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U.S. Steel's Surma in lead as trustees confront crisis

| Friday, Nov. 11, 2011

John Surma used to have only one daunting, high-profile job, as CEO of U.S. Steel.

Now he has two.

Surma, 57, of Upper St. Clair became the international face of Penn State University this week when he spoke for the board of trustees and absorbed pointed questions from reporters and students on live television about the firings of head football coach Joe Paterno and President Graham Spanier.

Surma's words put an end to speculation about the jobs, days after a child sex abuse scandal enveloped the university. But the announcement fueled a student outcry that led to near-riots lasting until early Thursday in State College.

"He did a good job under the circumstances. I don't know that he realized what he signed up for when he joined the board," said Carl Bartuch of Houston, a 1975 Penn State graduate and one of Surma's Kappa Sigma fraternity brothers. "They're going to have to repair their image. I think he can do it."

It's unclear what role Surma will take in Penn State's effort to rebuild its reputation as prosecutors pursue a 40-count child sex abuse case against former defensive coach Jerry Sandusky and perjury charges against two top administrators implicated in a cover-up dating to 2002.

Surma and other trustees declined interview requests. Those who know Surma, a husband and father of three with a deep Penn State pedigree, say he's capable, intelligent and direct but reluctant at times to share information with those viewed as outsiders, including reporters and corporate analysts.

"They picked the right guy," said older brother Vic Surma, a Mt. Lebanon dentist. "I told him Tuesday what a disgrace it is, and what a horrible, horrible thing it is to happen. He said he really couldn't discuss anything with me, and I wasn't trying to pry."

Vic Surma, 61, a starting offensive tackle in college, played from 1968 to 1970 for the Nittany Lions under Paterno. One semester, he said, he lived in a spare bedroom in Sandusky's basement. He has kept in touch with his former coach through annual golf outings to benefit The Second Mile, the charity for troubled boys that Sandusky created. It's how Sandusky found his victims, prosecutors said.

"The whole thing is very, very sad," Vic Surma said. "I have been in sort of a funk ever since the story broke."

Dylan Johnson, 21, of Marietta, a Penn State senior journalism major, said he was surprised that John Surma, a man neither he nor any of his friends had ever seen or heard of, would have such a significant impact on their university.

"I had no idea who he was," Johnson said. "You'd think someone would know who these people (the trustees) are. I had never seen any of them on campus before."

Surma graduated from Penn State in 1976 with a bachelor's degree in accounting. Two of his three sons, Eric and Jack, attended Penn State, said Vic Surma, whose son Vic Surma Jr. played wide receiver for the Nittany Lions from 2002 to 2005.

John Surma became president and CEO of U.S. Steel in 2003. He was elected to Penn State's board in 2007 and became its vice chairman in 2010. Professionally, he has held executive positions at Marathon Oil Co., Speedway SuperAmerica LLC and Marathon Ashland Petroleum LLC.

He met his wife, Becky, at Penn State. She was a "little sister" of Kappa Sigma, Surma's fraternity, said friend Geoff Wright, a Mt. Lebanon attorney. Surma played club hockey in college. Wright recalls Surma's playing hockey with a real puck in a wood-paneled fraternity house hallway.

"It would mark up the walls," said Wright, who served as the fraternity's president. "I had the unenviable task of complaining to him about it on occasion.

"He worked really hard at academics, but also liked to have a good time," Wright recalled. "He was fun to be around."

In his free time, Surma plays in a recreational hockey league in Castle Shannon. In September, he bought a $2 million stake in the Pittsburgh Penguins, which has 21 investors in addition to co-owners Ron Burkle and Mario Lemieux.

"He has the utmost integrity, and we are proud to have him as a partner," said team President David Morehouse.

Leo Gerard, president of the United Steelworkers, said Surma is a "straight shooter" and strong advocate to preserve manufacturing jobs. Gerard said Surma makes time for charitable causes, including a fundraiser in which the two participated in April to support juvenile diabetes research.

Surma and his wife are regulars on the society circuit, appearing frequently at fundraising galas for some of Pittsburgh's largest charities. He has raised money for the University of Pittsburgh Cancer Institute, UPMC Cancer Centers and Penn State, including a $5 million donation that he and his wife made in 2010 to PSU's Smeal College of Business, where Surma took classes.

"John is the only person that I know who, prior to becoming CEO, sat through a whole round of (labor union) bargaining," Gerard said. "Not just for a few sessions. We did some all-nighters, and John sat through it all."

Charles Bradford, a New York City-based analyst who studies the steel industry, said U.S. Steel faces "substantial challenges." Those include foreign competition, a global drop in demand for steel and a stock price that topped $197 a share a few years ago but now trades for about $25.

"He's generally pretty forthright," Bradford said. "But after the conference call (with analysts), the information flow is not good. For example, if they close a plant, they don't tell anyone. If they turn on a furnace (in an existing plant), they don't tell anybody."

He said that makes it difficult to see the company's direction. Bloomberg News reported this week that options traders believe U.S. Steel could be acquired as it contends with an earnings slump.

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