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BETHLEHEM STEEL BOARD OF DIRECTORS APPROVES PLAN TO REDUCE COSTS, CONSERVE CASH, HELP RETURN COMPANY TO PROFITABILITY

BETHLEHEM STEEL BOARD OF DIRECTORS APPROVES PLAN TO REDUCE COSTS,
 CONSERVE CASH, HELP RETURN COMPANY TO PROFITABILITY
 BETHLEHEM, Pa., Jan. 29 /PRNewswire/ -- Bethlehem Steel Corporation (NYSE: BS) announced today that its board of directors had approved a comprehensive plan that will substantially reduce costs, conserve cash and help return the company to profitability.
 Walter F. Williams, Bethlehem's chairman and chief executive officer, said the principal elements of the plan involve:
 -- Exiting the business of its Bar, Rod and Wire Division, headquartered in Johnstown, Pa., and its trackwork fabrication operations, located in Steelton, Pa.;
 -- Initiating a marketing effort to sell the coke oven operations at Lackawanna, N.Y., as an ongoing business;
 -- Removing its coke oven batteries at Sparrows Point, Md., from their "hot idle" status and allowing them to "go cold";
 -- Reducing total employment by approximately 6,500 through these restructuring actions, the recently announced plan to divest most of its coal operations, and through employment reductions at its ongoing operations;
 -- Omitting the quarterly common stock dividend;
 -- Considering modernization at its Rail Products and Pipe Division at Steelton and selling the production equipment of its inactive rail mill at Monessen, Pa.;
 -- Re-evaluating the various alternatives for its Structural Products Division in Bethlehem, Pa., and
 -- Increasing the commitment to its ongoing Total Quality process throughout the corporation.
 In connection with these actions, Bethlehem recorded a restructuring charge of $575 million in the fourth quarter of 1991.
 BARnsideration the requirements of its customers. Bethlehem's intention is to sell the entire Division to a qualified buyer who would continue this business. If this cannot be accomplished in the near term, it will sell the individual assets. Bethlehem has engaged a financial advisor, Salomon Brothers, Inc, to assist in implementing these plans.
 The Division operates an electric furnace meltshop and production facilities in Johnstown, as well as a bar mill at Lackawanna and a rod mill at Sparrows Point. The Division currently has a work force of approximately 2,600 employees -- about 1,900 at Johnstown and about 350 each at Lackawanna and Sparrows Point.
 Williams said, "We have been experiencing losses at these facilities for some time, and there is no reasonable prospect for their return to profitability. The losses have been caused by high employment and other costs, an intensely competitive market, imports of unfairly traded steel, and ever-increasing costs of environmental and other regulations."
 In September 1990, Bethlehem announced consideration of a plan to improve the competitiveness of the Division by making major modernization investments if a new labor contract could be obtained. Although discussions with the United Steelworkers of America at the local and International levels were held throughout 1991, Williams said, "we were not able to reach a mutually satisfactory new agreement."
 In addition, Williams said, "Since our September 1990 announcement, the economy and the steel market have deteriorated significantly. As a result, Bethlehem has suffered substantial operating losses and a reduction in internal cash generation. Also, there continue to be serious questions about the economy and the steel market outlook for 1992, especially in view of the credit crunch that tends to hold down overall capital investments in the nation. We have, therefore, concluded that the modernization program would not be appropriate under the overall circumstances facing Bethlehem."
 TRACKWORK OPERATIONS
 Bethlehem will exit the business of its trackwork fabrication operations, which are part of its Rail Products and Pipe Division in Steelton.
 These operations currently employ about 400 employees and have been incurring losses for a long period of time, largely due to high employment and other costs. Bethlehem's intention is to sell the entire trackwork operations to a qualified buyer who will be able to continue the business. If this cannot be accomplished promptly, Bethlehem will discontinue these operations as soon as permitted by present customer requirements.
 LACKAWANNA COKE OVENS
 Bethlehem intends to initiate a marketing effort to sell its cokemaking facilities at Lackawanna. This operation markets its coke production to trade customers and consists of two coke oven batteries with an annual capacity of about 800,000 tons and has about 400 employees.
 This divestiture is consistent with Bethlehem's strategy of concentrating its resources on its basic steel businesses and its recent announcement that it plans to sell most of its coal operations and related reserves where there are now about 800 employees. Bethlehem has engaged a financial advisor, Chemical Bank, which is currently handling the sale of the coal operations, to assist with the divestiture of the coke facilities.
 SPARROWS POINT COKE OVENS
 In 1991, Bethlehem announced the suspension of all coke production from the three operating batteries at its Sparrows Point plant for at least two years to permit the assessment and implementation of the most effective and economical option for completing a required emissions reduction program to meet governmental environmental regulations. Two of the batteries have been maintained in a "hot idle" condition for possible rehabilitation without rebuilding the entire structure. However, it has been determined that it is not feasible to make the necessary repairs under this condition, and rebuilding will be required if coke production is to be resumed.
 Therefore, the batteries have been taken off "hot idle" and allowed to "go cold," which has resulted in an additional layoff of approximately 40 employees. A decision on rebuilding these facilities, and the timing of such a project, will depend on an ongoing evaluation of evolving environmental regulations and the future availability of coke.
 FORCE REDUCTIONS
 During 1992 and 1993, Bethlehem intends to reduce hourly and salaried forces at its ongoing operations by about 1,250 employees. In addition to normal attrition, the reductions will be accomplished by immediately implementing an early retirement incentive program for certain eligible salaried employees, realigning or eliminating various functions, and further streamlining production forces. These actions, together with its plans to exit certain businesses as previously announced and as reported today, will result in a total employment force reduction of about 6,500.
 Williams said, "We regret the need to take these restructuring actions and the force reductions, and we are deeply concerned over the impact of the job losses on our loyal and dedicated employees and on the plant communities. We intend to promptly provide information and assistance to our employees, many of whom are eligible for retirement, concerning their benefits, and we will cooperate with the affected communities to help ease the impact of these actions during this transition period."
 DIVIDEND ACTION
 Bethlehem's board of directors today omitted the corporation's quarterly dividend on common stock. The board declared the normal quarterly dividends of $1.25 per share of $5 Cumulative Convertible Preferred Stock and 62-1/2 cents per share of $2.50 Cumulative Convertible Preferred Stock, each payable March 10, 1992, to holders of record on Feb. 10.
 RAIL PRODUCTS AND PIPE DIVISION
 Bethlehem is considering a modernization program for its railroad rail production facilities at Steelton subject to satisfactory completion of a facility study, which is currently under way. Proceeding with any modernization program would be subject to obtaining a competitive labor agreement.
 The facilities for the production of line pipe, which is part of this Division, will continue to operate.
 Bethlehem's inactive rail mill, located in Monessen, Pa., would not be part of any potential modernization program and, therefore, the company will begin to actively market the mill's production equipment.
 STRUCTURAL PRODUCTS DIVISION
 As a result of the recent termination of a proposed joint venture, Bethlehem is re-evaluating various alternatives for its Structural Products Division in Bethlehem. The Division is facing increasingly intensive competitive pressures, and Bethlehem will continue to emphasize in discussions with the USWA the need for competitive employment costs, which will be a condition for any potential modernization. While the Division is now a positive cash generator, modernization will be required in the future if the business is to be competitive.
 As previously announced, the corporation will discontinue its existing blast furnace and basic oxygen furnace operations at Bethlehem during the next few years but will continue to operate the Division's coke ovens. In 1990, Bethlehem recorded a restructuring charge in connection with discontinuing these primary operations.
 TOTAL QUALITY
 Bethlehem will increase its commitment to its ongoing Total Quality process throughout the corporation as a key element of its continuing objective to be a high-quality, low-cost producer of steel products. Greater emphasis will be placed on further involving employees at every location to streamline and upgrade Bethlehem's business processes to improve overall efficiency.
 Williams said, "We have some very challenging objectives, but I am confident that they are within our reach if all employees work together as a team with total commitment to our success."
 In summarizing Bethlehem's announcement today, Williams said, "We believe these actions and plans are essential to help us return to profitability, rebuild our financial strength and enhance our position as a leading producer of high-quality steel products."
 /delval/
 -0- 1/29/92
 /CONTACT: Henry Von Spreckelsen of Bethlehem Steel, 215-694-3711/
 (BS) CO: Bethlehem Steel Corporation ST: Pennsylvania, Maryland, New York IN: MNG SU: RCN


LJ -- PH006 -- 4588 01/29/92 09:18 EST
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