Fair Warning

U.S. Steel Corp.'s suave and usually reticent Benjamin F. Fairless guaranteed last week that there would soon be another pay raise in the steel industry--followed by another price rise. This seemed as natural to Ben Fairless as the fact that night follows day.

First of all, said Fairless in a speech to the American Petroleum Institute in Los Angeles, "America cannot afford another steel strike. Much of our present difficulty is due to the fact that strikes have cost our nation 29 million tons of steel since V-J day . . ." Furthermore, "men in top-paying industries ... in automobiles, oil, rubber, and many others--have already had a raise this year, but our steelworkers have not. So our men can't see why they should be discriminated against--and, frankly, neither can I."

If, said Fairless, the C.I.O. steel workers get a 15-c- an hour increase [they are reportedly asking for 17-c-], it will push steel's labor bill up $6 a ton. A price rise in many of the raw materials that go into steel has already added $4 a ton to the cost of steel. Said Fairless: "If the cost of making steel should rise 10% ... it would be inevitable, I think, that the price of steel should do likewise," i.e., a boost of about $10 a ton.

Without a steel price increase, he argued, the increased production cost of $220 million a year would amount to more than was paid out to stockholders in the last 2 1/2 years. Thus, earnings will drop and Big Steel, and the industry, will not be able to attract the capital necessary for the expansion the U.S. needs. "Any reduction in earnings," said Fairless loud enough for Washington to hear, "means a reduction in the ability to expand."

For the benefit of the "misguided gentlemen [who] start shouting that a disastrous inflation will result" every time a steel increase is mentioned, Fairless said that the effects of a 10% boost would be "negligible." "It would add less than 4-c- to the price of a $22 automatic toaster; 60-c- to the price of a washing machine; $1.50 on an electric refrigerator . . . $17 on your new car; and $37 to the cost of a $10,000 home."

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