About a year ago, executives at Bethlehem Steel Corp. were in an upbeat mood. After shedding noncompetitive operations and upgrading core steelmaking businesses, the No. 2 U.S. integrated steel producer was basking in the glow of a major financial turnaround. Its 1997 net income of $281 million represented a dramatic reversal from a $308 million loss in '96. Moreover, the firm's improved financial strength was reflected in significant reductions in its debt and pension liabilities. To top it all off, in May 1998 Bethlehem completed a $560 million acquisition of Lukens Inc. -- after a bidding war with Allegheny Teledyne Inc. Absorbing Lukens had increased Bethlehem's capacity in carbon and alloy plate production by 50%, giving the company bragging rights as the top U.S. plate producer. (It combined two Lukens operations with its existing plate mills in Burns Harbor, Ind., to create a new business unit, Bethlehem Lukens Plate.) In mid-1998 the market for plate was strong and, in an interview, Bethlehem Chairman and CEO Curtis H. Barnette remarked: "It's a good time to be No. 1 in the plate business." But good times have a way of evaporating quickly in the steel industry -- in part because worldwide overcapacity can produce sudden shifts in trade patterns. By the end of 1998 the U.S. market was awash in imports -- which reached a record level of 41.5 million net tons for the year. Imports of steel plate soared by 50.5%. By yearend Bethlehem Steel was feeling the import sting. It had reduced production and cut back work schedules as its inventories of finished and semifinished steel mounted. Although the company remained profitable for the full year, a fourth-quarter net loss of $23 million contributed to a 57% drop in net income in 1998. The red ink continued in the first quarter of 1999 as the company reported another $26 million loss. In a meeting with journalists after the annual shareholders meeting in late April, Barnette cited several positive indicators for the balance of this year -- including an improvement in order-entry levels. But he declared: "The steel import crisis is not over. The overall level of imports remains much, much too high." Bethlehem, which joined four other U.S. firms in filing an antidumping lawsuit in February against plate producers in eight countries, is campaigning for long-term revisions to U.S. trade laws including mechanisms to help detect import surges. Last year, Barnette asserts, American steelmakers were blindsided by the acceleration of imports in the second half. "At this time a year ago we didn't know what was going to happen in our marketplace three or four months later. . . . The experience of 1998 and the first quarter of 1999 demonstrates that our trade laws are not effective." One solution, the Bethlehem CEO suggests, might be to adopt something like the steel-import permit systems in place in Canada and Mexico. "It doesn't stop the steel from coming in," he observes, "but you have to register it. So you know well in advance what is happening in your marketplace." On a positive note, in March Bethlehem landed a long-term contract with General Motors Corp. under GM's global sourcing program. And, continuing its modernization strategy, the steelmaker announced plans to invest $60 million to convert one of the caster strands at its Sparrows Point, Md., complex into a 104-in.-wide slab caster to increase both capacity and the efficiency of its plate operations. It also is constructing a $300 million continuous cold-rolling mill complex at Sparrows Point that is scheduled to begin production in the early part of 2000. Bethlehem, which is concentrating on its core carbon and alloy steel businesses, has sold -- or has agreements to sell -- all of the stainless operations acquired in the acquisition of Lukens Steel.