Bethlehem Steel to cut 500 jobs across U.S.

100 salaried posts at Sparrows Point among the reductions

Steel industry

February 03, 2000|By Robert Little | Robert Little,SUN STAFF

Bethlehem Steel Corp. will cut more than 500 nonunion jobs from its nationwide work force this year, as the steelmaker struggles to recover from deflated prices and five straight money-losing quarters.

About 100 workers will be cut from among the 650 salaried engineers, foremen and supervisors at Bethlehem Steel's Sparrows Point Division in Baltimore, company officials said.

The rest of the cuts will come from other Bethlehem locations. The company's salaried, nonunion work force includes about 4,500 people throughout the country. The company's union work force of about 10,500 employees will not be affected.

"Bethlehem regrets the effect this action will have on its employees," the company said in a statement. "However, business conditions in the domestic steel industry necessitated this cost-reduction action."

The job cuts are designed to reduce costs and improve performance at the Bethlehem, Pa.-based company, which reported a net loss last year of $183 million. Company officials said that one-third of the job cuts have already been made, and that they hope to eliminate the remainder of the positions through attrition by the end of 2000.

Bethlehem Steel officials placed blame for the company's recent performance firmly on foreign steel companies, which they have accused of unfairly "dumping" steel in the United States at prices below production costs.

But prices have started to rise, and Bethlehem Steel's fourth-quarter net loss of $38 million was less than most analysts expected. With a leaner work force and improved pricing, the company should become profitable in 2000, some analysts say.

"You've got to attack costs with a vengeance in this industry, and it looks like that's what they're doing," said Richard Aldrich, an analyst for Lehman Brothers. "What I've been hearing out of Bethlehem's management has been encouraging on the cost side."

Job cuts, mostly of hourly employees, have been a recurring phenomenon at Sparrows Point, which employed more than 30,000 workers in the 1960s but has been trimmed down to 4,325 employees today. Meanwhile, company officials have held up their Baltimore mill as a model of cost-cutting and efficiency.

The Sparrows Point plant is undergoing a renovation, including construction of a $300 million mill for cold-rolled steel, that is designed to let it operate with fewer workers. Members of the United Steelworkers of America agreed to job cuts in 1998 that allowed the mill to be built.

The mill should be completed this year.

"The company has been injured recently by foreign steel," said Ted Baldwin, a spokesman for Bethlehem Steel in Baltimore. "This is an attempt to become more competitive."

Bethlehem shares closed unchanged yesterday at $6.625.

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