A 1985 Christmas letter telling steel workers that Geneva Works would remain in business for at least four more years was a plan - not a promise, former USX President David Roderick testified.
Roderick said Tuesday that he did not expect workers to rely on his Christmas letter and that he was only announcing plans for a joint venture with a Korean company.The testimony came in a suit by nearly 2,000 former Geneva steel workers, who claim USX sold the Orem plant to cheat them out of $350 million in pension benefits.
The seven-week bench trial before U.S. District Judge Bruce S. Jenkins is expected to run through mid-May.
Some 120 spectators who packed the courtroom gasped when Roderick said he earned a personal pension benefit of $5 million, along with a previous yearly $1 million bonus before retiring in 1989.
Roderick said he was "not interested" in employee benefits when USX sold Geneva Works to Basic Manufacturing & Technologies of Utah for $40 million in August 1987, 13 months after the facility was idled by a national labor dispute.
"Four months before the sale, weren't you predicting profits, weren't you saying the market was booming?" asked plaintiffs' attorney Gerry Spence.
"The market wasn't booming, it was mushy," answered Roderick.
Spence said USX wanted to sell the World War II-era steel mill as early as 1985 but promised workers it would keep the plant open until late 1989 so they would have time to find other jobs or qualify for retirement.
Instead, the company secretly tried to sell the plant to realize a $92 million write-off to avoid liability for pension benefits, he contended.
"At the time you decided to close Geneva, the market was not the cause of closing her down? That's true isn't it?" pressed Spence.
"That's false," responded Roderick.
Earlier USX Vice Chairman Thomas Graham testified that Geneva was listed as making a profit in conjunction with its sister finishing plant, Pitts-Cal, in Pittsburg, Calif.
During cross examination, Graham said that between 1983 and 1986 the Orem plant was producing hot band coil steel at "historically high rates," and was making money on its own while the corporation was not.
The company resumed full operations, after its sale, as Geneva Steel.