Steel makes plea for bailout

Senate panel hears recipient, Beth official seek relief on benefits

March 15, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

WASHINGTON - Gertrude Misterka suffers from diabetes, asthma, high blood pressure and high cholesterol, and she has the medicine cabinet to prove it. In the past 14 months, the 65-year-old Baltimore widow has spent $936.53 on her medication; were she not covered by Bethlehem Steel Corp.'s health-care plan, she told a Senate panel yesterday, that tab would have been more than $6,700.

"If I lose my insurance, my health will suffer and I really don't know what will happen to me," said Misterka, whose husband Charlie worked at Bethlehem's Sparrows Point mill for 30 years.

Misterka's testimony came as the steel industry and Steelworkers union and supporters continued to wage a campaign to win government relief from billions of dollars of retiree health care obligations - costs that, along with falling steel prices, have helped drive 32 U.S. steel companies, including Bethlehem, into bankruptcy in the last five years.

At yesterday's hearing, chaired by Maryland Sen. Barbara A. Mikulski, Bethlehem Chairman and Chief Executive Officer Robert S. "Steve" Miller Jr. urged lawmakers to relieve steel makers of their retiree health care costs.

"Congress must act quickly or the opportunity will be lost to address this problem," Miller said.

Bethlehem, he noted, had about 90,000 employees in the early 1980s and could produce 22 million tons of steel a year. Now it employs just 13,000 and can make only half that amount. Yet it is paying pensions and benefits to 95,000 retirees. Industrywide, there are 600,000 retirees and dependents.

"These types of liabilities constitute the major barrier to necessary consolation within the industry," Miller told the Senate Committee on Health, Education, Labor and Pensions.

Miller was joined in his appeal by Leo W. Gerard, international president of the United Steelworkers of America.

"No one is asking us to bail out the bosses, this is to help out real working people who have suffered," Gerard said.

In an interview before the hearing, Miller said some progress is being made on the consolidation front. A tentative deal for U.S. Steel Corp. of Pittsburgh to acquire Bethlehem - pending a partial federal takeover of legacy costs - collapsed due to lack of movement in Washington on the issue.

Miller confirmed that the Brazilian steel maker Companhia Siderurgica Nacionale (CSN) is in talks with Bethlehem over a joint venture at its Sparrows Point plant. He said a deal, which would not include Bethlehem's other facilities, hinges on a new, more flexible labor contract with the United Steelworkers of America. He said if negotiations among the three parties goes well, a deal could be hammered out by the end of April.

If a deal goes through, CSN would help fund steel operations and Bethlehem would remain the corporate parent responsible for retiree health care and pensions - its so-called legacy costs. The tab for Bethlehem's retiree health-care costs alone are about $3 billion; industry wide the number is about $10 billion or $12 billion.

"Anything [Congress] can give us will help," Miller said.

Sen. Jay Rockefeller, a West Virginia Democrat, is expected to introduce legislation next week that would address legacy costs. The House is also working on a companion bill.

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.

President Bush last week imposed tariffs of up to 30 percent on a large number of steel imports - including 30 percent levies on hot-rolled and cold-rolled steel, two of the main products made at Sparrows Point. Steel supporters say that was a good first step but that without legacy cost relief, the action will not do enough.

Yesterday, Mikulski noted that the government stepped in to help the airline industry after the Sept. 11 attacks and that farmers also get subsidies.

"I support that, but there's more than one kind of producer needed to keep America strong and independent," she said. "If agriculture gets $8 billion for 10 years, let's try to do $10 billion for steel once. We're in a national crisis with steel."

But not everyone is on board. Many have expressed outrage at the idea that steelworkers might get taxpayer-funded health care while so many people have no health insurance at all.

Mikulski told Misterka, who gets $800 a month in Social Security payments and another $100 from Bethlehem, that various critics, particularly syndicated columnist George Will, have depicted steelworkers' benefits as lavish.

"Oh, really?" Misterka responded. "I'd say let him try doing what I have to do."

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