Bethlehem to loosen reins at plants Sparrows Point to be own unit

January 16, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

In a push to make its steelmaking operations more efficient and accountable, Bethlehem Steel Corp. is on the verge of creating two separate companies to operate its Sparrows Point plant in Baltimore County and its Burns Harbor, Ind., steel mill.

The creation of a semi-autonomous Sparrows Point operation could be a boon to the Baltimore area, as it would shift much of the unit's decision-making process from the Bethlehem, Pa., headquarters to Baltimore County.

Bethlehem spokesman Henry Von Sprecklesen said yesterday that the company has been working on plans for the transformation for several months. An announcement by the company could come as soon as Monday.

"It pushes the responsibility and accountability down to the people at the facility," Mr. Von Sprecklesen said.

The company's goal is to have separate business units at each of its steel plants, at Sparrows Point, Burns Harbor, Bethlehem and Steelton, Pa. Each plant would have its own president, key officers and possibly a board of directors. But they would still be wholly owned by Bethlehem.

The company took the first step in this process early last month when it created Pennsylvania Steel Technologies Inc. to run its steel plant in Steelton, which makes railroad rails, pipe and semi-finished steel products.

In addition to a new president, controller and vice presidents for planning and commercial operations, the new company created a five-member board consisting of Bethlehem corporate officers.

Sparrows Point and Burns Harbor are Bethlehem's key plants and account for 80 percent of Bethlehem's revenues. This amounts to about $1.5 billion in steel sales for Sparrows Point alone. The Baltimore County plant produces about 3 million tons of steel sheet and plate products each year and employs about 5,800 workers.

Sparrows Point is now headed by Carl W. Johnson, a 29-year Bethlehem veteran, who was appointed vice president and general manager of the plant in August.

Burns Harbor, which makes about 4.5 million tons of steel annually, produces products that are similar to those made at Sparrows Point, but the plants sell to different markets, Mr. Von Sprecklesen said.

Most of the steel from Burns Harbor goes to the automotive industry, while the steel from Sparrows Point is sold for construction projects, Mr. Von Sprecklesen said. Both operations sell to steel service centers, which provide steel to small buyers, but this is primarily Sparrows Point's market, he said.

Economic development officials agreed that having an autonomous operation at Sparrows Point would only strengthen the company's ties to the community.

"My experience is you get more response from locally headquartered companies," said E. Neil Jacobs, director of economic development for Baltimore County. Local Bethlehem officials are already participating in economic development efforts in the county, and this could increase under the new structure, Mr. Jacobs said.

"Bethlehem has always been a very good corporation, and this opens up more opportunities to work with them in other business activities," he said.

Robert Keller, president of the Greater Baltimore Committee, said he did not have enough information to say how an independent Sparrows Point would affect the area, but it is typically "very helpful" when companies are headquartered here.

The amount of goods and services bought locally, however, would probably not change significantly, according to J. Clarence Morrison, vice president and senior metals analyst for Prudential Securities Inc.

The plant already buys a great deal of its supplies locally, he said.

GOING THEIR SEPARATE WAYS

Sparrows Point

Annual revenues: $1.5 billion

The plant produces 3 million tons of steel annually:

Product.. .. .. .. .. .. .. .. .. .. ..Customers

Hot rolled sheet.. .. .. ..Construction and service centers

Cold rolled sheet.. .. .. .Construction and service centers

Tin-plated steel.. .. .. .. ...Used in steel can production

Plate.. .. .. .. .. .. .. .Construction and service centers

Galvanized sheet.. .. .. ..Construction and service centers

Galvalume sheet .. .. .. ..Construction and service centers

Burns Harbor, Ind.

Annual revenues: $1.9 billion

The plant produces 4.5 million tons of steel annually:

Product.. .. .. .. .. .. .. .. .. .. ..Customers

Hot rolled Sheet.. .. .. .. .. .. .. .. Automotive

Cold rolled Sheet.. .. .. .. .. .. .. ..Automotive

Plate.. .. .. .. Heavy construction equipment and machinery

Galvanized sheet.. .. .. .. .. .. .. ...Automotive

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