Bethlehem Steel, Nation's No. 3 Steelmaker, Files for Chapter 11 Bankruptcy

By Bill Bergstrom The Associated Press Published: Oct 15, 2001

PHILADELPHIA (AP) - Bethlehem Steel Corp., which launched more than 1,000 ships during World War II and made girders for the Golden Gate Bridge and Empire State Building, filed for Chapter 11 bankruptcy Monday. The nation's third-largest steel company was suffering from five straight quarters of losses blamed on competition from low-cost foreign steel and high labor and retiree-benefit costs.

"It is becoming increasingly clear that the economy is in a precipitous decline, and the market for steel has just gone on hold," said Robert S. Miller Jr., chief executive.

The company, headquartered in Bethlehem, 50 miles from Philadelphia, was once a symbol of American industrial and military might. But it is now a shell of what it once was, with about 13,000 employees and 74,000 pensioners.

Chapter 11 enables a company to hold off its creditors and continue operating while it tries to work out its problems.

Miller said the company hopes to reduce debt, work with its unions to address money owed to retirees, and find buyers or merger partners. Bethlehem has lined up $450 million in financing in the meantime.

"I believe that consolidation of the American steel industry is absolutely required. There are far too many players, and they are all small and weak compared to their global competition," Miller said.

Bethlehem Steel Corp. was founded in 1904 by Charles M. Schwab, one of Andrew Carnegie's top lieutenants. By the 1920s, it employed 60,000 and could turn out 8.5 million tons of steel a year. Its Fore River shipyard in Quincy, Mass., launched America's first aircraft carrier, the USS Lexington, in 1925.

The company made steel for the Golden Gate Bridge, George Washington Bridge, Empire State Building, Rockefeller Center and the Waldorf-Astoria.

During World War II, Bethlehem Steel churned out steel for ships, tanks, guns, shells and airplane engines. It employed nearly 300,000 people during the war, and operated 15 shipyards that launched 1,121 ships. More recently, the company supplied armor plate for the repair of the bomb-damaged destroyer USS Cole.

At its peak, the massive plant dominating Bethlehem employed 30,000. Now shuttered and rusting, its stacks serve only as a historical feature of a planned Bethlehem Works hotel and entertainment development.

On Monday, the steelmaker reported a quarterly loss of $152 million, or $1.25 a share. Bethlehem has lost $1.4 billion for the first nine months of the year.

The bankruptcy filing came just weeks after the company replaced its chairman and chief executive with Miller, a turnaround specialist who led negotiations leading to the government bailout of Chrysler Corp. in the 1980s.

Miller said the company could not overcome the damage done by low-cost imports and the slowing economy. Demand for consumer products relying on steel, such as autos and appliances, dropped even further after the Sept. 11 terrorist attacks, he said.

Miller said the company will continue to press for government action to limit low-priced steel imports.

Leo Gerard, president of the United Steelworkers of America in Pittsburgh, said Congress should assist the industry and curb imports, "if they want a steel industry in this country."

Bethlehem Steel has laid off union and salaried employees and sold off some of its assets in an attempt to stay out of bankruptcy. Miller said the company was talking with the union and planning further job cuts by January, but did not disclose how many jobs would be cut or where.

Bethlehem now produces galvanized products and sheet metal for the auto industry and other customers at its Burns Harbor division near Chicago and operates plants in Sparrows Point, Md., and in Steelton, Pa.

Bethlehem stock was at $1.20 a share, unchanged, in midday trading on the New York Stock Exchange.

---

On the Net:

http://www.bethsteel.com

AP-ES-10-15-01 2028EDT

-- Anonymous, October 15, 2001

Answers

Darn, there were alot of layoff news earlier and now it's gone. I was just too late.

-- Anonymous, October 15, 2001

Although I'm anti-protection in general, I think there are cases where we need to have it. We can't let our industrial base erode too much.

-- Anonymous, October 16, 2001

Reuters Plans to Cut 500 More Jobs The Associated Press Tuesday, Oct. 16, 2001; 3:50 p.m. EDT

LONDON –– Reuters Group PLC said Tuesday it would shed an additional 500 jobs, or about 3 percent of its work force, as it accelerated its cost savings effort in the wake of the global economic slowdown and terrorist attacks.

The job cuts – on top of 1,100 announced in July – were announced as Reuters reported its third-quarter revenue rose 4 percent to 920 million pounds ($1.35 billion) from 888 million pounds a year ago.

The company did not report its earnings for the July-September quarter.

Despite the increase for the latest quarter, Reuters said revenue from some of its businesses are expected to grow slower than expected for the second half due to the economic slowdown and the Sept. 11 terror attacks in the United States.

Underlying subscription-based revenue in Reuters Financial, for example, is now expected to grow between 1 percent and 2 percent in the second half, compared to a July forecast of 3 percent growth.

The worsening conditions led directly to the job cuts, an acceleration of a cost-saving program unveiled in July, it said. The cuts, which represent 3 percent of 17,265 people employed at the end of last year, will be made globally and across the spectrum of Reuters' subsidiaries, the company said.

"We are taking the tough decisions needed to improve our operation margins in the near term and position ourselves for stronger growth when the market recovers," Reuters chief executive Tom Glocer said in a statement.

Underlying revenue, which excludes the impact of acquisition, disposals and currency movements, increased 1 percent in the third quarter.

Total revenue in the Reuters Financial division increased 6 percent to 674 million pounds ($991 million). That includes growth of 5 percent in Reuters Information and 9 percent in Reuters Trading Solutions.

Revenue in Reuters' electronic brokerage business Instinet fell 1 percent to 187 million pounds ($275 million) in the third quarter compared to the same period last year. Underlying revenue was down 5 percent.

An estimated 12 million pounds ($17 million) of potential revenue for Instinet was lost when U.S. stock markets were closed for four days following the Sept. 11 attacks.

In trading in London, Reuters shares fell 7.1 percent.

© Copyright 2001 The Associated Press

-- Anonymous, October 17, 2001

I agree with you Peter. It might be in the US interest to help some industries, rather then lose them and have to depend on other countries for our supplies.

-- Anonymous, October 17, 2001

10/17 01:02 Merrill Lynch May Cut 10,000 Jobs, Wall Street Journal Says By William Selway

New York, Oct. 17 (Bloomberg) -- Merrill Lynch & Co., the largest brokerage, may eliminate as many as 10,000 jobs, or 15 percent of its workforce, and take a fourth-quarter charge of more than $1 billion, the Wall Street Journal reported in its ``Heard on the Street'' column.

Senior executives are examining Merrill's businesses to determine if Merrill should continue brokerage operations in such countries as Japan, Canada, Australia and India, or reduce the size of its operations there, the paper reported, citing unidentified senior people at the company.

The examination is in the early stages and it isn't clear which of Merrill's businesses will be most affected or when any final decisions will be made, the Wall Street Journal reported.

U.S. securities firms including Credit Suisse First Boston and Charles Schwab Corp. have been cutting jobs as declines in investment banking and stock trading sap profits. Before the Sept. 11 terrorist attacks, securities firms were in their most prolonged slump since 1995.

Merrill's third-quarter profit may fall by as much as two- thirds because of the slump in the stock market that was brought on by the attacks. Analysts scaled back their estimates for the brokerage's profit after Merrill's rivals reported that earnings fell as much as 43 percent in the three months ended Aug. 31.

Merrill executives are looking at ways to save a total of $1.4 billion to $1.7 billion at the company's institutional securities, asset management, international brokerage and U.S. brokerage units, the paper reported. Chairman and Chief Executive Officer David Komansky, in a meeting with brokers, recently suggested that Merrill may eliminate jobs, the Wall Street Journal said.

(WSJ 10-16)

-- Anonymous, October 17, 2001

I would prefer to see the upper management taking pay cuts before firing people. As the jobless number rises, the more bin laden and his followers are rejoicing.

-- Anonymous, October 17, 2001