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Steelworkers Call On Tenneco To Audit Quality Of Stainless Steel

16 November 2000

Steelworkers Call On Tenneco Automotive To Audit Quality Of Stainless Steel Purchased From AK Steel

    NEW YORK--Nov. 15, 2000--The United Steelworkers of America (USWA) today called on Tenneco Automotive Inc. to conduct a comprehensive quality audit of all stainless steel purchased from AK Steel for the production of its exhaust systems.
    Locker Associates, a financial advisory firm retained by the USWA, attended Tenneco Automotive's senior management meeting with the financial community today in order to question one of Tenneco Automotive's supply arrangements that could have consequences for the company and its shareholders.
    Tenneco Automotive makes exhaust systems from stainless steel produced at AK Steel's Mansfield mill, which has been operating with replacement workers since locking out approximately 620 members of USWA Local 169 on September 1, 1999. According to USWA sources, there are significant production and maintenance problems at the AK mill -- in addition to operating with inexperienced replacement workers, the mill has lost a number of key managers.
    As the recent recall in the tire industry demonstrated, there may be a greater potential for quality and product liability problems when inexperienced replacement workers operate complex manufacturing equipment. In light of these risks, Locker Associates sought to raise the following questions of Tenneco Automotive management:

1. What efforts has Tenneco Automotive made to detect quality
    problems in its stainless steel feedstock?

2. What steps has management taken to protect Tenneco Automotive and
    its shareholders from production problems and product liability
    issues that could arise from defective stainless steel feedstock?

3. What alternative sources are available in the event that AK Steel
    is no longer able to meet Tenneco Automotive's supply needs?

4. The USWA has sent two letters to Tenneco Automotive management
    seeking a meeting to discuss ways in which the company could help
    to settle the AK Steel dispute. Why has management totally ignored
    these requests?

5. One of Tenneco Automotive's five largest institutional
    shareholders has raised some of these very issues in a recent
    letter to management. What steps is management taking to address
    growing shareholder concern?

    Also at today's meeting, USWA representatives distributed a letter to Tenneco Automotive analysts and institutional investors that asks: "Is Tenneco Automotive Risking its Reputation on Steel Supplied by AK Steel's Replacement Workers?" together with an information package on the AK Steel dispute.