U.S. Steel to focus on energy, autos, profits and image remake, CEO Longhi says
Instead of relying on “one-dimensional cost cutting,” taking advantage of energy and automotive opportunities and perhaps undergoing an image remake focused on technology are key to incoming CEO Mario Longhi's plan to revive U.S. Steel Corp.
“We pretty much focused on surviving for a long time,” Longhi, now president of the nation's second-biggest steelmaker, told a group of about 200 business leaders on Thursday at a Pittsburgh Technology Council breakfast briefing.
Longhi, 59, who is spearheading an initiative to improve the struggling steel company's performance, provided a glimpse of what to expect as he prepares to take over from longtime CEO John P. Surma, 58, on Sept. 1. His promotion was announced last week.
Under Surma, U.S. Steel has not produced an annual profit in four years, and its stock price is near a five-year low.
Longhi, who is viewed by analysts as having the background to help reverse the company's slide, said no cost-cutting targets will be disclosed for Project Carnegie, the initiative he is leading to help turn around the company. And he emphasized the importance of technology and creating opportunities for increased use of steel in auto manufacturing and drilling.
The company has expanded oil and natural gas tubing production, he said. U.S. Steel spent more than $200 million on tubing projects at its Lorain, Ohio, plant, and it took full control of its McKeesport Tubular plant two years ago to take advantage of drilling demand.
On the consumption side, it uses gas in its blast furnaces and other processes, consuming 130 trillion cubic feet in North America last year.
“Our team at our research center (in Munhall) is playing a role in these activities through research and computer modeling,” he said. “That includes continued focus on optimizing the blend of fuels used in our blast furnaces to maintain the lowest carbon cost.”
Longhi began his 35-year career in 1978 as an engineer in his native Brazil before he joined Alcoa Inc. in 1982 as a construction supervisor at an aluminum refinery. He worked for Alcoa for 23 years in Brazil, the United States and Switzerland. In 2006, he was named CEO of Gerdau Ameristeel Corp., an operator of mini-mills, and joined U.S. Steel in 2012.
His background in aluminum is helping him identify growth opportunities for the steelmaker from the government's mandate that automakers meet a 54.5 mpg target by 2025.
“Having worked in aluminum for many years, I understand the importance of what the auto market represents,” Longhi said. “Competing materials like aluminum have moved aggressively for years to gain a bigger share of vehicle curb weight.”
On Wednesday, U.S. Steel met with Chrysler, which Longhi said is “pushing the boundaries of development methods.”
“We have offered them a solution that if put to use ... can probably mean a 25 percent to 30 percent weight reduction and meet the (new) standards,” Longhi said. “... It's a very exciting time for us.”
U.S. Steel is an “amazing” technology company, Longhi said, mentioning computers that guide blast furnace operation, controls for “sophisticated shapes or rolled products” and software that manages financial analysis.
“Regardless of the fact that many times the steel industry portrays itself showing just a blast furnace with flames, it is profoundly more scientific that just that,” he said.
Longhi said his review of ways to improve the company's operations and financial performance will emphasize “a new way of doing business (that stands up) under all market conditions” rather that just cost cuts.
”There is little strategic vision behind a one-dimensional cost cutting program,” he said. “Instead, we'll view this as a profitability and value enhancement initiative.”
John D. Oravecz is a staff writer for Trib Total Media.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Drops in gasoline prices won’t likely last, analysts say
- Energy companies vie for experienced workers with skills in high demand
- Energy industry says it’s on top of methane leaks, but environmentalists want oversight
- Energy Spotlight: Adam Pope
- Former athletes open businesses
- Energy-saving tactics pay off in Green Workplace Challenge
- Typewriters back in style, keeping repair shops busy
- Chevron laying off 162 workers from Moon-based unit
- U.S. Steel plans to close two plants affecting 545 workers
- North Dakota oil boom attracts crime
- Password change can block hackers from wireless cameras