Interview with John A. Rose, General Manager ERP Project

· Can you tell us the basic scope, ambit of the project ERP? What does ERP mean?
ERP is Enterprise Resources Planning. We have a capital appropriation that has been approved and will carry us through the first quarter of 2009. In North America the focus of the project is in the business planning and order fulfillment area. In North America the business-planning portion of the project will be implemented during that period for a handful of North American plants. The order fulfillment portion will be designed and built, but not implemented. Here, in Europe, the focus is on finance, accounting, procurement, a portion of human resources, taxes and security and controls. Those aspects will be designed globally and right now we are in process of gathering the other local requirements for those subsets of the project here for Slovakia and Serbia. This period will be an approximately three month cycle in order for us to gather these requirements and get them designed into the program. With the expectation that in May of 2008 we will be implementing those functions in Serbia.

· What preceded this decision about ERP in Pittsburgh? Why we needthis program?
Over the last years U. S. Steel has had significant growth. When we look at that growth, we are looking to the additions here in Europe - the facilities here in Slovakia, in Serbia, in North America, the acquisition of National Steel and the recent acquisition of Lone Star Steel. When we look at those as formally separated companies we had different ways to run the business. We grow in order to improve our efficiencies and improve our profitability. The ERP program has been designed to pull synergies, commonalities, and the things we can standardize across the Europe as well as across North America to improve our efficiency and our productivity.

· What has happened in the American plants within the project?
In North America we look at the many facilities in many locations in the United States. We have the opportunity to improve business planning from a corporate level prospective as well as a plant prospective. As example, with the acquisition of Lone Star Steel we have the opportunity to source the material from our U. S. Steel facilities into Lone Star rather than having Lone Star buy steel from other companies. We will build our inventories to be able to supply our own company in the future. We also have been looking at taking product from one facility to another to be more efficient at producing for automotive industry, for the sheet product industry and for the container and construction industry.

· And how are you getting on ERP program in Slovakia?
Things are moving along very well and as I indicated a moment ago we are in the process right now when we are focused on gathering the local requirements that are specific to Slovakia. The global design for finance and accounting, procurement and HR has been completed. Now, we must find those unique items (podobnosti, zhody) that the Slovak government and you need to run our business here so what we can than couple them with global design and have a complete designed for everything that is required for Slovakia.

· Who is member of the team for ERP program?
We have many members on the team. We have got, of course, some of the leads from North America. Some the leads here in Slovakia like Jozef Harakal, Maria Krupova and Ivo Cipka are participating, from Serbia we have got Gordana Nikolic. We try to pull together people from all the significant locations together in one team so we can have clear understanding of everything that is needed across the entire enterprise.

· How long do you want to stay in Slovakia or in Europe?
We will be here for the next three months. We will be gathering the information regarding to the local requirements that are required. So that will carry us through the end of October. In the month of November we will be doing some building activities to test the global requirements and local requirements that have been gathered. So, for next three or four months will be doing different forms of activities in this phase of the project. In the future we will have other teams present in Slovakia and in Serbia doing different aspects of the project. Such as building activities then falling into testing and the education process before we implement the ERP activities in Serbia.