Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-01-04
Steel Outlook
Bright, Except
For Facilities
BY JOHN MOODY

Associated Press Financial Writer
PITTSBURGH, Jan. 4-The
steel industry enters the new
year with bullying order books,
an assurance of labor peace and
deep concern over financing new
facilities.
Mills operated at near capacity
most Of 1856. The 1855 produc-
ton record of lit million tons
iof steel easily would have been
surpassed except for a 34-day
strike. The tieup also took its
toll in profits.
The strike lasted from July l.
until August 3 when United
States Steel Cooperation signed
new three-year contract with
the United Steelworkers. Other
big producers signed during the
next few days.
The dispute ended with IL
million union members getting
big wage boost. Industry felt
the pact gave it assurance of
three years of stability without
labor stoppages.
Policy Change
1t was the first time in the
unions 20-year history that it
agreed to a contract for more
than one year without a wage
ireopening clause.
The settlement provided an
hourly package pay increase. es-
timated by the union at As cents,
to be spread over the three years.
/ The companies said the package
would cost closer to SIS cents an
hour.
In place of the annual wage
reopening clause the pact pro-
vided for a cost-of living esca-i
lator pegged to the consumer
price index. 1t was the first
time the union agreed to an
eScalator clause.
The contract also provided a.
52-week layoff pay plan. a form
Of the so-called guaranteed
annual wage" 1t was the first
in the steel industry.
After settling the labor dis
pute, the steel companies in
creased prices an average of
$3.50 a ton, raising the COM
posite price of a ton of steel to
around $135.
Reserves Depleted
Customers took the price in
crease in stride and kept press
ing for more and more steel.
The strike depleted emergency
reserves and steelmakers began
falling further and further back
on delivery dates.
The supply Of heavy construc-
ton steel and oil country goods
was extremely critical. Toward
the end OF the year, steelmen
said orders already in sight were
enough to keep mills busy
through July, 1857.
Surveys of steel expansion
programs indicated the industry
plans to spend about SO billion
in the next three years to ex-
pand production capacity Is
million tons.
However, Arthur B. Homer,
president of Bethlehem Steel
Corp. the Nations second larg-
est producer. said recently sol
per cent expansion of steel
making capacity is necessary I'M
the next Is years if present.
economic growth continues.
Such an expansion would re-
Iquire the addition Of about eight
million tons Of capacity for each
OF the next Is years.
Tax Relief Asked
The steel industry has asked
the Government to resume al
program adopted during World
War II that permitted firms to-
depreciate their new facilities I'M
tax returns over five years in
stead of 20 years.
Such program, known as al
fast tax write of, would assure
the companies of a faster returnI
on their invested dollars and in
Grease their borrowing power. So
far the Government has been
cool to the idea.
Steelmen saw the Suez Canal
crisis as a new argument for the
fast tax write off, and some even
expressed hope that necessary
certificates for the tax benefits
would be issued shortly.
On the other side of the street.
the United Steelworkers union
encountered some friction with
IN its ranks.
The unions national conven-
ton raised President David j.
McDonald's salary from $4,000
to $4,000 a year and gave r'',c~
international officers salary
boosts.
Then the convention approved
a 81 a month dues increase rails
ing the monthly dues to SIS. Some
union locals since have drawn up
petitions asking for a special
convention to reconsider the
dues increase.
/
industrial Construction
n or mn. A.