Geneva Steel President Joseph Cannon has testified that he angered USX officials when he sought assistance from Sen. Orrin Hatch, fearing his deal to buy the aging steel mill was falling apart.
Cannon's testimony Tuesday came in the eighth week of a U.S. District Court trial on a lawsuit filed by former Geneva steelworkers who claimed USX sold the mill in 1987 to cheat them of pension benefits.Cannon said he did not know what the Republican senator told then-USX Chief Executive Officer David M. Roderick, but that "in one way or another he intervened."
Cannon testified that the night before the business coalition of Basic Manufacturing & Technology of Utah was to close the deal on July 31, 1987, a lender backed out.
He said he told Frank Adams, USX vice president of accounting and finance, that he didn't think the deal could be finalized.
"My recollection is that he was visibly angered," Cannon said.
Cannon indicated he was worried that USX would respond by shutting off the natural gas that was maintaining the coke-making batteries.
"Shutting off the gas was like a stake through the heart," he said.
He said it was at that point that he called Hatch and asked for help in getting an extension. Again, he said, Adams was angry.
Cannon said he can't now recall "all the colorful language" Adams used, but that "he said something like `I didn't get into this to get jerked around by some senator."'
BM&T was given until Aug. 31, 1987, to come up with financing to buy the USX plant, which eventually sold for about $40 million.
Asked where he got the idea to offer to assume about $130 million in pension benefits in one early purchase offer, Cannon said he could not remember, but he did not think it came from USX.