The head of USX Corp. warned Wednesday that if the strike at the company`s steel unit can`t be settled in the next few days, steelworkers probably won`t return to work until April or May.
However, USX Chairman David M. Roderick noted progress in the negotiations and expressed some optimism that the three-month walkout could be settled soon.
Roderick also met again Wednesday with New York investor Carl C. Icahn concerning Icahn`s proposal to buy the steel and oil giant for $31 a share.
”We`re still in a friendly mode at this point,” he said before the meeting.
Roderick said he expects to receive a restructuring study from investment bankers within a week, but a decision by USX management on what action to take could come as late as the end of the year, if then.
In his first press conference since Icahn made his proposal earlier this month, Roderick also:
— Said he expects previously announced asset sales to raise about $1 billion in cash by year-end. USX recently tapped its credit lines to boost cash to about $2.7 billion. According to Roderick, this war chest will be available for general corporate purposes, though he said cash could be used for ”defense” purposes, a reference to a possible tender offer by Icahn.
— Wouldn`t rule out selling or spinning off USX`s troubled steel unit in a restructuring. Though he said he has ”no preconceived idea that`s the best way to go,” Roderick said he would structure a spinoff so a stand-alone steel business ”would be successful.”
— Said USX is trying ”to enter into a contractual relationship” with about 20 key USX managers, including Roderick and the presidents of its four operating subsidiaries, ”to assure we have the
value of their service during these disruptive times.” Roderick carefully avoided the term ”golden parachute.”
— Revealed that Australian investor Robert Holmes a Court reported selling his USX shares for an undisclosed but sizable profit. In a telephone conversation last week, Holmes a Court, the first of several well-known takeover artists to invest in USX, indicated that he had bought more than $15 million of USX stock ”purely for investment” purposes, Roderick said.
The 91-day-old work stoppage by the United Steelworkers of America is Roderick`s most pressing concern because major customers will be ordering steel for the 1987 first quarter in the first 10 days of November. The labor dispute must be settled in the next few days for USX to receive a large volume of first-quarter orders.
If a settlement can be reached in what Roderick called this ”window of opportunity,” work would resume by the beginning of 1987, he said. Otherwise, USX would have no reason to resume production until April or May, he said.
Roderick, who receives daily reports on the bargaining talks that resumed last week for the first time since the work stoppage began Aug. 1, said that ”progress is being made” but ”not rapidly” in bargaining that resumed last week for the first time since the work stoppage began Aug. 1. ”I remain hopeful that a settlement can be reached, but again there`s no certainty of that,” he said.
”I would say the attitudes are open and constructive, and I think both parties are trying very hard to end this strike,” he said.
Roderick cautioned several times that USX, the nation`s largest steelmaker, must negotiate a competitive contract ”if our steel business is to survive.”
On Tuesday, USX, hurt by the strike and a downturn in its energy business, reported a net loss of $183 million in the third quarter.
Roderick said he hoped USX would announce any further restructuring moves as a result of the investment banks` study by the end of the year. An announcement had been expected earlier, given Icahn`s presence. Icahn, chairman of Trans World Airlines, has threatened a tender offer unless USX accepts his proposal or restructures so its stock value would rise above his $31-a-share offer. USX stock closed at $25.50 in New York Stock Exchange trading Wednesday.
”Keep in mind you`re making a major decision,” Roderick said.
”. . . We will be deliberate, we will be thorough and we will be prudent.”
Roderick repeatedly noted that USX has commitments to more than just shareholders–including employees, retirees, customers and creditors–but he denied that meant management is ”entrenched.”
”The possibilities are virtually endless,” he said of restructuring alternatives.
Roderick said he has met in New York with Icahn and held ”a tremendous number of phone conversations” with him to clarify Icahn`s ”general proposal.” Discussions also involve whether USX will open its books to Icahn.
Roderick wouldn`t say if USX is seeking Icahn`s agreement to halt further USX stock purchases in return for a look at its books, but he noted that Icahn hasn`t raised his 11.4 percent stake. Neither side has taken ”what could be considered a hostile gesture” in an attempt ”to come to an understanding,” Roderick said.
Asked how well he thought Icahn would manage USX if he took over, Roderick, who showed unusually good humor in the 77-minute press conference, said: ”Well, I think he would have a lot to learn.”
