To suggest that USX engineered a nationwide, $1.2 billion corporate restructuring simply to "euchre a few benefits" out of its Geneva Works employees is ludicrous, USX attorney Gordon L. Roberts said Tuesday.
Noting that the restructuring involved 10 steel plants and more than 6,500 employees around the country, Roberts added, "It's bizarre to suggest that a decision of that magnitude was made to do Tony Pickering out of his pension."Pickering, a former Steelworker at the Geneva Works, is the lead plaintiff in a federal lawsuit that claims USX shut down the Utah County plant to avoid paying millions of dollars in pension benefits to hundreds of former employees.
The Pickering vs. USX lawsuit is being tried before U.S. District Judge Bruce S. Jenkins.
In his opening arguments on Monday, attorney Gerry Spence charged that USX officials misled employees into believing that they would have jobs until at least 1989, even though USX already had calculated savings of $92 million in tax write-offs for a closure in 1986.
Officials intended all along to close the plant and reap the benefits that would otherwise have gone to workers, he argued, charging that USX wanted the money for various and far-flung business ventures.
Roberts said USX had a lot more on its corporate mind than pension benefits. "Profitability was the issue," he said, pointing to charts showing huge financiallosses in the years preceding the massive restructuring. "It had not a damn thing to do with Tony Pickering."
After losing $852 million in 1982 and $634 million in 1983, USX restructured its operations and turned a profit in 1984, according to Roberts. Then the industry took another nose dive, and that along with a strike - the workers called it a lockout - USX again faced hundreds of millions of dollars in losses during the first half of 1986, he said.
Union officials were "intimately involved" in the negotiations on the future of the Geneva Steel Works and were warned that "if we have to take a strike and the plant goes down, there is no guarantee that it will go up again; all bets are off," Roberts said.
At the time, USX had a steel-producing capacity of about 20 million tons and a market for only 12.5 million tons, he said. Companywide, plant utilization was only 68 percent in 1986, and USX "felt it unlikely that the market would get better, so they proposed the elimination of facilities."
As an antiquated, open-hearth operation, Geneva was naturally included on the cost-cutting list, Roberts said. He said USX originally called the closure of the Orem plant an "indefinite idle" rather than a permanent shutdown because it wanted to "keep its options open," not because it wanted to deceive the workers.
Following the restructuring in 1986, plant utilization increased to 89 percent and USX returned to profitability, Roberts said, adding, "We're not ashamed of that."
He also refuted Spence's suggestion that USX lied about the company's pension agreement, saying it was clear to everyone that the agreement would expire Dec. 31, 1986. Nevertheless, the union told its members not to panic because it would protect them, Roberts said.
Calling the Steelworkers' union "very sophisticated," Roberts said it was ridiculous to think that USX could have "pulled the wool over (the union's) eyes." The pension agreement is history and can't be selectively rescinded now, Roberts said.
"Benefits have been paid out and people have relied upon it. That Humpty Dumpty cannot be put back together again," he said.
In 1987, USX sold the Geneva Works to Basic Manufacturing and Technology, which has modernized the plant and resumed operations. Spence said BM&T was made a bogus subsidiary of USX at the time of the sale as part of a complex ploy to escape the pension obligations.
More than 100 former Geneva workers have crowded into the courtroom during the early days of the trial, which is expected to take as long as six weeks. The case is being heard without a jury.