Burns Harbor

Developing a Clear Vision for the Future
by Joseph F. Emig
Division President

Bethlehem Steel's corporate vision is clear - Be the Premier Steel Company.

During 1995, the Burns Harbor Division developed a similarly clear vision - Be the World's Best Steel Business. This vision sets the direction for the division while totally supporting the corporate vision. Indeed, if Bethlehem is to be the premier steel company, the Burns Harbor Division, its flagship operation, must be the world's best steel business.

Along with a clear vision, the Division also has developed four objectives that map the route for attaining its vision while at the same time allowing the division to chart the progress it is making. Those four objectives are:

1. For customers, be the Supplier of Choice;
2. For employees, be the Employer of Choice;
3. For neighbors, be the Resident Business of Choice;
4. For the financial community, be the Investment of Choice.

Here's a look at some of our successes in achieving those objectives during the past year.

Supplier of Choice

During 1995, the Burns Harbor Division was selected as the sole supplier of sheet steel for the Spring Hill, Tenn., plant of Saturn Corporation, the subsidiary of General Motors that is known for its innovative approach to car manufacturing and marketing. The Division will furnish the Spring Hill operation with cold-rolled sheet and hot-dip galvanized sheet made at Burns Harbor and electro-galvanized sheet made at Walbridge Coatings.

In addition, during 1995 Burns Harbor furnished more than 250,000 tons of coated sheet to Chrysler Corporation, a firm for which the Division was not a supplier as recently as 1992.

Also, by re-focusing on quality, prompt delivery and being responsive to Ford Motor Company's needs, the Division was able to get back on track with Ford by improving our performance.

The Burns Harbor Division furnishes electro-galvanized sheet for the body side outer panels for the Ford Taurus/Mercury Sable. These panels extend from the front door to the tail light on both sides of the vehicle, and represent one of the largest single stampings made from Burns Harbor product.

Finally, during 1995 Burns Harbor earned QS-9000 certification. QS-9000 defines the fundamental quality system expectations of Chrysler, Ford, General Motors and major truck manufacturers for suppliers of parts and materials.

Employer of Choice

Topping the list of criteria that must be satisfied to make Burns Harbor the employer of choice is safety performance. In that regard, Division employees turned in their best performance in history during 1995, setting low incident rates for both lost workday and clinic cases.

Driving this improvement was a new safety effort introduced in late summer. Named ESP, for Employee Safety Process, the effort is aimed at creating a new safety culture at the Division. ESP is a process, not a program, that is driven by employees, not supervisors, and is pro-active rather than re-active.

Developed by a cross-section of hourly and salaried employees, ESP strives to get all employees involved in taking steps to prevent accidents from happening. The process's ultimate goal is to reduce injuries to zero, assuring that employees return home at the end of their shifts just as healthy as they were when they arrived.

Enhancing employee skills also is an important factor in being the employer of choice. During 1995, Burns Harbor Division employees completed more than a quarter million-hours of training. This full spectrum of training included craft training, environmental awareness training, operating skills training, computer classes, a financial management program, classes in statistical process control and courses in interpersonal skills. In addition, hundreds of Division employees participated in a variety of off-the-job career development training programs provided through an agreement between Bethlehem Steel and the United Steelworkers of America.

Resident Business of Choice

To be recognized as a good neighbor, the Burns Harbor Division first must meet or exceed environmental regulations and community standards. In that regard, the Division recorded a long list of achievements in 1995.

Earlier this decade, Bethlehem Steel Corporation agreed to actively participate in the Environmental Protection Agency's 33/50 program, a voluntary pollution prevention initiative that targets 17 toxic chemicals for reduction. Although the goal of the program was to reduce emission of the targeted chemicals by 50 percent by the end of 1995, the Burns Harbor Division reduced its releases by more than 90 percent, contributing greatly to the corporation's success in this program.

During 1995, a solid waste management system constructed to allow Burns Harbor to recycle materials collected in its pollution control systems gradually neared full operation. When operating at capacity, this system will be capable of recycling 200,000 tons of iron- and carbon-bearing materials that otherwise would have to be placed in a landfill.

Also during the year, the Division became a charter member of the Indiana Department of Environ-mental Management's "Partners for Clean Air Program," an effort in which industry and government work together to voluntarily improve ozone air quality.

The Burns Harbor Division also provides leadership and resources to improve the quality of life in nearby communities.

For example, during 1995, the Burns Harbor Division and its employees contributed more than $1 million in support of United Way agencies in Northwest Indiana. And, for the 21st consecutive year, the Division participated in an Educational Cooperation Program with nearby elementary schools. This

program reaches every fifth-grade student in three neighboring school districts.

Also, because Bethlehem believes that a community's highest priority is the education of its citizens, the Burns Harbor Division during 1995 lent its support to plans to expand a public library and construct a new high school in the nearby community of Chesterton. The Division believes these two projects are investments in the future and that supporting them is evidence of the Division's commitment to be full partners with the community for mutual success and continued economic viability.

Investment of Choice

Although investors cannot, of course, purchase shares of the Burns Harbor Division, the Division's performance has a profound impact on Bethlehem Steel's ability to increase stockholder value. One way in which Burns Harbor can help increase stockholder value is by focusing on high-value products to maximize return on investment. Although total shipments of sheet and plate over the course of 1995 were about 400,000 tons less than during the record-breaking year of 1994, shipments of high-value coated sheet products the past year were the highest in plant history.

To maintain Burns Harbor's ranking as the most productive integrated steelmaking plant in the United States, Bethlehem continues to invest large amounts of capital at the Division. All told, more than $100 million was invested at Burns Harbor during 1995, with the largest sums going toward modernizing the 160-inch plate mill and hot strip mill. Work on these projects is continuing. And in the steelmaking department, work progressed on a project which will enable each of the three basic oxygen furnace vessels to increase their output by about five percent, making more steel available to be rolled into finished product.

With its vision and strategies clearly in place, Burns Harbor is looking forward to making continual progress in the years ahead in being the steel business of choice - for customers, employees, neighboring communities and the financial community.