Streamlining the Elephant

United States Steel, the world's largest steelmaker, has often been criticized for being a clumsy, poorly organized giant with too much fat. Last week Big Steel answered the critics with its most sweeping reorganization since 1951. The move gave the jitters to thousands of its employees who fear for their jobs, and caused competitors to wonder just how tough the revamping will make the company that already sells a fourth of the steel in the U.S. "How do you streamline an elephant?" asked one rival.

Big Steel plans to streamline by combining seven divisions covering mining, shipping and steelmaking into a single unit in hopes that the elephant will be able to move more quickly. It will consolidate its research and ac counting operations and narrow its 53 separate sales offices in 28 cities (as many as three to a city) to only one to a city. Seven other autonomous divisions, largely concerned with steel fabricating, were left untouched.

The move should please customers, who often have five different Big Steel salesmen calling on them, but, more important, it will trim the company's costs by eliminating a great deal of duplicated effort. Big Steel hopes that it will help increase profits, which have shrunk from 9.5% of sales in 1957 to 4.7% last year. Reorganization will also mean fewer white-collar jobs. In the past two years, U.S. Steel has trimmed its office payroll by up to 30% ; the estimates are that the latest move will lop off another 10%.

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