Bethlehem criticizes 'unfair' trade practices Company says ability to modernize is hurt

June 30, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

WASHINGTON -- The head of Bethlehem Steel Corp. yesterday said unfair foreign trade practices had prevented the nation's No. 2 steel maker from getting the financing needed to fully implement its modernization goals.

The company's postponed capital projects "are pent up like a dam about to break," Curtis H. Barnette, Bethlehem's chairman and chief executive officer, told the International Trade Commission. "Our ability to modernize is absolutely essential to our fate," he said.

Mr. Barnette made his comments at the first day of a two-day hearing to determine whether unfair trade practices by foreign steel producers have injured domestic steel makers. Witnesses included congressmen, other U.S. steel company officials and labor leaders and overseas steel producers and importers.

The hearing follows a U.S. Commerce Department finding that foreign steel producers are selling flat-rolled steel products at below-market prices and are receiving subsidies from their governments -- practices that violate U.S. trade laws.

Temporary anti-dumping duties imposed by the Commerce Department last week will become permanent if the ITC finds that the U.S. steel industry has been injuried.

The ITC is to vote in a public meeting the last week of July and must issue a decision by Aug. 4.

Mr. Barnette and other steel executives maintained repeatedly that U.S. steelmakers have invested $35 billion in modernization in the last 10 years on the assumption of fair trade.

"That simply hasn't happened," Mr. Barnette said.

Bethlehem has had three straight years of losses, weakening its financial strength to the point that it finds it difficult to raise money in the capital markets. As a result, Bethlehem has had to put off capital projects, such as a coal injection project at its Burns Harbor, Ind., plant, Mr. Barnette said.

Bethlehem has spent more than $2 billion for modernization in the last five years, including a new hot strip mill at the Sparrows Point plant in Baltimore County.

Along with losses, the number of steelworkers nationally has dropped from 391,000 in 1980 to 170,000 today, the steel executives said.

At Sparrows Point, the work force has dropped from 16,600 in 1980 to about 5,500.

The U.S. steel makers are also accusing the foreign producers of carving up the world market with secret trade agreements limiting imports to various countries.

"There has been a 'cartelization' of most of the world [steel] trade," said Alan W. Wolff, an attorney for the American steel companies.

Mr. Wolff said the accusations are based on interviews with steel importers in Europe, Japan and Canada who say steel producers restrict their shipments based on agreements with other companies. In fact, Mr. Wolff said documents have been filed with the ITC detailing trade quotas for different countries.

All these international restrictions have left only one major market in which to dump excess steel -- the United States, Mr. Wolff said. "The organization of this cartel, makes the threat [of selling below-market prices] more real," he said.

In his opening remarks, William Barringer, an attorney for Japanese steel makers, called the cartel accusation "discredited world conspiracy theories."

However, Rep. Helen Delich Bentley said the dividing up of steel trade has been the "worst kept secret" for decades. "This collusion has never stopped," said the Baltimore County Republican.

Mrs. Bentley also said foreign producers are supported by subsidies from their governments. "We can't put up a private industry to compete against governments," she said.

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