Would-be buyer tours Beth Steel

Brazil's CSN meets with officials at Point, union leader says

`This is not a bad deal'

Plant has several potential acquirers, spokeswoman says

February 28, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Representatives from Brazil's largest steel maker toured Bethlehem Steel Corp.'s Sparrows Point plant yesterday as a precursor to a possible acquisition of the sprawling complex.

Executives from Companhia Siderurgica Nacionale (CSN) met with Sparrows Point President Van Reiner and discussed their plans for the mill should the sale go through, local union officials said.

Ron Allowatt, president of United Steelworkers of America Local 2610, which represents workers at Sparrows Point, said the CSN representatives were "kicking the tires" at the Baltimore plant yesterday.

"This [CSN] is not a bad deal from what I've been hearing," he said. "But there are a lot of loose ends that need to be tied and we do not know all the details yet."

A spokeswoman for Bethlehem, which employs about 3,500 in Baltimore County, said yesterday that the company has been speaking with a number of potential acquirers but that confidentiality agreements precluded further comment.

The bankrupt Bethlehem has a tentative agreement to be purchased by United States Steel Corp. of Pittsburgh, but that deal is contingent on a federal takeover of retiree health care costs that could run into billions of dollars and whose success is far from assured.

The deal with U.S. Steel also rests in part on what President Bush decides to do on steel tariffs. Following a finding by the International Trade Commission in October that the domestic steel industry has been harmed by imports, steel makers including Bethlehem and U.S. Steel and the union want him to impose 40 percent duties, with the revenue earmarked to pay retiree costs.

Bush is expected to announce a decision on tariffs by Wednesday.

Allowatt said he has heard that a deal with CSN is "80 percent complete" but that U.S. Steel is still in the running.

Robert S. "Steve" Miller Jr., chairman and chief executive of Bethlehem, told workers at a meeting earlier this month that CSN is considering the purchase and that it would keep the work force unionized, Allowatt said.

A new union contract would have to be negotiated no matter who buys Bethlehem or its assets.

Workers' main concern is that they retain their seniority and that health care benefits are not greatly reduced, said John Cirri, president of Steelworkers Local 2609, which represents workers at Sparrows Point's cold-rolled mill.

Cirri said he did not know enough abut CSN to say whether the plant would do well under its stewardship. "If none of our domestic companies want us," he said, "I'm open to anybody."

CSN has indicated that if it buys Sparrows Point, it will widen the caster in the hot mill, allowing more types of products to be made, Allowatt said. He said it would also add another furnace and run the large blast furnace at full capacity.

Allowatt also said CSN has its own iron ore mines, so it could provide its own raw materials at a considerable savings.

CSN was founded by the Brazilian government in 1941; it was privatized in 1993, a company spokesman in Rio de Janeiro said yesterday. The spokesman did not have details about the meetings at Sparrows Point.

The company makes hot- and cold-rolled flat steel, galvanized sheets and tin mill products for the packaging, automotive, domestic appliance, construction, pipe and machinery and equipment industries.

In June, CSN bought its first U.S. steel maker, Heartland Steel of Terre Haute, Ind., which like Bethlehem was in bankruptcy. It had shown interest in the idle plants of bankrupt LTV Corp., which were auctioned yesterday. The Cleveland steel maker said the winning bidder was W.L. Ross & Co., which invests in distressed companies. A bankruptcy judge has scheduled a hearing on the sale today.

Sparrows Point has been in operation since 1892 and The Point, as it was commonly called, was a dominant employer in the Baltimore area, with more than 50,000 workers at its peak during World War II.

Hit hard by the rise of imports at lower prices and the high cost of pension and health-care benefits for its retirees, Bethlehem filed for Chapter 11 protection Oct. 15, 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.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.