Bethlehem, U.S. Steel plan joint research

September 14, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

The nation's two largest steel companies said yesterday that they would conduct joint research and development in an effort to maintain a technological edge over their competitors.

Bethlehem Steel Corp., the No. 2 steelmaker in the country, and U.S. Steel Group, the nation's largest steel company, said that for the next 18 months they will exchange proprietary information on such matters as iron- and steelmaking, casting, rolling and finishing processes, and instrumentation development. At the end of the period, the companies plan to evaluate the results.

"The accelerating pace of technological advances and the increasing globalization of the marketplace call for new thinking and more efficient approaches in steel research and development," a joint release from the two companies said.

Neither company would say how much money they planned to devote to the joint research.

Bethlehem Steel, which owns the Sparrows Point steel mill in Baltimore County, spent $24 million on research and development last year. U.S. Steel, which is part of USX Corp., spent $22 million.

The agreement was part of a growing trend of collaboration by U.S. companies on research to keep up with European and Japanese competitors, which have long histories of working cooperatively.

In the past six years, the American Iron and Steel Institute, the steel industry's trade group, has launched a series of research projects funded by member companies and the federal government. These efforts have included studies about on how to streamline the steelmaking process and about developing equipment to produce better steel more efficiently.

In an earlier joint effort in the 1980s, Bethlehem and U.S. Steel tried to perfect continuous thin slab casting of steel.

But no commercial application of that research was realized, said Bethlehem spokeswoman Elizabeth A. Kovach.

Cooperative efforts would be particularly helpful in the steelmaking industry, where years of losses have reduced the amount of capital available for research, according to Alan R. Beckenstein, a professor of business administration at the Darden Graduate School of Business Administration at the University of Virginia.

"You could see a greater benefit there than in some of the higher technology," he said.

To allow such joint ventures, the federal government also has been more lenient in the past decade in its antitrust efforts.

But some safeguards are required, Mr. Beckenstein said.

"You must make sure the collaboration on that doesn't turn into a price-fixing scheme," he said.

The two companies will file notices of the agreement with the Department of Justice and the Federal Trade Commission, Ms. Kovach said.

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