Moreover, the bankruptcy raises doubts about the benefits enjoyed by the steel company's 74,000 pensioners and 130,000 health-care plan participants, consisting of current workers, retirees, spouses and dependents.
The steel company, which said it intended to stay in business and to reorganize, has 13,000 workers at four plants, two rolling mills, and its executive office, which is the only operation remaining in Bethlehem, its hometown.
The company said yesterday that it was too early to know the fate of its employees, including managers. But it is clear to both company and union officials that their existing contract, which expires in 2004, needs to be renegotiated.
The union and the company announced yesterday that talks would begin next week, with negotiations likely to cover work rules, wages and the company's benefits obligations to current and former employees.
Bethlehem Steel said it wanted to cut its legacy costs, mainly pensions and health insurance for retired and current employees.
The company's current pension obligation is $6.4 billion, but it now has just $4.55 billion in the pension fund. In addition, the company said its health-care obligation would reach an estimated $3 billion over 10 years.
Bethlehem Steel said it could not afford these obligations. The company has a Nov. 5 court hearing in New York to discuss the bankruptcy case.
The stock market's slump over the last 11 months has hit the pension fund hard: It had assets of $6.0 billion as of Nov. 30; since then, it has lost 24 percent.
Steel companies and the United Steelworkers of America have called for government assistance - with direct aid to Bethlehem Steel and other steel companies to help pay for legacy costs and with obstacles to stop imports of steel priced below market value.
