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KENNEDY VERSUS BIG STEEL

During his first year in office President John F

Kennedy and his administration were involved in negotiations between the major steel firms and their workers. By the end of March 1962 a deal was cut whereby workers received no wage increase but expanded fringe benefits. With this settlement worked out, Kennedy assumed steel companies would not raise their prices. Two weeks later, however, Roger M. Blough, president of U.S. Steel, went to the White House and handed Kennedy a press release announcing a price hike of six dollars a ton. The other major steel firms immediately followed suit.

Kennedy felt betrayed: he had intervened in talks between Big Steel and labor to keep industry costs down, and now the companies raised prices. He responded by attacking the action of steel executives on television and initiated a grand jury investigation on price-fixing in the steel industry. The Pentagon threatened to shift procurement to companies that had not raised prices, and Congress was encouraged to investigate the industry as well. Three days after the price increases were announced, several firms backed down, and the following day, 14 April, Blough rescinded U.S. Steel's new price.

Although on the one hand a victory for Kennedy, the incident damaged government business relationships. During his first year in office the president had worked hard to eliminate the private sector's traditional fear of Democrats. This battle only appeared to confirm the corporate world's view that Kennedy and his party were hostile to big business.