BETHLEHEM, Pa., October 30, 1996 -- Bethlehem Steel Corporation announced today that its Board of Directors has approved a Comprehensive Restructuring Plan to improve financial performance and stockholder value. Bethlehem said its plan is to sell Bethlehem Structural Products Corporation's Structural Mill, BethForge, Inc., CENTEC Roll Corporation, and BethShip, Inc.'s Sparrows Point Yard. In addition, although the Coke Division at Bethlehem, Pennsylvania, will continue to operate as a part of Bethlehem, it will be written off as an impaired asset in accordance with generally accepted accounting principles. As a result of this Plan, Bethlehem said it will recognize an after-tax restructuring charge of about $375 million in the fourth quarter of 1996.
In making this announcement, Curtis H. Barnette, Bethlehem's chairman and chief executive officer, said:
"This decision was a very difficult one. It's the right decision and is consistent with our Vision, Objectives and Strategy, and was made in the overall best interests of our stockholders, employees and other constituents. We have often stated that all of our businesses must achieve satisfactory performance or we will no longer continue to operate them and will sell them or shut them down, as appropriate. We regret the consequences this may have for many of our dedicated employees, (more than 90 percent of whom are eligible for pension benefits), their families and the communities that are directly affected by these actions.
"These businesses, which comprise less than 10 percent of our total revenues, have continued to be unprofitable, even with our efforts to modernize and improve them. The decisions announced today will enhance our future performance. With this decision now behind us, we will intensify our efforts to improve the competitiveness of our core steel operations at our Burns Harbor and Sparrows Point Divisions and at Pennsylvania Steel Technologies, Inc."
In commenting about the future, Mr. Barnette said, "We believe that Bethlehem has the proper Vision, Objectives and Strategy in place to achieve our overall objective of increasing value for our stockholders.
"Our Vision is clear -- to be the premier steel company. Our Objectives are well defined -- to increase stockholder value, to serve our customers, to have partnerships among our employees, and to be a good citizen. Our Strategy to achieve our Vision and Objectives is straightforward -- to concentrate on steel, to rebuild our financial strength, and to emphasize and reward continuous improvement in all our activities."
Mr. Barnette also said that the implementation of the Plan would include four principal areas of focus and responsibility.
"First, these Divisions will be operated for a period of time while efforts to sell them are being made. Gregory F. (Skip) Paolini, President, will be responsible for the operation of BSPC-Structural, BethForge and CENTEC. David Watson, President, will be responsible for the operation of BethShip. We will coordinate closely with our customers, suppliers and others and we will complete all orders that we accept.
"Second, Bethlehem will begin an immediate effort to sell these businesses. This effort will be headed by Gary L. Millenbruch, Bethlehem's executive vice president, chief financial officer and treasurer, who will be working with financial advisors, the United Steelworkers' representatives and others in order to sell these businesses to qualified buyers. It's hoped that the businesses will continue to be operated under new ownership. If they cannot be sold in a scheduled period of time, they will be shut down in an orderly manner and efforts to sell the businesses in total or as individual assets will continue.
"Third, employee benefits, training and outplacement will be provided to all affected employees under the responsibility of Dorothy L. Stephenson, Bethlehem's vice president, human resources. Outplacement and training, with the assistance of outside professional services, will be provided to both hourly and salaried employees.
"Fourth, the development of Bethlehem Steel's properties on the south side of Bethlehem, Pennsylvania, will continue. Stephen G. Donches, Bethlehem's vice president, public affairs, will continue to lead this effort to advance the prompt revitalization of these properties.
"We acknowledge and appreciate the support we have received from elected officials, economic development organizations, community leaders and the public in general in connection with the business decisions that we have been considering. Mr. Donches will be our principal liaison with these individuals and organizations to advance our joint efforts to assure buyers that the communities in which these businesses are located will provide a sound basis for their continuation."
Bethlehem Structural Products Corporation
Located in Bethlehem, Pennsylvania, Bethlehem Structural Products produces structural steel shapes and piling for the construction market. Its principal operating facilities include a 40-inch blooming mill and a 44-inch combination rolling mill and currently employs about 900. In the fourth quarter of 1995, Bethlehem discontinued its iron and steelmaking operations at Bethlehem Structural Products and upgraded the 44-inch structural rolling mill in an effort to reduce costs and improve performance. This structural mill currently obtains its semi-finished steel requirements from Bethlehem's subsidiary, Pennsylvania Steel Technologies, Inc., and the Sparrows Point Division as well as from outside suppliers.
The Bethlehem Coke Division, which operates two coke oven batteries at this site, will continue to produce coke for Bethlehem's Sparrows Point and Burns Harbor Divisions, and for trade customers. It currently employs about 600.
BethForge, Inc.
BethForge, located in Bethlehem, Pennsylvania, manufactures and fabricates forged steel products for the metalworking, electrical power generating and nuclear industries from steel ingots produced at Pennsylvania Steel Technologies, Inc. It currently employs about 500.
CENTEC Roll Corporation
Also located in Bethlehem, Pennsylvania, CENTEC produces centrifugally cast rolls for the metal working industry and currently employs about 135.
Sparrows Point Yard, BethShip, Inc.
BethShip operates a ship repair yard at Sparrows Point, Maryland, which repairs and services ships and fabricates industrial products. It currently employs about 700.
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