U.S. Steel promotes Mario Longhi to president
The elevation of Mario Longhi to president of U.S. Steel Corp. by its board on Thursday provides an heir apparent to CEO John Surma and an experienced hand to make necessary cost cuts, analysts said.
The company's chief operating officer, Longhi will add president to his title effective June 1. He joined the global steelmaker in July as COO and executive vice president, becoming responsible for North American flat-rolled, tubular and Central American operations, as well as global operations services.
Surma, 58, has not said when he might retire. U.S. Steel upper management must retire by the end of the year in which they turn 65.
“He was brought in to be the number two guy. There had been no order of succession, and the board thought there should be,” said industry analyst Charles Bradford, head of Bradford Research Inc. in New York.
Longhi oversees the effort to cut costs at U.S. Steel, which is not making money amid a glut of steel and intense competition in a tough global economy. U.S. Steel lost $73 million in the first quarter on sales that dropped 13 percent to $4.6 billion.
The company's stock trades around $18 these days, or about 10 percent of its $185-a-share level in the heyday of June 2008.
“He was given the charge of a long-overdue cost reduction program. So, this may be the board saying the company is serious about it,” said Bradford.
Prior to joining U. S. Steel, Longhi was chief executive of Gerdau Ameristeel Corp., an operator of mini-mills known for their efficiency. Earlier in his career, Longhi spent 23 years with Alcoa Inc.
“I interpret Mario's title (of president) as signifying the importance of lowering the cost of operating the company. The board is preparing for tougher days,” said John Tumazos, head of Tumazos Very Independent Research in Holmdel, N.J.
“John (Surma) may rejoice at having someone help him do the cost reductions,” said Tumazos.
Longhi will remain chief operating officer and assume responsibility over risk management and human resources. He will remain based in Pittsburgh.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.