet steel, the largest category.

The moves came with the cessation of specially crafted import restraints, instituted by the U.S. government in 1984. In exchange for a limit on the amount of imported steel, major U.S. manufacturers agreed not to pursue charges that foreign-made steel was being dumped, sold in the United States below the cost of production.

Mr. Williams said U.S. manufacturers honored their obligation while the restraints were in place by improving productivity. In return, foreign producers "knew they had an obligation to wean themselves off us. We allowed them to dump for seven and one-half years without trade cases. We did our part . . . they didn't do theirs."

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