Beth Steel to upgrade Burns Harbor caster

`Multimillion-dollar' job awarded to GSE Systems

August 21, 2002|By Kristine Henry | Kristine Henry,SUN STAFF

Bethlehem Steel Corp. said yesterday that it signed a "multimillion-dollar" contract with a Howard County company to upgrade the software and hardware it uses in the continuous caster at its plant in Burns Harbor, Ind.

The upgrade replaces a system installed 18 years ago; GSE Systems Inc. of Columbia handled the original software installation and won the new contract.

The software will allow operators to more easily identify problems that come up with the continuous caster, a piece of equipment that turns molten steel into slabs.

If a part breaks, it can cause other parts to malfunction, too, said Dion Freedman, GSE's vice president of process solutions. "The operator is inundated with alarms and has to figure out, `What is the root cause of the problem?' This new software will help to pinpoint it."

Bethlehem, which filed for bankruptcy protection in October, has been spending more in recent months on plant and equipment improvements. In the three months that ended June 30, it spent $41.4 million compared with $14.2 million in the previous three months. But that shouldn't necessarily be seen as a sign that the company is feeling more secure about its chances of surviving as a stand-alone operation.

"I don't think I'd read too much into it," said steel analyst Leo Larkin of Standard & Poor's.

He said it is likely that Bethlehem either simply couldn't put off the upgrade any longer or it is trying to make itself more attractive as an acquisition target or joint venture partner.

The upgrade is being done for both those reasons, as well as to increase the plant's competitiveness should it remain under Bethlehem's ownership, said Bob Johns, Burns Harbor's superintendent of information technology.

"We intend to be a surviving entity," Johns said, "so whether it's to make ourselves profitable as a stand-alone company or in a partnership, we have to take care of the assets we have."

Bethlehem declined to say how much the project will cost. Johns said GSE was awarded the contract because of the price and because going with GSE would eliminate the need to rewrite all the software.

The upgrade will begin in about nine months and take several months to complete; the work will be done during brief, regularly scheduled outages rather than in shutting down the system.

In other developments, the steelmaker filed federal documents showing its net loss narrowed last month. In the documents, filed with the Securities and Exchange Commission yesterday, Bethlehem said its sales last month declined 6 percent to $303 million compared with June, but its net loss shrank 45 percent to $25 million.

Cash and cash equivalents rose to $77 million from $62 million at the end of June.

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