Ispat ends effort to buy Bethlehem unit

April 02, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

After months of bitter, fruitless labor negotiations, Ispat Mexicana S.A. de C.V. has called it quits in its effort to buy the Bethlehem Steel Corp.'s closed bar, rod and wire division.

In a statement issued yesterday -- the same day its letter of intent with Bethlehem expired -- the Indian-owned company said it would not buy the division because it could not reach an dTC agreement with the United Steelworkers of America.

Bethlehem responded by saying it would renew its search for a buyer for all or part of the division.

The division, which was closed by Bethlehem Steel last summer, had about 2,000 workers at mills at Sparrows Point in Baltimore County;Johnstown, Pa.; and Lackawanna, N.Y. The Sparrows Point mill, which closed Aug. 15, had 340 workers.

The division's largest operation is in Johnstown, which employed more than 1,500 workers.

Ispat's announcement brought to a close three months of negotiations that pitted one of the United States' most powerful unions against a foreign steel company that wanted to establish its first U.S. plant.

While the union fought to retain some of benefits it had won for workers over the years, the company wanted an agreement that called for lower wages and the elimination of one of organized labor's prized possession -- the seniority system.

Ispat Mexicana is part of the international Ispat operation, based in Jakarta, Indonesia. The company has an annual steelmaking capacityof 4.5 million tons.

Despite the intervention of Pennsylvania Gov. Robert P. Casey and U.S. Rep. John P. Murtha, D-Pa., the gap between the two sides could not be closed. Each side accused the other of being unmovable.

The last episode in the negotiations came on Monday when the Steelworkers rejected Ispat's latest offer, calling it a "hoax."

"It was our intention from the very beginning to reach agreement on a contract with Ispat," Andrew V. Palm, the union's chief negotiator, said in a statement. "But Ispat never really negotiated."

But in its statement yesterday, Ispat said it had made a good-faith effort, including its last offer to reopen the five-year contract after three years if the company had an after-tax profit of $54 million.

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