U. S. Steel CEO Outlines Progress Under Steel Tariff Relief
Thomas J. Usher, chairman, CEO and president of United States Steel Corporation (NYSE: X), met today with Secretary of Commerce Donald L. Evans to discuss the company's efforts to restructure and insure the long-term competitiveness of the domestic steel industry under the protection of the remedies granted under Section 201 of the Trade Act of 1974.
"U. S. Steel has an aggressive plan in place to recover from the devastating flood of steel imports that has crippled our industry," said Mr. Usher. "But achieving these goals will require a sustained period of stable market conditions, and we are only a few months into what is designed to be a three-year program. While we work to shore up the long-term strength of our company and the steel industry, the Bush Administration must preserve the President's steel program to realize the full potential of the 201 relief. And that means standing strong against unnecessary exclusions, monitoring and enforcing excluded products to make sure that these imports are not undermining relief and continuing efforts to eliminate the root cause of the American steel crisis: excess global steel capacity."
Mr. Usher briefed Secretary Evans on numerous steps that U. S. Steel has initiated or plans to implement within the company. This confidential progress report emphasized the company's commitment to pursuing concrete and wide-ranging initiatives that will add value to the company and respond to the Administration's call to use the period of safeguard relief to enhance competitiveness.
Mr. Usher's report highlighted the steps needed to maintain world-class status for the company in the years ahead. Mr. Usher emphasized that U. S. Steel has in recent years undertaken extensive efforts to upgrade facilities, enhance efficiencies and pursue consolidation steps that will enhance value. However, the market conditions brought on by the import surge and steel crisis have hampered the company's - and the industry's - ability to raise capital and take steps critical to future competitiveness.
Mr. Usher stated that value-enhancing consolidation will be a key component of U. S. Steel's strategy going forward, and U. S. Steel is engaged in ongoing discussions regarding consolidation opportunities. The company believes that demonstrable and sustainable synergies would result from such transactions and will continue to actively pursue them.
Mr. Usher also emphasized that the company is committed to taking aggressive steps to enhance cost-competitiveness. U. S. Steel has publicly set a goal to reduce production costs for domestic operations by $30 per ton over a three-year period totaling over $300 million by completion: $10 per ton each year for 2002, 2003 and 2004. The company is on track through July 2002 to attain the yearly targeted $10 per ton savings.
In addition, Mr. Usher stressed the need to establish a progressive new labor agreement with the United Steelworkers of America to provide a meaningful reduction in operating costs and insure the company's competitiveness going forward. And he outlined detailed steps to improve quality and customer service, and to develop new products and market opportunities.
Completion of the consolidation strategy described above is subject to numerous conditions, some of which are described above. Many of these conditions depend upon actions by other parties, such as the federal government. There is no assurance that any consolidation will occur, nor any specificity concerning the terms upon which it might occur. Financial performance and results in the steel industry, including the results of U. S. Steel if any consolidation occurs, will be influenced by many factors. Likewise the attainment of the cost reduction goals is a forward-looking statement and the achievement of this goal will depend upon numerous factors, a number of which are beyond U. S. Steel's control.
In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, U. S. Steel has included in Form 10-K for the year ended December 31, 2001, as supplemented in subsequent Forms 10-Q and Forms 8-K, cautionary statements identifying important factors, but not necessarily all factors, that could influence such results.
For more information on U. S. Steel, visit our Web site at http://www.ussteel.com/.
SOURCE: United States Steel Corporation
CONTACT: Mike Dixon, +1-412-433-6860 or John Armstrong, +1-412-433-6792,
Web site: http://www.ussteel.com/
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