Bethlehem lost $45 million in 1st quarter Steelmaker says weak demand, low prices point to difficult year

April 29, 1992|By Kim Clark | Kim Clark,Staff Writer

WILMINGTON, Del. -- With steel prices below their 1981 level and demand remaining weak, Bethlehem Steel Corp. said yesterday that it will lose money at least through June.

The nation's second-largest steelmaker lost $45 million in the first three months of this year and expects to report a loss for the second quarter, Chairman Walter F. Williams said at the company's annual shareholders meeting.

This year's first-quarter loss compared with a loss of $38.7 million in the year-ago period.

But Mr. Williams said he sees some signs of hope: a rise in sales; continuing improvement at the company's plants at Sparrows Point and Burns Harbor, Ind.; and a possibility of increased government spending on bridge and highway repairs.

Still, since the company is now selling more steel at lower prices than it did last year and doesn't expect overall demand to rise much above last year's dismal levels, Mr. Williams said he has a "rather pessimistic outlook for 1992."

As a result of the continuing losses -- Bethlehem has lost a total of $1.2 billion in the past two years -- the company is speeding up plans to sell off unprofitable operations.

The company has not found any buyers interested in purchasing the bar, rod and wire division, Mr. Williams said, and, as a result, might soon break the division up and sell its assets, including the division at Sparrows Point.

"It is not going to be easy," Mr. Williams said of Bethlehem's prospects in the coming months. But because of the company's decision to concentrate on competitive lines at Burns Harbor and Sparrows Point, "I think we have staying power," he said.

Not all members of the audience were convinced, however.

"When are you going to manage something so it turns a profit?" asked Mike Kindness, a worker at the soon-to-be-closed

track-making plant in Steelton, Pa.

Mr. Williams said the company's productivity has doubled in the past decade and that several operations, especially Sparrows Point and Burns Harbor, are doing well.

But businesses such as track-making don't have any prospect of profitability unless completely overhauled and rid of Bethlehem's huge pension and health-care liabilities, he said.

Like many big and long-lived steel companies, Bethlehem has a large number of retirees drawing pensions.

There are more than two pensioners for each of Bethlehem's 27,500 workers.

The biggest applause of the two-hour session came after comments by Don Trexler, president of a United Steelworkers local at the troubled Bethlehem, Pa., construction-steel plant. Mr. Trexler asked company executives to save the company's hometown plant from threatened closure.

"Our name is the corporate name," he said. Mr. Williams said that although there was no prospect of a return to profitability for the track-making division, Bethlehem had hopes for the company's original plant.

In other matters, Mr. Williams said Bethlehem hasn't felt any pain from the expiration of voluntary restraint agreements that limited the amount of steel Japanese and European steelmakers could sell in the United States.

Still, he said, Bethlehem is collecting information to file charges of "dumping," or selling below cost, against many of its international competitors.

Three months ended 3/31/92

.... .....Revenue... ... ....Net... ..... .....Share*

'92.......995,400,000.......(44,600,000).....(0.66)

'91......1,055,600,000......(39,200,000).....(0.60)

% change..-5.7..... ..... ....--... ...... .....--

* Earnings applicable to common stock.

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