The United States Steel Corporation (NYSE: X) is an integrated
steel producer with major production operations in the United States and Central Europe. The
company is the world's seventh-largest steel producer ranked by sales (see list of
steel producers). It was renamed USX Corporation in 1991 and subsequently United States Steel Corporation again in
2001 when the shareholders of USX spun off its steel-making assets following the acquisition of Marathon Oil in 1982. It is still the largest domestically owned integrated steel producer in the United
States, although it produces only slightly more steel than it did in 1902.
U.S. Steel is a former Dow Jones Industrial Average component listed
from April 1, 1901 to May 3,
1991. It was removed under its USX Corporation name with Navistar International and Primerica
Corporation.
History
J. P. Morgan, Elbert H. Gary, and
Andrew Carnegie founded U.S. Steel in 1901 (incorporated on February 25) by combining the steel operations owned by Andrew
Carnegie with Gary's Federal Steel Company and several smaller companies for $492 million. It was capitalized at $1.4
billion, making it the world's first billion-dollar corporation. At one time, U.S. Steel was the largest steel producer and
largest corporation in the world. The federal government
attempted to use federal antitrust laws to break up U.S. Steel in 1911, but that effort
ultimately failed. Time and competitors have, however, accomplished nearly the same thing. In its first full year of operation,
U.S. Steel made 67 percent of all the steel produced in the United States. It now produces less than 10 percent.
The Corporation, as it was known on Wall Street, always distinguished itself to investors
by virtue of its size, rather than for its efficiency or creativeness during its heyday. In 1901, it controlled two-thirds of
steel production. Because of heavy debts taken on at the company's formation — Carnegie insisted on being paid in
gold bonds for his stake — and fears of antitrust litigation, U.S. Steel moved cautiously.
Competitors often innovated faster, especially Bethlehem Steel Company, run by U.S.
Steel's former first president, Charles M. Schwab. U.S. Steel's share of the expanding
market slipped to 50 percent by 1911.
U.S. Steel's production peaked at more than 35 million tons in 1953. Its employment was greatest in 1943 (during World War II)
when it had more than 340,000 employees; by 2000, however, it employed 52,500 people. The federal government has also intervened
on other occasions to try to control U.S. Steel. President Harry S. Truman attempted to
take over its steel mills in 1952 to resolve a crisis with its union, the United
Steelworkers of America. The Supreme Court of the United
States blocked the takeover by ruling that the president did not have the constitutional authority to seize the mills.
President John F. Kennedy was more successful in 1962 when he pressured the steel
industry into reversing price increases that Kennedy considered dangerously inflationary. The federal government prevented U.S.
Steel from acquiring National Steel in 1984 and political pressure from the
United States Congress forced it to abandon plans to import British Steel slabs. It finally acquired National Steel's assets in 2003 after National Steel went
bankrupt. U.S. Steel acquired Marathon Oil in 1982, as well as Texas Oil & Gas several years later. It reorganized its
holdings as USX Corporation in 1986, with U.S. Steel (renamed USS, Inc.,) as a major
subsidiary.
At the end of the 20th century, the Corporation found itself deriving much of its revenue and net income from its energy
operations, so U.S. Steel eventually spun off Marathon and other non-steel assets (except Transtar) in October, 2001.
Labor
U.S. Steel maintained the labor policies of Andrew Carnegie, which called for low
wages and limited unionization. The Amalgamated Association
of Iron and Steel Workers union that represented workers at the Homestead,
Pennsylvania plant was, for many years, broken after a violent strike in 1892.
U.S. Steel defeated another strike in 1901, the year it was founded. U.S. Steel built the city of
Gary, Indiana in 1906, and 100 years later it remains the location of the largest
integrated steel mill in the Northern Hemisphere. U.S. Steel did reach an impasse with unions during World War I, when under
pressure from the Wilson Administration it relaxed its opposition to unions enough to allow some to operate in certain factories.
It returned to its previous policies as soon as the war ended, however, and in a 1919
strike defeated union organizing efforts by William Z. Foster of the AFL, later
a leader of the Communist Party of the United States of America.
Carnegie-Illinois Steel Corp. of U.S. Steel, South Works, Chicago—Men Tapping an Electric Furnace, Silver Gelatin Print, ca.
1945.
During the 1920s, U.S. Steel, like many other large employers, coupled paternalistic employment practices with "employee
representation plans" (ERPs), which were company unions sponsored by management. Ironically, these ERPs eventually became an
important factor leading to the organization of the United Steelworkers of America.
The Company dropped its hard-line, anti-union stance in 1937, when Myron Taylor, then president of U.S. Steel, agreed to
recognize the Steel Workers Organizing Committee, an arm of the CIO
led by John L. Lewis. Taylor was an outsider, brought in during the Great Depression to rescue U.S. Steel, and had no emotional investment in the
Company's long history of opposition to unions. Watching the upheaval caused by the United
Automobile Workers' successful sit-down strike in Flint, Michigan, and convinced
that Lewis was someone he could deal with on a businesslike basis, Taylor sought stability through collective bargaining.
The Steelworkers continue to have a contentious relationship with U.S. Steel, but far less so than the relationship that other
unions had with employers in other industries in the United States. They launched a number of long strikes against U.S. Steel in
1946 and 1959, but those strikes were over wages and benefits and not the more fundamental issue of union recognition that led to
violent strikes elsewhere.
In 1959, a 116-day strike had a significant long-term effect on
union-versus-management relations at U.S. Steel by shutting down 90 percent of total U.S. steel production. This strike opened
the door to steel imports, which had been a negligible factor before then, and the long decline of the United States steel
industry had begun. By the end of the 20th century, thousands of unionized steelworker jobs would be permanently lost due to the
effects of lower-cost imported steel.
The Steelworkers union attempted to mollify the problems of competitive foreign imports by entering into a so-called
Experimental Negotiation Agreement (ENA) in 1974. This was to provide for arbitration in the
event that the parties were not able to reach agreement on any new collective bargaining
agreements, thereby preventing disruptive strikes. The ENA failed to stop the decline of the steel industry in the
U.S.
U.S. Steel and the other employers terminated the ENA in 1984. In 1986, U.S. Steel locked out thousands of its employees when
it shut down a number of its facilities as a result of a drop in orders on the eve of a threatened strike. In addition, U.S.
Steel and other steel producers demanded extensive concessions from their employees in the early 1980s through the direction of
J Bruce Johnston, U.S. Steel executive vice president. In a letter to striking employees in 1986,
J. Bruce Johnston warned, "There are not enough seats in the steel lifeboat for everybody." In addition to reducing the role of
unions, the steel industry had sought to induce the federal government to take action to counteract dumping of steel by foreign
producers at below-market prices. Neither the concessions nor anti-dumping laws have restored the industry to the health and
prestige it once had.
The U.S. Steel Tower in downtown Pittsburgh.
Environmental record
U.S. Steel is the second-greatest corporate producer of air pollution in the United States; the company releases more than
1.26 million kg (2.8 million lbs.) of toxins annually, chiefly ammonia, hydrochloric acid, ethylene, zinc
compounds, methanol, and benzene, but including
manganese, cyanide, and chromium compounds. [1] In
2004, the city of River Rouge and the residents of River Rouge
and Ecorse, Michigan filed a class-action lawsuit against the company for “the release and discharge of air particulate matter … and
other toxic and hazardous substances.”[2] In
2005, the Illinois attorney general brought suit against U.S.
Steel for alleged air pollution in Granite City, Illinois.[3] The Company has also been implicated in water pollution and toxic waste. In
1993, the United States Environmental Protection Agency
issued an order for U.S. Steel to clean up a site in Fairless Hills,
Pennsylvania, on the Delaware River, where the soil had been contaminated
arsenic, lead, and other heavy
metals, as well as naphthalene; groundwater at the site was found to be polluted with
polyaromatic hydrocarbons and TCE. [4] In 2005, the EPA,
U.S. Department of Justice, and the State of Ohio reached a settlement requiring U.S. Steel to pay more than $100,000 in penalties and $294,000 in
reparations in answer to allegations that the company illegally released pollutants into Ohio waters.[5]
It should be noted, however, that with the exception of the Fairless Hills facility, the lawsuits concern facilities acquired
via U.S. Steel's purchase of National Steel Corporation in 2003.
Legacy
The U.S. Steel Tower in Pittsburgh, Pennsylvania is named after the company and
the company's offices take up a part of the building. The Pittsburgh Steelers
professional football team borrowed elements of its logo, a circle containing three hypocycloids, from U.S. Steel.
U.S. Steel financed and constructed the Unisphere in Corona Park, Queens, New
York for the 1964 World's Fair. It is the largest globe ever made and is one of
the world's largest free standing sculptures.
The Chicago Picasso sculpture was fabricated by U.S. Steel in Gary, Indiana before
being disassembled and relocated to Chicago
U.S. Steel donated the steel for the 'Polish Cathedral' of St. Michael's in Chicago since 90 percent of the parishioners worked at its mills.
U.S. Steel sponsored The US Steel Hour television program on
CBS.
Dividends
It is the present policy of the Board of Directors to consider the declaration of dividends
four times each year, with checks for dividends declared on common stock mailed for receipt on the 10th of March, June, September
and December. The current dividend as of 2005 is 40 cents per share. Dividends may be paid by, mailed check, direct electronic
deposit into a bank account, or be reinvested in additional shares of U.S. Steel common stock.
Facilities
U.S. Steel has multiple domestic and international facilities. Of note in the United States is Clairton Works and Edgar Thomson Works, both members of
Mon Valley Works and just outside Pittsburgh, Pennsylvania. Clairton
Works is the largest and most environmentally friendly coking facility in North America. Edgar
Thomson Plant is one of the oldest steel mills in the world. The Company acquired Great Lakes Works and Granite City
Works, both large integrated steel mills, in 2003 and is partnered with Severstal North America in operating the world's largest
electro-galvanizing line, Double Eagle Steel Coating Company, at the historic Rouge complex in Dearborn, Michigan.
U.S. Steel's largest domestic facility is Gary Works, in Gary,
Indiana; Gary is also home to the U.S. Steel Yard baseball stadium.
U.S. Steel operates Fairfield Works in Fairfield,
Alabama (Birmingham), employing 1500 people, and still operates a sheet
galvanizing operation at the Fairless Works facility Fairless Hills, Pennsylvania, employing 75 people.
Recently, U.S. Steel added facilities in Texas with the purchase of Lone Star Steel Company and is in a venture in Pittsburg, California with Pohang Iron &
Steel of South Korea.
References
- U. S. Steel's History of U. S. Steel
- Brody, David. Labor in
Crisis: The Steel Strike of 1919 (1965)
- Burn, Duncan. The Steel
Industry, 1939-1959: A Study in Competition and Planning (1961)
- Misa, Thomas J. A Nation of Steel: The Making of Modern America, 1865-1925 (1998)
- Scheuerman, William. The
Steel Crisis: The Economics and Politics of a Declining Industry (1986)
- Urofsky, Melvin I. Big
Steel and the Wilson Administration: A Study in Business-Government Relations (1969)
- Warne, Colston E. ed. The
Steel Strike of 1919 (1963) primary and secondary documents
- Warren, Kenneth. Big Steel: The First Century of the United States Steel Corporation, 1901-2001 (2001).
External links
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