N.Y. bidder favored for BethShip Bethlehem is talking solely with WHX, union leader says

'It's champagne time'

Both parties decline to confirm deal

rival Angelos disappointed

February 08, 1997|By Sean Somerville and Michael James | Sean Somerville and Michael James,SUN STAFF

Bethlehem Steel Corp. has chosen WHX Corp. of New York as the buyer of its Sparrows Point shipyard over a group led by Baltimore Orioles chief executive Peter G. Angelos, union officials said yesterday.

Murphy Thornton, head of the union that represents a majority of BethShip's 700 workers, said Bethlehem officials yesterday morning told him the company is negotiating exclusively with WHX and rated prospects of a sale at 99 percent. The yard faces closure if it is not sold.

"It's champagne time for us, because it's still going to be a shipyard," said Thornton, president of Local Lodge S33 of the Industrial Union of Marine & Shipbuilding Workers of America/International Association of Machinists and Aerospace Workers. "We're still alive. It will mean a lot for the families of the workers."

Angelos said he was disappointed. "We believe we made a substantial offer," he said. "Until 24 hours ago, we thought we were clearly in the lead."

Former Rep. Helen Delich Bentley, a consultant for Angelos group, said WHX's offer was substantially higher than the Angelos group's, but neither side would disclose their offers. Bethlehem Steel is believed to be seeking about $30 million for the yard.

Bethlehem officials would neither confirm nor deny Thornton's account, saying only that it is "making progress" and "having constructive negotiations." The company said it hoped to have an agreement by the end of March.

Paul Bucha, a member of WHX's board who is leading the effort to buy the yard, said a purchase is not final. "We still have to negotiate a contract with Bethlehem," he said.

New York-based WHX is a holding company with subsidiaries that produce flat-rolled and fabricated steel products. It employs almost 6,000. The company's Wheeling-Pittsburgh Steel plants in Ohio, West Virginia and Pennsylvania are in the fourth month of a strike by 4,500 members of the United Steelworkers of America.

Bethlehem Steel said in October that it would close the BethShip Inc. Sparrows Point yard and three other unprofitable Bethlehem divisions if they could not attract buyers. The company said the yard suffered in recent years from a weak ship-repair market.

Yesterday, as BethShip workers changed shifts, Elroy Henderson, who has been a welder at the yard for eight years, said he has been laid off "more times than I could ever count."

"It can't get any worse, no matter who takes over. It can only improve," said Henderson, 45, of Baltimore. "I really have a part-time job. I only made $5,000 last year. I need steady work, I can't feed my family like this, with all these layoffs."

Donald Hager of Essex, an acetylene burner who has worked at the shipyard for 26 years, said he was one of 23 shipfitters and seven burners who were laid off yesterday.

He said he heard the news that he was being laid off at virtually the same time he heard the news about a new owner. "I've got to go home and tell my wife again that I got laid off," Hager said. "I was laid off Jan. 13, too. It's just in and out, in and out. I hope somebody can improve things."

Hager said his shop steward told him and several of his friends that "Pittsburgh is taking over," meaning Wheeling-Pittsburgh Steel. "They told us it was a done deal."

He said he is worried about WHX Corp. after reading about the strike at the company's steel plants.

"I was hoping for Angelos, because my brother's met him and said he's a helluva nice man," Hager said.

Angelos didn't rule out the possibility that he might re-emerge as prospective buyer. Referring to the Wheeling-Pittsburgh Steel strike, a dispute where pension benefits are at issue, Angelos said, "Why introduce that labor-management relationship to Baltimore?"

He also said the dispute might make it difficult for WHX to close the sale. "I don't think the matter is closed. There's a possibility the purchaser will not be able to make the deal." Angelos declined to comment further.

Thornton said the labor dispute didn't trouble him. "I'm not going to comment or take sides on it," he said.

He also said he didn't want to speak about concessions. "I don't want to speculate on what they will or will not want," he said. "We said from the outset that we would negotiate with anybody who wanted the shipyard. I never heard about WHX until this morning. I've got no feel for them other than they want the shipyard and they're ready to go to work."

Founded in 1890 by the Maryland extension of Pennsylvania Steel Co., the roughly 200-acre shipyard at Sparrows Point boasts one of the largest graving docks, or excavated basins, on the East Coast. It is 1,200 feet long and 200 feet wide.

Bethlehem Steel purchased Pennsylvania Steel -- and the shipyard -- in 1916. The yard reached its peak during World War II in 1943, when it employed 8,000 people. At the time, Sparrows Point yard was one of Bethlehem Steel's 15 shipyards, which together employed 180,000 people -- well over half the steel giant's 300,000-member work force.

Over the following decades, shipbuilding at BethShip declined. Commercial shipbuilding disappeared in the 1980s with the elimination of federal subsidies. The yard diversified into tunnel construction and ship repair work.

"That yard ought to be a competent, efficient, profitable repair yard at a minimum," said Tim Colton, an Arlington, Va., industry consultant. "It could also excel in conversion and industrial fabrication."

Angelos had said his aim was to modernize the yard for repairs and conversions, and return it to shipbuilding -- changes that would have cost about $65 million.

Bucha of WHX wouldn't outline the details of the company's plans because the deal has not been finalized. "It would be wonderful" to get the yard, he said. "We think it's a good business. We're impressed with the management at the yard and we're impressed with the prospects."

Bucha said the company would pursue a general strategy of boosting sales.

Pub Date: 2/08/97

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