Bethlehem Steel Corp.'s chief executive continued to press his case yesterday for government assistance in the company's bid to merge with U.S. Steel, and said that if lawmakers fail to act, Bethlehem could be forced to liquidate.
"The path we're on is a road to nowhere," Robert S. "Steve" Miller Jr. said yesterday during a trip to Bethlehem's Sparrows Point plant, which employs 3,500 in Baltimore County. "We have inadequate capital to meet our future needs."
Miller was at the plant for scheduled meetings with news reporters and with employees. The employee meetings were not open to the news media.
U.S. Steel, the country's second-largest steel maker, announced Monday that it is in talks to acquire Bethlehem and Wheeling-Pittsburgh Steel Corp., both of which are in Chapter 11 proceedings. But the companies say they can consolidate only if Congress and the Bush administration agree to pay the health-care costs for the approximately 600,000 retirees of the companies being acquired.
Miller said yesterday that the tab would probably be about $1 billion a year.
"If they do this, you can have a great new strong domestic integrated steel company in America, and that is something worth having from an economic and a national defense standpoint," Miller said.
"And if you don't act, then you're going to see the chaos and disruption, and the virtual destruction of an industry."
Opponents of the plan are already voicing opposition. The head of Nucor Corp., which makes steel from scrap, uses nonunion labor and has become the country's largest steel producer, said yesterday that he will fight any government assistance.
"The proposal by [U.S. Steel] is nothing more than an attempt to get the federal government to help a couple of companies at the expense of the rest of the U.S. steel industry and the taxpayers," Chief Executive Officer Dan DiMicco said in a statement. "Our government should not be picking favorites within the industry."
Bethlehem, the country's No. 3 steel maker, filed for bankruptcy protection in mid-October, listing $4.2 billion in assets and $6.75 billion in liabilities, including an unfunded health-care obligation of nearly $3 billion and a pension fund that is short $1.85 billion.
Its shares rose 28 cents yesterday, or nearly 60 percent, to close at 75 cents.
Miller said he has discussed the issue of government intervention on several occasions with Commerce Secretary Donald L. Evans - including a meeting Nov. 28 that included the heads of U.S. Steel and the United Steelworkers of America.
He acknowledged yesterday that lawmakers face "enormous policy issues" in considering the proposal.
"It's not only a narrow economic decision as to fixing the steel industry, it's what does it mean for all the other industries?" Miller said.
"And you layer on top of that the trade negotiations with other countries where this is an important and very emotional and controversial piece. They've got a lot to think about."
Although often at odds - and now in contract negotiations with Bethlehem in light of the bankruptcy filing - the United Steelworkers has thrown its support behind the steel makers' plan.
"The reality is that if we can't find creative solutions to assure health care benefits and pensions for the hundreds of thousands of steel retirees and surviving spouses who are at risk, there can't be meaningful consolidation of the steel industry," said union President Leo W. Gerard.