Steelmaker Turns to Retirees for Ideas

August 23, 2002 ( - Bethlehem Steel is turning to its retirees for some advice on how to best manage its pension and healthcare costs, according to reports.

In papers filed with a US Bankruptcy Court as part of its ongoing bankruptcy case, the company said it wants to form a new six-member panel to represent its 75,000 retirees plus 20,000 spouses and dependents, the Buffalo News reported. The parties are scheduled to discuss the idea with a judge September 12.
Bethlehem has said repeatedly that it must reduce its pension, health care benefits and life insurance obligation to retirees – estimated at close to $2.4 billion – to survive.

Union Representation 

According to the News story, Bethlehem wants the retirees’ committee to include one retiree each from the unions representing steelworkers, miners, shipyard workers and railroad workers at Bethlehem. Each union would select its own representative.

The other two members would be salaried employees chosen by the company: one covered by a health plan for employees who retired before April 1, 1984, and the other for employees who retired after that date and are covered by the Comprehensive Medical Program.

Salaried workers and their spouses account for about 28% of all the retirees and spouses who receive benefits from Bethlehem, according to court documents filed by the company.

A group representing Bethlehem salaried retirees, the Retired Employees’ Benefit Coalition, likes the worker/retiree committee idea, but argues that the committee proposed by Bethlehem would shortchange former salaried employees, the Buffalo News story reported.

In its heyday, Bethlehem Steel employed 20,000 people in Western New York, but its local employment and production dropped sharply two decades ago when the company announced the end of basic steelmaking operations in the Buffalo area.