As has been discussed in previous announcements, Bethlehem Steel is working toward a 'stand-alone plan of reorganization' that would enable it to compete in a cost-effective manner given the new realities of the steel industry. On a separate path, we are examining the potential merits of a business combination with International Steel Group. There are no assurances that such a transaction will be feasible, and therefore we are proceeding with all deliberate effort toward a viable stand-alone plan for Bethlehem. Any proposal from ISG will only be considered if it is deemed superior to the prospects for a stand-alone plan in its impact on creditors, employees, suppliers, customers, and other Bethlehem constituencies.
Critical elements of a successful new stand-alone business model include (a) a comprehensive revision to our management overhead structure, (b) a new, modern, flexible, more cost-effective labor agreement with the USWA, and (c) a resolution through the bankruptcy process of our debt and legacy cost issues.
With respect to our management structure, we are taking the first of several steps toward a substantial change. The long-run objective is to lower our cost of doing business and to shorten lines of communication between administration and operations. Specific steps at this time include downsizing, outsourcing, and decentralizing activities presently conducted at corporate headquarters.
R. S. Miller, Jr.
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