Word: steel
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Dates: during 1960-1969
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Unwanted Role. Never has a price roll-up been so eagerly declared a price rollback-not, anyway, since the Administration joined the steel fight of 1966, which followed much the same script. There was the same hero, U.S. Steel and its chairman, Roger Blough, who undercut by roughly 50% the price increases posted by the same villain, Bethlehem and its chairman, Edmund Martin. And there was the same Lyndon Johnson, who declared himself pleased with the denouement...
This time, however, the plot was rather more turgid. For one thing, if the Administration was anxious to portray U.S. Steel as a model of industrial statesmanship, the company did not care for the role. U.S. Steel made it clear that its price increases fell far short of covering the cost of the 6% labor wage-and-benefit package negotiated last month, warned that other price changes would be coming from time to time. Aiming a lance at the White House, the company said it was "almost, but not quite universally recognized" that steel prices do not cause inflation, insisted...
...Administration's campaign had begun soon after the Bethlehem announcement. Arguing that a 5% across-the-board increase was unreasonable, Johnson ordered Government agencies to buy steel only from companies that held the price line. Spearheading the attack was the Defense Department, whose 3.7 million-ton annual steel consumption (half of which goes for ammunition) accounts for nearly 4% of the industry's output...
...Word. White House telegrams went to all directors of all steel companies, and the Federal Trade Commission briefly threatened to open an investigation. Over the weekend, the heads of three big defense suppliers-Bethlehem's Martin, C. William Verity of Armco and Thomas Patton of Republic -were summoned to Washington for talks with Navy Secretary Paul Ignatius. Before long, their companies were issuing statements that across-the-board did not actually include shell steel, bomb casings, barbed wire and other military items. Defense, for its part, quickly claimed victory...
Nevertheless, steelmen were watching not the U.S. Government but U.S. Steel to see how prices would ultimately shake out. The industry leader, with 24.5% of total production, U.S. Steel had led off the price increases with a modest change in one item, tin plate, and the President publicly approved the "selective" move. When it came time to move again last week, U.S. Steel was as polite as its competitors had been imprudent. Cannily using the key word, it announced increases on "selected" products. All told, they covered 63% of the industry's output, included such important items...