Bethlehem shipyard cuts jobs gulf crisis cited

October 30, 1990|By John H. Gormley Jr.

Employment at Bethlehem Steel Corp.'s Sparrows Point shipyard has fallen by about a third since September, as owners have deferred making repairs because of the increased demand for ships during the military buildup in the Middle East, Bethlehem said yesterday.

Current employment is 750, down from 1,130 in September, Bethlehem said in a prepared statement issued in response to a series of questions from The Sun.

The shipyard's general manager in Baltimore, David Watson, was the source of the information in the statement, according to William J. Ginack, a public affairs officer for Bethlehem at its corporate headquarters in Bethlehem, Pa.

In March 1989, Bethlehem announced that the yard would no longer construct new ships -- the work for which the yard was designed -- and would concentrate instead on repairs and conversions. The yard had been losing money -- about $100 million in four years. The restructuring to convert the yard to a repair facility showed up in the company's books as a $55 million charge against 1989 profits.

That new strategy proved a success, as the company kept its 882-foot-long floating dry dock, the Bethpride, in nearly steady use.

Employment had been growing steadily, reaching about 1,320 in June. The company said at that time that the yard was making money for the first time in years. Earlier, the company had said that the new emphasis on repairs would allow the shipyard to stabilize employment.

Bethlehem said yesterday, "We are experiencing the side effects of Desert Shield," the Pentagon's term for the buildup in the Persian Gulf. The Navy and the government are putting off overhauls because of the need for ships in the Mideast, the company said.

Also, the government has been chartering privately owned commercial vessels to augment the government fleet. The high prevailing charter rates have prompted commercial ship owners to defer repairs as well, the company said.

Bethlehem said the yard's immediate prospects remain good, although the military buildup may continue to affect the timing of ship repairs. The company said it has bid on a number of contracts for November and December and that the cruise ship Celebration was booked for early December.

Four vessels are in the yard for repairs: a Navy floating dry dock, an integrated tug-barge and two barges.

Bethlehem said the yard's long-term prospects are also good because of the $1.3 billion the government has budgeted for new military sealift ships and because of legislation to require double hulls for tankers in an effort to decrease the chance of oil spills.

The company said it has no intention of questioning its strategy of reliance on repairs, since the yard's traditional market, construction of new commercial ships, remains almost nonexistent in the United States.

"Our downsizing was and still is the proper strategy," the company said.

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