The federal government attempted to use federal anti-trust laws to break up U.S. Steel in 1911. That effort ultimately failed. Time and competitors have, however, accomplished nearly the same thing. In its first full year of operation, U.S. Steel made 67 percent of all the steel produced in the United States; it now produces less than ten percent.
The Corporation, as it was known on Wall Street, always distinguished itself for its size, rather than for its efficiency or creativeness, during its heyday. Because of its heavy debts taken on at its formation, as Carnegie insisted on being paid in cash for his properties, U.S. Steel found itself outstripped by its competitors, even as the market for steel boomed. Bethlehem Steel Company, taken over by Charles Schwab, the first President of U.S. Steel, after he left U.S. Steel in 1903, took much of this business, driving U.S. Steel's share of the market to roughly 50 percent by 1911.
U.S. Steel's production peaked at more than 35 million tons in 1953; its employment was greatest during World War II in 1943, when it had more than 340,000 employees. It employed approximately 52,500 people in 2000.
The federal government has also intervened on other occasions to try to control U.S. Steel. President Harry S. Truman attempted to take over its steel mills in 1952 to resolve a crisis tied to its bargaining dispute with the United Steelworkers of America. The Supreme Court of the United States blocked that, ruling that the President did not have the constitutional authority to seize the mills. President John F. Kennedy was more successful in 1962, when he "jawboned" the steel industry into reversing price increases that Kennedy considered to be dangerously inflationary. The federal government also prevented it from acquiring National Steel in 1984 and political pressure from the United States Congress forced it to abandon plans to import British Steel slabs. It finally acquired National Steel's assets in 2003, after National Steel went bankrupt.
U.S. Steel acquired Marathon Oil in 1982 and Texas Oil & Gas several years later. The corporation found itself at the end of the century deriving almost all of its revenue and all of its net income from its energy operations. The spinoff of U.S. Steel's steel operations followed.
U.S. Steel maintained the anti-labor policies of Andrew Carnegie, who had destroyed the Amalgamated Association of Iron, Steel, and Tin Workers, the union that represented his employees at the Homestead, Pennsylvania plant after a massive strike in 1892. U.S. Steel defeated another strike in 1901, the year it was founded.
U.S. Steel attempted to prevent a recurrence of that sort of insurgence thereafter. When it built Gary, Indiana, named after Judge Gary, in 1906, it maintained the sort of close, paternalistic control over the political and social life of its workers in a mid-size city that coal mine and textile factory owners had in company towns. It also maintained close surveillance of employees' activities, blacklisting many of those who had union backgrounds through spies placed throughout its workforce.
U.S. Steel did reach a modus vivendi with unions during World War I when, under pressure from the Wilson Administration, it relaxed its opposition to unions enough to allow some unions to operate in some of its factories. It returned to its previous policies as soon as the war ended, however, and defeated union organizing efforts led by William Z. Foster, then a syndicalist within the AFL, later a leader of the Communist Party of the United States of America, in 1919.
During the 1920s U.S. Steel, like many other large employers, coupled paternalistic employment practices with "employee representation plans," quasi-unions under the effective control of management, to forestall union organizing. Those ERPs, ironically enough, eventually became an important factor leading to the organization of the United Steelworkers of America, an independent union aligned with the Congress of Industrial Organizations .
U.S. Steel dropped its hardline anti-union stance in 1937, however, when Myron Taylor, then President of U.S. Steel, agreed to recognize the Steel Workers Organizing Committee, an arm of the CIO led by John L. Lewis. Taylor was an outsider, brought in during the Great Depression to try to rescue U.S. Steel from the abyss into which it had fallen, and had no emotional investment in the company's long history of hostility to unions. Watching the upheaval caused by the United Automobile Workers' successful sit-down strike in Flint, Michigan several weeks earlier, and convinced that Lewis was someone he could deal with on a businesslike basis, Taylor sought stability through collective bargaining.
The Steelworkers have had a contentious relationship with U.S. Steel since then, but far less so than it had with "Little Steel" in the years that followed or than the relatinship that other unions had with employers in other industries in the Unite States. The Steelworkers launched a number of long strikes against U.S. Steel in 1946 and 1959, but those strikes were over wages and benefits, not the more fundamental issue of union recognition that led to violent strikes elsewhere.
The 116 day strike in 1959 had an important, and irreversible, effect, however: by shutting down ninety percent of U.S. steel production, both by U.S. Steel and its competitors, the union opened the door to steel imports, which had been a negligible factor before then. The long decline of the United States steel industry began then.
The union attempted to avoid this problem, and the unintended effects caused even by strikes that did not occur, by entering into the Experimental Negotiation Agreement in 1974. As experience had shown, steelmakers typically increased production tremendously in the runup to negotiations, creating a stockpile as a hedge against a strike. If the strike did not happen, then the employers laid off employees to reduce the glut of unsold steel. Similarly, customers often placed orders elsewhere when the contract's expiration date approached in order to reduce the likelihood that a strike would prevent the employer from filling their orders.
The parties entered into the ENA, which provided for arbitration in the event that the parties were not able to reach agreement on all of the terms of a new collective bargaining agreement through negotiations, as an alternative to striking. The ENA was very controversial within the union, since it compromised the union's right to strike.
U.S. Steel and the other employers terminated the ENA in 1984. In 1986 U.S. Steel locked out thousands of its employees when it shut down a number of its facilities as a result of a drop in orders on the eve of a threatened strike that never came about.
U.S. Steel and other producers demanded extensive concessions from their employees in bargaining in the early 1980s. The steel industry has likewise sought to spur the federal government to take action to counteract dumping of steel by foreign producers, that is, sale at less than the cost of production made possible by subsidies from those steel producers' governments. Neither concessions nor anti-dumping laws have, however, restored the industry to health.