1 Bethlehem Steel Corp. has agreed in principle to form a joint venture with the world's second-largest steelmaker, Usinor-Sacilor of France, to modernize a portion of Bethlehem's ailing BethForge division.
2 The venture, which involves adding sophisticated equipment to make cast-iron mill rolls, is part of a two-pronged effort to shore up a division that has posted continuing operating losses for several years.
3 The other element includes consolidating BethForge's press-forge operations.
4 The entire division employs about 850 workers.
5 While the joint venture affects only a small part of Bethlehem's operations, it is significant because it marks the first time the nation's No. 2 steelmaker has joined forces with a foreign partner.
6 Wall Street analysts have criticized Bethlehem for not following its major competitors in linking with a foreign company to share costs and provide technology to modernize old facilities or build new ones.
7 'We think it's a step in the right direction for Bethlehem,' said Felix Bello, WEFA Group's international steel analyst. 'It's important to share the risk and even more so when the market has already peaked.'
8 He said the move could be the beginning of a broader relationship between the two companies, one that could open up new markets for Bethlehem.
9 Bethlehem had little choice but to go with a European steelmaker, because its competitors already have tapped the Japanese and South Korean industry leaders, analysts noted.
10 Under terms of the agreement, Usinor's Chavanne-Ketin unit and Bethlehem would establish a modernized facility to make cast-iron mill rolls at the company's cast-iron shop here.
11 Terms for the venture, which would be jointly owned by both companies, weren't disclosed.
12 The Usinor unit has agreed to provide technology and expertise to install a so-called spin caster by early next fall.
13 The caster improves the metallurgical quality of the iron mill rolls, which are basically huge rolling pins used to flatten or shape steel products.
14 Bethlehem is also working with the United Steelworkers union to consolidate BethForge's two machine shops and four heat-treatment facilities of the press-forge operations.
15 Once the consolidation is complete, Bethlehem plans to concentrate its forgings business on nuclear fabrication, hardened steel and large-diameter steel rolls for rolling mills and selected custom-die applications.
16 Bethlehem said earlier this year that it planned to restructure the BethForge division to improve its cost structure.
17 In the second quarter, Bethlehem posted a $50 million charge related to its plans to realign the division.

The venture , which involves adding sophisticated equipment to make cast - iron mill rolls , is part of a two - pronged effort to shore up a division that has posted continuing operating losses for several years .
continuing operating losses for several years
Why has that division faced such difficulties?