Beth Steel to cut 400 salaried positions

Companywide move is in addition to earlier reductions

November 13, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

Bankrupt Bethlehem Steel Corp. said yesterday that it will eliminate 400 more salaried positions by the end of January in an effort to cut costs.

The 16 percent reduction in nonunion employees is to be companywide. Officials at the steel maker could not say yesterday how many employees at the Sparrows Point division in Baltimore County will be affected. The local plant has about 535 salaried workers in addition to the nearly 3,000 hourly workers, who are represented by the United Steelworkers of America.

This is the third time since spring that Bethlehem has said it is cutting salaried personnel. In May it announced that 140 jobs would be cut company wide, and in July it said another 300 would be eliminated. When the salaried personnel cuts are complete, Bethlehem's nonunion work force will be about 2,100 - 40 percent fewer than the 3,500 of January 1999.

"This is aimed at reducing costs as a result of what unfortunately are very difficult business conditions facing the company," Bethlehem spokeswoman Bette Kovach said. She declined to say whether more cuts are possible.

Some employees who meet certain age and length-of-work criteria will be eligible for pension payments 90 days after being laid off instead of the normal one to two years that employees must generally wait if they leave the company before accumulating 30 years of service.

Bethlehem filed for Chapter 11 bankruptcy protection in mid-October and is in the midst of renegotiating its contract with the Steelworkers. The company has said it would like to cut 2,000 union jobs - including 800 in Baltimore. That figure has not been agreed to by union officials.

When the country's third-largest steel maker filed for bankruptcy protection, Bethlehem said it had $4.2 billion in assets and $6.75 billion in liabilities. That included an unfunded health care obligation of nearly $3 billion. Its pension fund is underfunded by $1.85 billion.

Bethlehem has 13,000 current employees and 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.

High costs associated with pensions and health care coupled with stiff competition from inexpensive imports has been deadly for Bethlehem and other domestic producers. So far this year Bethlehem, the 25th U.S. steel maker to file for bankruptcy protection since late 1997, has lost $1.4 billion, and, as of Sept. 30, it had a negative net worth, with its shareholder equity at minus $303 million.

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