'Dumping' could cost Point jobs Layoffs possible if imports continue, Bethlehem Steel says

CEO reports the squeeze

Operating rates, production down

pricing affected


November 07, 1998|By William Patalon III | William Patalon III,SUN STAFF

Bethlehem Steel Corp.'s Sparrows Point Division has seen production fall and could face layoffs if the flood of cheap imported steel isn't stemmed, company Chairman and Chief Executive Officer Curtis H. Barnette said yesterday.

"We see at our Sparrows Point Division declines in our operating rates and production; this has very adversely affected pricing," Barnette said.

Layoffs could "very definitely" occur if foreign steelmakers keep "dumping" their wares on the U.S. market, he said, though he did not quantify the possible timetable or depth of any job cuts. Right now, about 4,900 people work at Sparrows Point, most of them unionized.

Steel companies, led by Bethlehem, the nation's No. 2 steelmaker, claim that foreign steel companies are "dumping" steel on the U.S. market -- a predatory pricing tactic that violates trade law and could bring about quotas, punitive tariffs or other sanctions if proved to have occurred.

Yesterday's announcement came one day after Barnette, the heads of other steel companies and the head of the United Steelworkers of America union had a one-hour White House meeting with President Clinton and a handful of Cabinet officials, including Treasury Secretary Robert Rubin. It was a continuation of a campaign that's been dubbed "Stand Up for Steel" and that has seen Big Steel join hands with the steel workers union. The campaign has been backed by millions of dollars in advertising, intense lobbying from members of Congress and the repeated claim that dumped steel will cost many of America's 175,000 steel workers their jobs.

To date, no layoffs attributable to the dumping have occurred at Sparrows Point. Barnette and other Bethlehem officials declined say by just how much production has declined at Sparrows Point. A year ago, like most other U.S. steel mills, the Sparrows Point Division's steel plant was running at about 100 percent capacity, they said.

Paul J. Wilhelm, president of the Pittsburgh-based USX-U.S. Steel Corp., said his company's facilities are running at about 75 percent capacity.

On Wednesday, USX-U.S. Steel, the nation's largest steelmaker, said it would throttle back operations and fire workers at a Philadelphia-area plant it says has been hit hard by the record level of unfairly priced imports.

The meeting with Clinton administration officials was the third since Sept. 30 -- the day Big Steel filed dumping charges against companies in Japan, Russia and Brazil -- but was the first to actually include the president. Barnette and other officials repeatedly declined to provide details of the meeting or say what Clinton promised to do -- if anything.

The impetus for much of this problem is the so-called Asian contagion, an economic meltdown that began in Southeast Asia a year ago but that has since spread to Latin America and Russia.

With the lure of business in Asia, companies in many industries the past few years bulked up their industrial capacity in hopes of capturing market share there. But the meltdown, which now even threatens the U.S. economy, has created what some experts have termed a "global glut" in factory capacity, which means producers need to find customers wherever they can.

Four of Japan's five largest steelmakers said profits for the fiscal year ended Sept. 30 fell as demand plummeted from customers such as automakers at home and from other customers in its traditional Southeast Asia markets.

It's even worse for nonmarket economies such as Russia, where a paucity of hard currency prompts some of the government-run firms to sell their wares in this country for whatever they can get.

Steel imports have been rising at record levels. But not all U.S. companies are squawking about the dumped steel. Several U.S. makers of cars and earthmoving machinery like having access to the cheap steel since it lets them better compete with their offshore rivals.

And many U.S. steelmakers themselves use foreign coke or slab steel as raw materials in their own steel-producing operations -- even though many of these raw materials are themselves "dumped," said David Phelps, executive director of the Washington-based American Institute for International Steel, which represents steel importers and exporters.

The steelmakers don't complain about the dumped coke or slab steel, though.

"It's the ultimate in hypocrisy," Phelps said.

It's only when the steel companies start losing customers for the steel they make that they cry wolf and file dumping petitions.

Said Phelps: "When the going gets tough, the tough call their lawyers."

Pub Date: 11/07/98

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