Angelos gets 2nd try at BethShip Bethlehem-WHX talks end after contract's rejection by union

April 17, 1997|By Sean Somerville | Sean Somerville,SUN STAFF

Bethlehem Steel Corp. said yesterday that it has cut off exclusive negotiations with WHX Corp. on the sale of the Sparrows Point shipyard, reviving the possibility of a purchase by Baltimore Orioles Chief Executive Peter G. Angelos.

The steel company's announcement came one day after the BethShip Inc. yard workers union rejected WHX's final offer for an employment contract. The yard faces closure in June if it isn't sold.

Paul Bucha, a WHX director, said he told Bethlehem Steel that WHX couldn't close the deal without a labor agreement. "They said, 'We have to consider other options,' " Bucha said yesterday. "I said, 'Good luck.' "

In a terse statement, Bethlehem Steel said that "its exclusive negotiations with WHX have been discontinued." The company said it "will now seek other qualified buyers on satisfactory terms for the sale of the yard, and we hope to be able to complete a transaction in the second quarter."

WHX, which offered about $27.5 million for the yard, was chosen in February to negotiate exclusively with Bethlehem. Angelos' group offered about $20.5 million. A third buyer, whose identity could not be confirmed, offered about $23 million. Bethlehem's asking price was about $30 million.

Angelos wouldn't discuss price yesterday. He said conversations with Bethlehem officials indicate that the company wants to sell him the yard.

"We expect to meet with Bethlehem in the very near future," Angelos said. "We have a pretty good idea of what the company is seeking and we're going to do what we can to satisfy those requirements. I'm confident we can get together."

Since early February, WHX and Bethlehem had disclosed little about their negotiations. In more public negotiations between the union and WHX, workers complained that WHX wanted concessions worth about $8 an hour, including elimination of seniority and a cutback in overtime pay.

Workers at the yard earn about $13.47 an hour and fringe benefits worth $8.73. Employment there, which depends on outside repair contracts, recently increased from about 700 to 900.

Bucha dismissed the $8 estimate. He said the yard needs changes to be competitive and that most workers would see pay increases because of an increase in business. He also said the union failed to consider the benefits of a profit-sharing plan.

Bucha said the most recent rounds of talks -- Thursday, Friday and Monday -- seemed to be progressing well, when the union abruptly rejected WHX's final offer Monday. WHX left the offer on the table until 6 p.m. Tuesday.

"The union has rejected us as a buyer, except on the union's terms," Bucha said.

Murphy Thornton, president of Local S-33 of the Industrial Union of Marine and Shipbuilding Workers, which represents the BethShip workers, said both sides moved, but WHX's offer remained insufficient.

"Our intent was not to kill the deal," Thornton said. "We really want a buyer."

Former Rep. Helen Delich Bentley, now a maritime consultant who worked for Angelos' group during the initial bidding, said delays in selling the yard have been costly.

"We lost a $100 million conversion job for a [Navy] Military Sealift Command ship," she said. "That's more than a year's work for hTC several hundred people."

Angelos said he would not need to conclude an agreement with the union before buying the yard. He said his group's initial evaluation of the yard indicated that concessions weren't necessary.

"We don't want to buy this company with the wages of the employees," he said. "We expect 100 percent cooperation from the labor side and they can expect 100 percent from ours."

If Angelos succeeds in buying the yard, he has said he would invest about $15 million for improvements to make it a top repair facility.

In three to five years, Angelos said, he would invest another roughly $50 million to equip the yard for building ships -- a pursuit that it abandoned about seven years ago.

Pub Date: 4/17/97

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