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USX Threatens Closing South Works Without Concessions

April 11, 1990

CHICAGO (AP) _ USX Corp. says it is considering shuttering the remnants of its rusting South Works steel mill, a move that would idle 700 workers, unless union officials agree to major concessions by the end of the year.

The struggling Chicago facility can’t compete with new non-union plants unless fixed costs are substantially reduced, said USX Chairman Charles Corry.

The company wants workers to give up benefits and jobs under a new labor contract to take effect Jan. 1.

But union leaders angrily rejected Corry’s plea for concessions.

″My position is they can go to hell,″ said Willie Ross, president of United Steelworkers of America Local 65, on Tuesday. ″They can close the damn thing. It comes to the point where we’re giving and giving and giving and we’ve got nothing left to give.″

South Works once employed 18,000 workers and has made steel since 1881 under USX’s U.S. Steel Co. unit and predecessor companies.

Once an integral part of Chicago’s heavy industry, the plant fell victim to recession and a slump in the domestic steel industry.

All that remains amid vacant buildings on the 574-acre facility are two electric furnaces and a mill that makes about 14.6 tons of raw steel each week. Technology there is more than a generation old.

The company has proposed eliminating a shift of workers and allowing other shops to finish business, a move that would trim union employment to 300 workers, Ross said.

Corry says the company needs the concessions to compete with new, smaller mills that make finished steel from scrap, at lower costs.

The so-called ″mini mills,″ like the non-union Nucor Corp. of Charlotte, N.C. and Northwestern Steel & Wire of Sterling, Ill., are expanding, and analysts say they’ll likely crowd the marketplace.

″That’s going to play havoc for the market,″ said Christopher Plummer, an analyst with WEFA Group in Bala Cynwyd, Pa.

″Clearly, the writing is on the wall for mini-mills to be taking a significant portion of the market in the future, and somebody’s going to have to drop out eventually,″ Plummer said.

″We want to be in it if we can earn return on our investment,″ Corry said. ″If you were to tell me we were going to lose money in structural the next three years, I’d say it’s not a business we want to be in.″

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