Bethlehem Steel Studies Restructuring

Integrated steelmaker Bethlehem Steel Corp., Bethlehem, Pa., is putting together a restructuring plan that would keep its mills open while possibly dropping retirees from receiving their current pension plans.

In what could be considered an alarming notice to Bethlehem Steel retirees drawing a pension from the bankrupt company, chairman and CEO Robert S. Miller has noted, “This company now has six retirees for every active employee. The accumulated burden of our pension and health care ‘legacy costs’ is approximately $5 billion, and we can see no way to support these obligations beyond the next year.”

Adds Miller, “We must, therefore, consider [changes], including the possibility that our current defined benefit pension plan will be terminated by the Pension Benefit Guaranty Corp. (PBGC), requiring a new defined contribution benefit plan for our active employees.”

Miller also says the company will re-negotiate its current labor agreement with the United Steelworkers of America. “We must fight for survival in the global marketplace, against significant lower-cost competition from imports, from mini-mills and even from the re-organized assets of LTV,” says Miller.

Bethlehem Steel, which filed for Chapter 11 bankruptcy last October, operates blast furnaces and basic oxygen furnaces at facilities in Baltimore and in Burns Harbor, Ind. The company also operates electric arc furnace mills in Coatesville and Steelton, Pa.

According to published reports, Bethlehem Steel is also negotiating with Brazil's Companhia Siderurgica Nacional (CSN) regarding a possible joint venture at Bethlehem's Baltimore mill. Another joint venture is under discussion with potential partners for the Burns Harbor mill.