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Crisis In Bethlehem

Crisis In Bethlehem

Copyright Date: 1986
Pages: 248
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  • Book Info
    Crisis In Bethlehem
    Book Description:

    Pulitzer Prize winner John Strohmeyer's account of the collapse of Bethlehem Steel. As editor of the Bethlehem, Pennsylvania,Globe-Timesfrom 1956 to 1984, Strohmeyer followed the steel industry from the height of its power through its decline. He evaluates the self-indulgence of both the unions and industry management and movingly describes the human agony caused by the failure of steel. His account is reinforced by over one hundred interviews with steelworkers, union leaders, steel executives, and industry analysts. First issued in 1986, the book is more significant than ever. In this edition, Strohmeyer includes an update on steel today.

    eISBN: 978-0-8229-7971-5
    Subjects: History, Business
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Table of Contents

Export Selected Citations
  1. Front Matter (pp. i-iv)
  2. Table of Contents (pp. v-vi)
  3. Acknowledgments (pp. vii-viii)
  4. Preface (pp. ix-xii)
    John Strohmeyer
  5. Preface to First Edition (pp. xiii-xx)
  6. Chapter 1 A VIOLENT BEGINNING (pp. 17-26)

    Just how basic a basic industry is was brought home to me one May morning in 1929. I was five years old and neighbors had a few moments before cut down my father’s body from a limb of a cherry tree in the backyard of our home in Kingston, Pennsylvania. A Lithuanian immigrant, my father had brought his family to this northeastern Pennsylvania coal region town where he could work the mines.

    But the mines fell a victim to the Depression, and, at age thirty-nine, my father fell along with them, defeated in spirit and weakened in body by the...

  7. Chapter 2 THE COMFORTS OF INSULARITY (pp. 27-35)

    A good way to begin understanding the distress of the steel industry is to visit the Moravian Church’s ancient Nisky Hill Cemetery in Bethlehem. Here, on a bluff overlooking the enormous Bethlehem Steel plant beside the Lehigh River, are buried many of the leaders of the corporation. You can often guess the rank of the interred by the size of the gravestone.

    Dominating over all his colleagues in death, as he did in life, is Eugene G. Grace, who with founder Charles Schwab built Bethlehem Steel into the nation’s No.2 steel producer. A huge open rotunda marks Grace’s grave. A...

  8. Chapter 3 A TEST OF MANHOOD (pp. 36-45)

    At a time when steel industry tycoons were dominating the compensation rankings in U.S. industry and business, the American blue-collar steelworkers were pushing out record tons of steel—and bitching over the inequities. The contrast between the high life in corporate offices and the often intolerable working conditions in the bowels of the plants during the post–World War II years has left a deeply rooted source of hostility among the rank and file. Those fissures complicate the steel industry’s problems even today.

    In spite of all the advances in technology and safety, the rigors of steelmaking still feed the...

  9. Chapter 4 BETHLEHEM STEEL AT HOME (pp. 46-52)

    While the workers at Bethlehem Steel endure many hardships on the job, they have one advantage over the executive staff that was not negotiated in any contract. They have no requirement, in their social lives, to demonstrate their compatibility with the corporation.

    When the 7-to-3 shift heads for the gates on a Friday afternoon, workers have the option of heading for the bowling alley, home, the bar, or wherever their impulses take them. At just about the same time, the high-salaried official in Bethlehem’s main offices is checking his calendar to see which dinner party he and his wife must...

  10. Chapter 5 DIFFICULT YEARS FOR MEN OF VISION (pp. 53-63)

    It is June 6, 1984. I am driving in the countryside six miles out of Appomattox, Virginia, and I think I am lost. The narrow tarmac road dips and winds through green, roller-coaster hills and there is no life in sight except grazing black angus. Suddenly, I see the mailbox I am looking for and I turn into a bumpy dirt lane.

    Chickens scatter from the road as I pull up to a farmhouse where I see a man wearing overalls and soil-stained shoes coming out the door.

    “I’m looking for the Robert Gray plantation. Am I close?” I ask....

  11. Chapter 6 THE YEARS OF SELF-DESTRUCTION (pp. 64-77)

    The summer of 1959 started in Bethlehem with a searing heat wave, so hot that a reporter at theGlobe-Timesfried an egg on the sidewalk. People were also talking about the discovery of a mysterious, systematic siphoning of gasoline from the pumps at the city garage. And it was the summer of a contract reopening at Bethlehem Steel.

    Of the three news items, the expiration of the three-year, basic agreement in the steel industry was of least interest to the town. Though nationally newsworthy, contract renegotiations had become an almost predictable ritual in steel communities. The steelworkers had struck...

  12. Chapter 7 STEEL AND THE PRESIDENTS, AGAIN (pp. 78-87)

    At 7 a.m. on April 10, 1962, the phone rang inside the Saucon Valley home of Edmund F. Martin, president of Bethlehem Steel. Chairman Arthur B. Homer was calling. Homer had a head cold and preferred not to preside at the corporation’s annual meeting scheduled to start at 11 a.m. that day at the DuPont Hotel in Wilmington, Delaware. Would Martin mind subbing for him?

    Martin, a square-faced man in his late fifties, could not refuse, but he had immediate reservations. This was not an emergency call to the plant where this veteran steelmaker had always been comfortable. This was...


    Unfortunately, the author of theFortunepiece quoted above was so impressed with the industrial achievements of Bethlehem Steel (“a well-integrated company with plants that have a steel capacity equal to the production of the United Kingdom”) that he did not document his observations about social shortcomings. Only when the Civil Rights Act of 1964 forced all major American industries to look at their social deficiencies did the public get an understanding of Bethlehem’s failure in this regard.

    The Bethlehem Steel I knew in 1964 was lily white in attitude. While only about one thousand blacks lived in Bethlehem, a...

  14. Chapter 9 OMINOUS SIGNALS AND NO QUICK FIX (pp. 98-107)

    In the summer of 1974, when President Gerald Ford was in the White House trying to soften the shock of Richard Nixon’s sudden abdication, the steel industry appeared safe and well. The big mills were in the midst of a record profit-making year and employment was at its fullest. The only disconcerting vibrations felt in Bethlehem were the in-house murmurings heard in August when Bethlehem Steel picked Lewis W. Foy as its sixth chairman.

    Succeeding Stewart S. Cort, a Yale-educated marketing expert, as the chief executive of Bethlehem Steel was a heady rise for Foy, fifty-nine, a silver-haired, low-key manager...

  15. Chapter 10 THE SINKING OF THE FLAGSHIP (pp. 108-119)

    By the early 1970s, some executives were beginning to think the unthinkable in the board of directors room at Bethlehem Steel. Until now, it had been assumed that the company would always continue operating its key plants, upgrading them as necessary, but never actually shutting down a big facility. However, accelerating negative forces were changing such comfortable assumptions.

    Yet, no outsider could have guessed that the first Bethlehem operation proposed for elimination, in early 1975, would be Fabricated Steel Construction. How could the company, in its pursuit of wage concessions, even suggest closing down the technically sophisticated fabricating shops, or...

  16. Chapter 11 BETHLEHEM’S BLACK FRIDAY (pp. 120-130)

    It had already been a tough winter for Lackawanna, the Bethlehem Steel plant town just south of Buffalo on the shores of Lake Erie. Nearly fourteen feet of snow had fallen during the first three weeks of January 1977. Then, on Friday, January 28—a day that started cold but clear—a new storm, with blinding snow driven by winds of up to seventy miles an hour, swept in across the lake.

    The blizzard lashed Lackawanna unmercifully for the next three days, bringing zero temperatures and burying the area under as much as twelve feet of fresh snow. Hundreds of...

  17. Chapter 12 A DIFFERENT STYLE AT THE TOP (pp. 131-139)

    Donald H. Trautlein, an amiable, stocky, tennis-playing accountant, may be the most unlikely person ever to have head a major steel company. In 1980, when he succeeded Lewis W. Foy as chairman and chief executive officer of Bethlehem Steel, the incongruity of his appointment was widely noted.

    Trautlein, leaving a successful career with Price Waterhouse, was the first outsider to reach Bethlehem’s top echelon without being groomed in the steel company’s elaborate internal management training system. He had neither made steel, sold steel, nor even lived in a steelmaking environment for any length of time, as had all six chief...

  18. Chapter 13 TAKING THE LUMPS AT BETHLEHEM (pp. 140-149)

    During every quarter, the directors of Bethlehem Steel walk down a gallery lined with pictures of their predecessors and convene to consider the health of the company and to distribute the quarterly dividend.

    They meet in an imposing boardroom on the twenty-first floor of Martin Tower, taking their places in green leather chairs around a long oval table with squared ends. The two long-departed leaders, Charles Schwab and Eugene Grace, oversee the proceedings from their portraits, the only ones on the boardroom walls.

    The board of this major American corporation represents power and exudes confidence. Once an exclusive club composed...

  19. Chapter 14 DISMISSAL TRAUMA (pp. 150-159)

    No one could foretell the extent of the trauma as Chairman Donald Trautlein began to force thousands of workers out of their jobs in the downsizing of once-mighty Bethlehem Steel. Certainly not Jim Ross, an obscure worker in the company’s human relations department, when he was called in by his boss, William Reusch, and told he was being assigned to a temporary project that shouldn’t last too long.

    Ross’s assignment was to set up the first “outplacement office” for Bethlehem Steel. The word “outplacement” wasn’t even in the dictionary at that time, but Ross, a management trainee who became an...

  20. Chapter 15 HARD ROAD TO CONCESSIONARY BARGAINING (pp. 160-173)

    Lloyd McBride, a balding former union muscle man, had a square frame, arms the thickness of small tree trunks, and the eyes of a fierce competitor. At age sixty-one, he rose to the top of the United Steelworkers Union the hard way, beating Ed Sadlowski, a militant, street-smart challenger with a big Chicago constituency, in a bitter election for the international presidency in 1977. Then McBride embraced the Sadlowski dissidents and stood with them in a solid front when the slumping steel industry began to beg for contract concessions.

    Because of this militancy, it was hard to believe McBride’s words...

  21. Chapter 16 IN THE SUPER BOWL OF TRADE LITIGATION (pp. 174-184)

    A seventy-five-foot steel beam with a painted message proclaiming “Stop Illegal Steel Imports’” sits on the parking lot at Van A. Bittner Hall, home of the union locals in Bethlehem. It is left over from a community rally in 1984 when labor and management at Bethlehem Steel joined together and launched a drive to persuade the government to curb imported steel.

    There is really no reason to move the beam. The once-busy parking lot is nearly empty these days because so few steelworkers are working.

    Many people in this country feel that burdening the nation with the consequences of import...

  22. Chapter 17 AFTER THE PLANT SHUTS DOWN (pp. 185-193)

    It was early November 1984, but I could already reel the chill of winter in the breeze off Lake Erie as I walked into the 8 a.m. mass at the Queen of All Saints Church in Lackawanna. The church, which fronts on Ridge Road and extends to a slag heap in the rear, serves the First Ward neighborhood that grew up next to the once-bustling Bethlehem mill.

    Only two elderly people were in church that Thursday morning. With the resigned frustration of an inner-city clergyman, the Reverend Ronald Lord, a pleasant, middle-aged priest, bowed and blessed the congregation as though...

  23. Chapter 18 THE MEANEST AND THE BEST (pp. 194-204)

    The staff of the United Steelworkers Union in Johnstown operates from a suite of rooms in the Wallace Building on Main Street. The restored structure, which has a Merrill Lynch brokerage office on the ground floor, is in the heart of downtown, a central business district so handsomely refurbished that a visitor does not have the feeling of being in a mill town. But that mood changes at the fourth-floor office of Jerry Groves, usw staff representative.

    Groves is a bull of a man with squinty eyes and a cynical smile—the features one might expect of a union organizer...

  24. Chapter 19 WHEN THE WORKERS BUY THE COMPANY (pp. 205-215)

    The steel town of Weirton. West Virginia, is an easy forty-five-minute drive from Pittsburgh, long the capital of steelmaking in the United States. In terms of sophistication, the gap is considerably wider. Culture-minded and diverse, Pittsburgh enjoys Three River Arts Festivals and a world-class civic symphony at Heinz Hall. Dominated by a single smokestack industry, Weirton is a workingman’s community where mourning families still hang funeral wreaths on the front door and the American Legion is a big civic force. Yet Weirton overshadows Pittsburgh in one important way.

    While the steel mills along the rivers forming Pittsburgh’s triangle have been...

  25. Chapter 20 PINNING THE BLAME (pp. 216-223)

    A common perception is that big steel is in trouble because it is under siege from world forces it can no longer control. That is only partially true. I am convinced that the biggest cause for the industry’s distress is the internal strife that saps its strength from within. Accordingly, the greatest hope for its recovery rests not on what is happening on the outside but on whether steel management and labor can recognize—and recognize soon—that they have to stop killing each other.

    Perhaps no industry has had such a sustained history of hostile labor relations. For more...

  26. Chapter 21 CAN IT BE SAVED? (pp. 224-236)

    For the people of Bethlehem, it is no longer possible to ignore the fact that they may lose their steel plant. The once-steady roar from Bethlehem Steel is reduced to a murmur. At least half of the five-mile-long steelmaking complex along the Lehigh River resembles a wasteland.

    On many afternoons, grim-faced people pause on the New Street Bridge and look down the river bank to see what is happening to Bethlehem Steel. Old-timers shake their heads sadly at the sight. Demolition crews have flattened the merchant mills, now leaving only piles of rubble where, since the early 1900s, thousands of...

  27. Index (pp. 237-244)