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Conversation 007-048

TapeTape 7StartMonday, August 2, 1971 at 12:18 PMEndMonday, August 2, 1971 at 12:21 PMTape start time02:14:09Tape end time02:16:52ParticipantsNixon, Richard M. (President);  Shultz, George P.Recording deviceWhite House Telephone
AI Summary

President Nixon and George P. Shultz discussed the administration's public response to a surprise 8% price increase announced by U.S. Steel. They coordinated a statement emphasizing that the White House had no prior knowledge of the hike and warning that such increases undermine the domestic industry’s competitive position and job security. Nixon directed Shultz to strengthen the statement by mandating that labor and management prioritize productivity improvements to address these systemic issues.

U.S. SteelPrice controlsInflationEconomic policyProductivity CommissionLabor relations
AudioNARA Description

On August 2, 1971, President Richard M. Nixon and George P. Shultz talked on the telephone from 12:18 pm to 12:21 pm. The White House Telephone taping system captured this recording, which is known as Conversation 007-048 of the White House Tapes.

Nixon Library Finding Aid
Conversation No. 7-48

Date: August 2, 1971
Time: 12:18 pm - 12:21 pm
Location: White House Telephone

George P. Shultz talked with the President.

[See Conversation No. 553-6G]

     Labor disputes
          -US Steel
                -Price increases
                      -Administration position
                 -John B. Connally
                -Paul W. McCracken
                -Effect on competition
                -Proposed statement
                      -Wording
                      -Productivity Commission
          -Rail announcement
                -James D. Hodgson
Transcript (AI-Generated)

This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.

Hello, Mr. President.
U.S. Steel just announced a fairly sweeping set of price increases that are quickly estimated to be in the vicinity of 8%, but nobody's had a real chance to analyze it.
And the question is what to say about it, if anything.
There are two things that...
it seems to me could be said completely within any framework of the negotiations.
One is that we were not informed in advance of this action.
So that we don't have any, we try to nail down the fact that we didn't have any deal with them about prices.
And I've checked and they hadn't talked with John Connolly and they hadn't talked with McCracken.
And I know they haven't talked with me about prices.
And the other is to say that they have an unfavorable competitive position now.
This only worsens it, and it doesn't seem to be in their long-run interest.
That's correct.
I've written this out as follows.
The administration was not informed in advance of this action, and therefore we do not have any detailed analysis of it.
However, in view of the already unfavorable competitive position of the domestic steel industry, we question whether this price increase is in their long-run interest
Price increases of this magnitude at this time are bound to have an adverse effect on market penetration, on the tonnage of steel produced in the United States, and on jobs in the steel industry.
Well, I want you to add that it is essential now for the new productivity commission or whatever it is.
Could you put in something on that?
I don't know whether that would bear the weight of this.
All right.
Okay.
All right.
Fine.
I didn't know what I was saying in the long term without mentioning that.
And they say that in the long term, both steel management and labor must work together for purposes must look to this problem or price themselves or something of that sort.
I wouldn't be concerned about cracking them, too, anyway.
I have no concern about cracking
I'll put a little tougher sentence on the end of it.
How did Hudson handle the rail thing, the announcement and everything?
Yes, he did.
He played it the way we agreed.
I think the price thing caught him a little off guard, so we'll try to nail that down.
Fine.
Good.
Fine.
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