Bethlehem Steel Corp., which filed for bankruptcy protection last month, is seeking to eliminate 15 percent of its work force in order to cut costs, according to the union that represents its workers.
The cuts would total 2,000 salaried and hourly workers, including 800 at Sparrows Point in Baltimore. The union stressed yesterday that the number is simply on Bethlehem's wish list and that the final number could be smaller.
"The figure was Bethlehem's opening proposal in the bargaining," said United Steelworkers of America spokesman John Duray.
"It's something the company says it needs, but from our perspective it cuts too deep; it's cutting into muscle and not just what little bit of fat there is, if any."
A spokeswoman at Bethlehem declined to comment.
The country's No. 3 steel maker filed for Chapter 11 bankruptcy protection Oct. 15. It listed $4.2 billion in assets and $6.75 billion in liabilities, including an unfunded health-care obligation of nearly $3 billion.
Bethlehem's pension fund is underfunded by $1.85 billion.
So far this year the steel maker has lost $1.4 billion, and, as of Sept. 30, it had a negative net worth, with its shareholder equity at minus $303 million.
Its shares closed yesterday at 36 cents, down 2 cents.
The bankruptcy filing meant the company could renegotiate its contract with the Steelworkers.
The two sides have been meeting in Pittsburgh since Oct. 29.
"Directionally, the [2,000] number is right, but we could end up with more or less," said Van Reiner, president of the Sparrows Point division. "Our goal is to preserve as many jobs as we can and reduce costs to compete in this very competitive marketplace."
Officials at the state's Department of Business and Economic Development, which provided $5.5 million for the $300 million cold mill Bethlehem opened at Sparrows Point last year, declined to comment on the possible job cuts.
"We do not want to comment until we have the facts," said spokeswoman Tori Leonard. "We have not been notified officially."
News found on Web site
The news of Bethlehem's desired job cuts was first posted on the Web site of a Steelworkers' local union in Indiana.
The posting also said that Bethlehem is "seeking significant reductions of their health care obligations to retirees and their dependents, and would also expect us, as active employees, to pay - out of pocket - a substantial portion of our health care costs as well."
Bethlehem has 13,000 current employees - including nearly 4,000 in Baltimore - but covers the health care costs of 130,000 people, including current and former employees and their dependents. That commitment leaves the steel maker with an annual health care bill of $300 million.
Hard times for steel
Most domestic steel producers are struggling. Bethlehem was the 25th U.S. steel maker to file for bankruptcy - not only because of the costs associated with pensions and health care, but also because more inexpensive imported steel is being sold in this country.
About 31 million tons of steel were imported into the United States in 1997, jumping to 41.5 million the next year. The numbers have since fallen but are still above 1997 levels.
Prices have fallen in turn and hot-rolled steel that sold for more than $350 a ton four years ago is now sold for less than $250.
Bethlehem and the union are seeking tariffs and quotas that would limit the amount of steel imported into the United States.
"Hopefully," Duray said, "we can work this out in a way so that everybody will be making steel at the end of the day."