Steel CEO: Trump will take strong action on imports
Pittsburgh Post-Gazette
On a day when U.S. Steel shares jumped 7 percent off of the company’s unexpectedly strong second quarter performance, president and CEO Dave Burritt said Wednesday he expects President Donald Trump will take strong action against imports in order to protect U.S. national security.
“We believe this administration understands the importance of U.S. steel to this country,” Mr. Burritt told analysts during a call discussing the $261 million second quarter profit that U.S. Steel reported late Tuesday.
“We do believe a remedy is coming. ... We do believe they’re going to go broad and they’re going to go deep,” Mr. Burritt said.
He also said the company expects to spend $1.2 billion between now and 2020 to revitalize its U.S. mills, including the Mon Valley Works in Pittsburgh. The company will spend $200 million to $250 million on the initiative this year, another $450 million to $500 million in 2018, and the balance in 2019 and 2020.
U.S. Steel provided a partial list of the projects, including nearly $3 million that has been invested in the Mon Valley so far and nearly $11 million more to be invested there by the end of the year.
Mr. Burritt said the investment will improve profit margins and reliability, and will enable the company to produce about 1 million more tons of steel than the 10 million tons it expects to produce this year.
Wall Street had expected U.S. Steel to report adjusted second quarter earnings of 36 cents per share on sales of $2.97 billion. Instead, the company reported adjusted earnings of $1.07 per share on sales of $3.14 billion. Including a gain of $72 million, or 41 cents per share, from the sale of its Canadian operations, U.S. Steel reported net income of
restarting blast furnaces tied to its tubular business. Foreign suppliers have captured about 50 percent of that market, a problem that U.S. steel producers say must be remedied if U.S. national security is to be protected.
The Trump administration announced in April it was launching investigations into whether imports of steel and aluminum jeopardize national security. White House officials had hoped to announce a decision on the steel issue by the end of June.
Mr. Trump told the Wall Street Journal in an interview Tuesday that action on the import issue may have to wait until health care, tax reform and infrastructure, three other issues he pressed during his campaign, are addressed.
Industry groups that oppose penalizing imports have cautioned that limits or additional duties on imports could hurt U.S. businesses that rely on them and provoke retaliation by countries that import U.S. goods.
Despite the lobbying of the free trade faction and the Mr. Trump’s latest comments, Mr. Burritt is confident a remedy is on the way.
“We believe there’s going to be strong action taken,” he told analysts.