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ENVIRONMENTAL RULES, HIGH COSTS PROMPT BETHLEHEM SHUTDOWN

Changes in environmental regulations and the economics of steelmaking were behind Bethlehem Steel Corp.'s decision to shut down its 800-employee coke operations in its headquarters city at the end of March.

The decision, announced Monday, means Bethlehem will no longer make anything for the steel industry in its hometown.

The company is closing the money-losing coke division as coke makers struggle with environmental regulations, higher production costs and new steelmaking technology that doesn't require coke, the processed coal used to fuel the blast furnaces that melt iron to make steel.

The shutdown will not have any impact on Bethlehem's coke operations in Lackawanna, which employ about 350 people but are part of the firm's Burns Harbor Division, a company spokeswoman said.

Bethlehem closed its last steelmaking furnace in Bethlehem two years ago, but a skeleton crew continued non-steelmaking operations.

Some employees will be transferred to other units. A majority of those losing their jobs will be entitled to immediate retirement benefits, Bethlehem Steel said.

Ed O'Brien, assistant director of the United Steel Workers local, called the announcement "another slap in the face" to local steelworkers.

"It seems that Bethlehem (Steel) is more interested in the development of its museum there on the South Side of Bethlehem than in the well-being of its employees," he said.

The company and the Smithsonian Institution are working together to develop an industrial history museum on company land. Bethlehem Steel has created a not-for-profit organization to create and operate the museum.

Bethlehem Steel, which also has galvanized products operations in Lackawanna, said it would try to sell the coke division over the next several months, but that no immediate buyers had stepped forward.

When the coke plant shuts down, Bethlehem will be home to just the company's headquarters.

The company has bid $400 million for Lukens Inc., the nation's oldest operating steel firm. But the bid was challenged last week when Allegheny Teledyne Inc. made an unsolicited $465 million bid for Lukens.

On Monday, a Lukens shareholder filed a lawsuit in Wilmington, Del., against Lukens' directors seeking to block the merger with Bethlehem, claiming the directors were not meeting their fiduciary duties to shareholders by seeking the highest possible price for the company. The class action complaint by Wretha Walker claimed that the deal with Bethlehem "was structured to leave Lukens' entrenched management in place . . . and reward them by honoring their 'golden parachutes' in full."

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