For Immediate Release
BETHLEHEM, Pa., December 16, 2002 -- Bethlehem Steel Corporation has been notified by the Pension Benefit Guaranty Corporation ("PBGC") that the agency intends to announce on Wednesday, December 18, the termination of Bethlehem Steel's pension plan, confirmed Robert S. Miller, Bethlehem's chairman and chief executive officer.
"Given the significant underfunding of our pension plan, this action by the PBGC is not unexpected. However, we are very disappointed that the PBGC is taking this action when Bethlehem has clearly not missed any scheduled contributions to the fund or payments from it to eligible recipients. An immediate termination is unfortunate and will adversely affect our ability to restructure our workforce in an orderly manner," he said.
Mr. Miller continued that "this premature termination deals a serious blow to the potential recovery by the creditors of Bethlehem Steel Corp., one of the most important of which is the PBGC. We have made steady progress to either consolidate or emerge from bankruptcy as a stand-alone company, and have been negotiating a new agreement with the United Steelworkers of America to significantly reduce the represented workforce while eliminating salaried jobs.
"Bethlehem is continuing its discussions with International Steel Group (ISG) concerning the potential merger of the two companies. These discussions are consistent with President Bush's vision to promote steel industry consolidation when he courageously implemented tariffs early this year.
"The federal program of safety nets for workers who have been devastated by unfair imports was meant to protect the very workers who will be adversely affected by this early termination of our pension plan. Not only will many now be ineligible for special early pensions, they will also be ineligible to obtain health care insurance tax credits available under the Trade Adjustment Assistance Program, which was part of the Trade Act of 2002.
"We have shared extensive information with the PBGC and, while we knew the termination of our pension plan was inevitable, we had hoped we could proceed with our restructuring in an orderly fashion. We are very surprised at the timing of the PBGC's action as we are not yet in arrears on our funding obligation, as others whose plans have recently been terminated."
"We will continue to work with the PBGC to try and amend the timing of our plan termination in order to complete the restructuring of our company in a manner that will treat our employees and creditors fairly. I anticipate meeting with the PBGC in the very near future to discuss what recourse is available to Bethlehem to halt this premature termination of a plan that is not in violation of any of its funding or payments," Mr. Miller concluded.