NEW YORK U.S. Steel Corp.s incoming chief
executive officer Mario Longhi will be looking to improve
profits at the Pittsburgh-based steelmaker, the company said
He seeks to return our company to sustainable
profitability and to improve shareholder value creation through
a renewed focus on operational excellence, product innovation
to support our customer needs, and a high performing
organization with the capability to deliver on our
expectations, a spokeswoman told AMM
in an email
Last week, U.S. Steel announced that Longhi will
succeed John P. Surma effective Sept. 1. Surma will retain the
position of executive chairman through Dec. 31, when he will
retire from the company and its board of directors (
amm.com, Aug. 16
The move came just months after Longhi was named president of
the integrated producer, and within a year of joining the
company as its executive vice president and chief operating
officer. Some called the move expected, although it was still a
surprise to others, particularly as Longhis rise in the
ranks was atypical for the company.
That was surely part of the plan when he was
recruited, Thomas C. Graham, founding member of TC Graham
Associates who served as president of U.S. Steel Group of USX
Corp. from 1983 to 1991, told AMM. There will be a lot of
constituents from various segments watching this closely
because its a radical move for U.S. Steel. This has
always been a company that promoted within. There had to be a
lot of foresight when he was hired. His progression probably
occurred at recruitment.
For Longhi, the road ahead looks like a particularly difficult
one. The company, which netted losses in five of its past eight
quarters, will have to regain market share and improve margins
to instill confidence on Wall Street and in the marketplace.
The question is what are they going to do to make
money, Bradford Research Inc. analyst Charles Bradford
. The first thing that Mario is going to
have to do ... is to go plant by plant, facility by facility,
with someone who knows the operations and do some benchmarking.
Theyre going to have to figure out how to compete.
But, in addition to moving away from loss-making territory,
Longhi will need to focus on maintaining team unity in a time
One of the biggest problems with the company is internal
politics, Bradford said. There has been a huge loss
of senior management over the last four to five years right
through the organization.
Longhi, while a relative newcomer to U.S. Steel, is well known
in the metals industry. He spent 23 years at aluminum producer
Alcoa Inc., followed by a six-year tenure at Gerdau AmeriSteel
Corp., later renamed Gerdau Long Steel North America.
Although some have claimed that Longhis background in the
aluminum and steel long products sector may mean a mismatch at
the flat-rolled and tubular producer, Graham said the move is a
This is a guy who previously has been successful in two
major companies. I doubt that its a serious obstacle for
an executive of his caliber, he said. He will have
an awful lot of support and people wishing him well.
In addition, Longhis background could push the integrated
producer closer to electric-arc furnace territory, which Surma
previously said could have potential (
amm.com, Sept. 16, 2011
Earlier this year, Longhi was charged with heading up a
cost-reducing initiative that would improve efficiency and help
the bottom line.
In June, the company shuffled a number of executives, including
the hiring of a procurement officer from Alcoa (
amm.com, June 10
This company has the possibility to show major progress
in the next couple of years, Bradford said, citing the
advantages U.S. Steel has, particularly on its raw materials
side. I think theres a lot of potential there but I
wouldnt expect it to happen overnight.