Steel Companies

A U.S. trade panel cleared the way yesterday for the government to slap punitive tariffs as high as 67 percent on imported steel from Japan.By a 6-0 vote, the International Trade Commission ruled that U.S. steel mills have been hurt by cheap steel made by three Japanese companies and dumped on the U.S. market.The ruling allows the Commerce Department to impose the sanctions, which will effectively price Japanese steel out of the market. The department is expected to impose the tariffs within weeks.

U.S. steelmakers will ask the government to slap punitive tariffs on imports of cold-rolled steel, a traditionally high-profit product used in such wares as appliances and cars, executives of Bethlehem Steel Corp. and other American companies say.At its Sparrows Point Division in Baltimore County, Bethlehem Steel is spending an estimated $300 million to replace its outdated mill for making cold-rolled steel.Bethlehem, USX-U.S. Steel Corp. and Steel Dynamics Inc. executives allege that some foreign steelmakers are "dumping" cold-rolled steel on the U.S. market -- selling it here for less than in their home market.

This is an excerpt of a Los Angeles Times editorial that was published yesterday:LAST month, Washington determined that Japan, Brazil and Russia were selling steel in the United States at less than fair value and causing injury to the domestic industry. The Clinton administration slapped prohibitive duties on Japanese and Brazilian steel and forced Russia to restrict its exports -- a tough but fair response. But it was not enough for the steel industry or for the House, which recklessly voted to limit all steel imports.

Bethlehem Steel Corp. and U.S. Steel Group will be the first of the nation's steel companies at the bargaining table this round when they begin talks Monday with the United Steelworkers of America in hopes of reaching an early labor settlement.Both the industry and the union are hoping to reach a deal quickly -- as early as May 28, according to some sources -- because they want to present a united front to government trade officials who are expected to rule in June on allegations that foreign steel companies violated U.S. trade laws by "dumping" cheap steel on the U.S. market.

Steel workers at Bethlehem Steel Corp. and USX Corp.'s U.S. Steel Group will begin voting within several days on new five-year labor contracts that would grant wage increases and boost pension payouts.Paper ballots should be mailed in the next day or so, according to the United Steelworkers of America union.Once they receive their ballots, union members will have 21 days to vote on the tentative contracts. The goal is to ratify the pacts before they expire at midnight July 31.The agreements -- which differ only in minor details -- include annual pay raises and significant increases in pension benefits, though officials with both companies and the union have declined to comment.

The company that nearly purchased Bethlehem Steel Corp.'s shipyard two years ago is back, but this time it is not clear whether it's trying to buy or sell.WHX Corp. said Monday that it had purchased 1.6 percent of Bethlehem shares. Rather than signaling a takeover bid, analysts said, the purchase might mean the New York firm is trying to lure Bethlehem into making a bid of its own for WHX's steel subsidiary."What it might be is a different approach; attack Beth hoping they'll turn around and take you out. It's the Pac-Man defense," said Charles A. Bradford of Bradford Research in New York.

For Ron Fritze of Perry Hall, the issue of illegally dumped foreign steel is hitting home -- literally.Fritze, a refrigeration technician and member of the United Steelworkers union at Bethlehem Steel Co.'s Sparrows Point Division, has seen all the media stories, union handouts and company reports on the impact that foreign steel, allegedly being sold at below-market prices, is having on the U.S. steel market. But a rally yesterday really heightened his awareness."If they start flooding the market and start driving prices down, it could have a real effect" on wages and maybe even U.S. jobs, he said.

Boosted by the decline of Asian currencies, steel imports are surging and worrying U.S. steelmakers such as Bethlehem Steel Corp.Steel imports hit record levels in April, rising to 3.26 million tons -- the highest monthly figure since the 1970s, according to the American Iron and Steel Institute. The April numbers are up 21.3 percent from March and 20.6 percent from a year ago."Imports are up substantially, to one of the highest months ever," said Curtis H. Barnette, chairman and chief executive officer of Pennsylvania-based Bethlehem Steel.

WASHINGTON -- Big U.S. steelmakers, with Bethlehem Steel Corp. taking the point position, alleged yesterday that steel producers in Japan, Russia and Brazil have been illegally "dumping" commodity steel on the U.S. market and called on the government to clap quotas or punitive tariffs on the low-priced imports.The dumped steel has resulted in cutbacks in shifts and overtime at Bethlehem Steel's Sparrows Point plant, and could result in lost jobs if the flood continues, company management and union local officials said yesterday.

LOW-PRICED steel from Japan, Russia and Brazil is undercutting domestic producers and forcing them to cut prices. American steel companies have filed complaints accusing the countries of "dumping" -- selling the steel at less than the cost of making it. The House wants the Clinton administration to ban steel imports from 10 countries for a year. Bethlehem Steel says the flood of imports may cause layoffs at its Sparrows Point Division.But what does cheap steel mean to the manufacturers who use it?

Who wants to be a bailout recipient? We do! say the steel companies. Not content with what is likely to be the biggest public works program in decades, Big Steel wants to ensure taxpayers buy bridge, road, school and electric-grid steel only or largely from U.S. producers. Every provision in Congress' forthcoming stimulus should contain "a buy America clause," Nucor CEO Daniel R. DiMicco told The New York Times. What a good idea. The Buy America Act of 1933, signed by Herbert Hoover as he exited his miserable presidency, fueled a global trade war that hurt American exports and made the Great Depression even greater.

Five years ago, there would have been few takers for the steel plants in Sparrows Point and Weirton, W.Va. Bethlehem Steel Corp., which owned Sparrows Point at the time and was once the largest steelmaker in the world, was in its death throes, joining the list of Rust Belt companies that buckled under the weight of high costs and fierce competition. But if either plant goes up for sale early next year, there could be multiple bids for each. And there's a good chance the buyer won't be American.

Executives from the nation's largest steel manufacturers, including Sparrows Point owner Mittal Steel Co. NV, will face off with automakers today over tariffs on foreign-made corrosion-resistant steel. DaimlerChrysler, Ford, General Motors, Honda, Nissan and Toyota want the U.S. International Trade Commission to drop the duties on imports from Australia, Canada, France, Germany, Japan and South Korea, a request fiercely resisted by steelmakers. Both sides will present their case to the commission in Washington today.

Shares of International Steel Group Inc., the new owner of the Sparrows Point steel complex, shot up 26 percent in their trading debut on Wall Street yesterday following the first initial public offering by a major integrated steelmaker in nearly a decade. ISG, assembled from the wreckage of bankrupt steel companies including Bethlehem Steel Corp., sold 16.5 million shares at $28 a share late Thursday, raising $462 million. The stock opened at $33.50 yesterday on the New York Stock Exchange and then traded mostly higher to close at $35.20, or $7.20 above the IPO price.

A bill introduced yesterday in the House of Representatives to provide health care under certain circumstances to retired steelworkers received a less than enthusiastic welcome from union officials and other steel allies. The legislation by Rep. Phil English, a Pennsylvania Republican, would provide health care benefits for the retirees of steel companies in the event that a firm was acquired by another domestic steelmaker, or if production capacity were reduced at the acquiring company's operations, or if a U.S. steelmaker closes.

A LITTLE MORE than a century ago, the big new plant at Sparrows Point went to work turning out the rails for a road of steel from Europe all the way to the Pacific Ocean, across 4,000 miles of Siberian taiga to the port of Vladivostok. American steel was entering its heyday, and the Russian Empire was only too glad to bypass European producers and go shopping in Baltimore. More than 100 years later, where are we? This country has the greatest and most potent economy in the world, but a steel industry so enfeebled and decrepit that it begs for protection -- from the Russians, among others.

CHARLOTTE, N.C. -- Nucor Corp., the most profitable U.S. steel maker, offered yesterday to acquire most of the assets of money-losing rival Birmingham Steel Corp. for $500 million in the latest attempt to consolidate the industry. "We had been in discussions with Birmingham for a couple of years," Nucor Vice President Joseph Rutkowski said in a conference call with investors. "We didn't get anywhere. We felt it was compliant to let shareholders know we are willing to execute a deal that is in their best interest."

CONSOLIDATION of big steel companies may be inevitable for their survival. It may also be in the national interest to encourage the merger of several money-losing companies, such as Bethlehem Steel, and promote greater efficiencies in this basic industry. But it is exceptionally bad policy for the federal government to assume the costs of the retiree health benefits of these firms to aid that consolidation. It would create a dangerous precedent and ongoing obligation for taxpayers while rewarding improvident decisions of bad management.

Bethlehem Steel Corp.'s bankruptcy filing will temporarily lock out the hungry creditors knocking at the steel maker's doors. But now that it has a moment of respite, the one-time giant of American industry must figure out how to emerge from its tenuous position before a tanking U.S. economy, overseas competition and huge labor costs bring the walls crashing down. Analysts and other experts say it's a daunting challenge. The new chairman and chief executive that Bethlehem's board hired just four weeks ago - in part to help the company avoid Chapter 11 - is banking on a strategy of union concessions and mergers.

In a critical move to help continue daily operations, Bethlehem Steel Corp. said yesterday that it closed a deal for $450 million in financing just two days after filing for Chapter 11 bankruptcy protection. GE Capital's Commercial Financing group is providing debtor-in-possession financing for the 97-year-old steel maker, which has been hit hard by foreign competition and the ailing economy. Bethlehem Steel will use the financing for general operating expenses, a company spokeswoman said.