Sales in the steel unit rose to $1.5 billion, from $255 million a year earlier, when the company's mills were idled by the labor dispute.

USX said the steel unit's move would occur no earlier than the end of the year.

He had asked shareholders to approve a nonbinding resolution asking the company to spin off at least 80 percent of the steel unit.

Although Crane executives put a bright face on the spinoff deal in 1985, the steel unit was clearly struggling.

Moreover, analysts and industry executives suggested that a spinoff of the steel unit is inevitable.

The cost per inmate was about triple the amount for modular steel units, which the city is also buying.

During a down cycle, he argues, the lagging steel unit could weaken the earnings of the energy subsidiary.

The settlement would resolve differences over financial issues for financing three pension plans of the company's steel unit.

The company said its steel units had operating income of $147 million, compared with $166 million in the period a year earlier.

Helped by higher prices, the steel unit posted an operating profit of $186.7 million in the first half of this year.