Bethlehem Steel

no notes 6/16<div>
</div><div></div><div>
</div><div>http://www.mcall.com/all-bethsteel-printingchapter-8-htmlstory.html</div><div>
</div><div>
</div><div><table border="0" cellpadding="0" cellspacing="0" width="759" style="color: rgb(0, 0, 0); font-family: " times="Times" new="New" roman="Roman"><tbody><tr><td valign="top">Forging America: The History of Bethlehem Steel - Chapter 8
The Bitter EndLorraine ''Cookie'' Burkhardt struggles to look through tears to find her car in the lot outside Martin Tower in Bethlehem.Until now, it had been an exciting month for her. She bought a new car — a shiny 1977 Ford Pinto with a snazzy red pinstripe — moved to a suburban ranch home twice the size of her old house and just returned from taking her two children on their first trip to Disney World.But at this moment, on Friday, Sept. 30, 1977, as Burkhardt scurries across the tree-lined lot with the remnants of her brief career at Bethlehem Steel tucked into a cardboard box, Martin Tower is far from the happiest place on Earth.As she makes her way out of The Steel's headquarters, she is among 2,500 shell-shocked, white-collar Bethlehem Steel workers, including 800 from Martin Tower, who were sent packing from the jobs that helped them live the American dream.A few weeks earlier, while the country mourned the deaths of Elvis Presley and Groucho Marx, 7,000 plant workers were dismissed. But the layoffs at the headquarters were the first time white-collar workers were let go. It was their Black Friday.Seemingly overnight, Bethlehem Steel had gone from industrial titan to struggling dinosaur, and this was the day its workers realized the company they thought was invincible was in serious trouble.''We all went to Danny's, got terribly drunk and cried in our beer, literally,'' Burkhardt says. ''Then we went back to my big new house and cried some more. We never saw it coming.''Burkhardt and many of the employees laid off in 1977 would be called back to work over the next two years, but Black Friday would forever be known as the day the Bethlehem Steel gravy train jumped the tracks.In reality, Bethlehem had been laying faulty track for decades, but didn't know it. No one factor was to blame. Rather, Black Friday — and ultimately the demise of Bethlehem Steel — was the confluence of decades of mistakes that caused the former behemoth to collapse under the weight of its own corporate obesity.Maybe things would have been different if the 1959 steelworkers strike hadn't opened the door to foreign steel and paved the way for years of labor contracts the company couldn't afford.Or maybe if The Steel's inbred board of directors had allowed members from outside the company before 1965, it would have realized sooner that the demand for steel would not always grow, and that the company needed to diversify rather than dump billions of dollars into outdated steel plants.Maybe if Bethlehem had not been so certain that foreign countries and upstart mini-mills couldn't compete with its product, it would have been better prepared when both started stealing its customers. It could have been quicker to buy into technologies such as basic oxygen furnaces and continuous casting, quicker to respond to the competition of plastics and aluminum and quicker to abandon a corporate culture that emphasized conformity over innovation.By the time those revelations landed in Bethlehem in 1977, nearly 10,000 shocked and angry employees were out of work, suddenly left with too much time to ponder what happened.''What are we supposed to do now?'' Burkhardt says to a restaurant full of unemployed colleagues as they gulp pitcher after pitcher of Lehigh Valley-brewed Schaefer beer that does little to help them forget their fate.For Bethlehem Steel, there would be years when profits would return, and there would be occasional signs of hope. But overall, Black Friday signaled the start of a quarter-century decline in which jobs were lost, dreams were shattered and an industrial icon plodded toward a slow, agonizing death.Even if the realization that The Steel was in trouble had come sooner, hindsight shows there was little it could have done to prevent much of the pain that would follow Black Friday. It wasn't just Bethlehem that was sick; it was the entire steel industry.In the final 25 years of a century in which steel had become king, nearly 1.5 million steelworkers lost their jobs. Half were from the foreign countries that U.S. steelmakers blamed for eliminating American jobs. While the United States was losing 73 percent of its steel jobs in that span, Japan was losing 57 percent and Germany was losing 67 percent.The collapse seemed to catch the company off guard. Only a few years earlier, in 1972, Bethlehem Steel built a new headquarters on the city's west side. At 330 feet, it was the tallest building in the Valley, reaching 8 feet higher than the Allentown headquarters of electric utility PPL.But the extravagance didn't stop with its size. The building was constructed in the shape of a cross rather than a traditional square to create more corner and window offices for the glut of vice presidents in the company's top-heavy executive food chain.These weren't just any offices accented by two walls of windows. The executive offices, specially designed by New York decorators, were adorned with ornate furniture, wooden doorknobs engraved with the company logo and handwoven carpet. When the executive boardroom's carpet was damaged in transit up the elevator shaft, the weavers were brought to Bethlehem from New York to fix it.''Only the best decorators and the best furniture would do,'' says Craig Bartholomew, a senior buyer who ordered much of the materials and furniture for the office complex. ''After all, this was Bethlehem Steel.''The 21-story Martin Tower was a monument to one of the most powerful companies in the nation. Bethlehem was on a 39-year run of annual profits, including the $134.6 million it netted the year its imposing new headquarters opened. Its profits continued right through 1974, when they hit a record $342 million. Demand was high, and the money was flowing. Life at Bethlehem Steel was good.But Ethel Gasda was getting suspicious. A former ''pistol packin' mama'' who brought bullets to work as part of the plant security patrol during World War II, Gasda was sweating bullets over what she saw while working as a secretary in a Bethlehem Steel vice president's office.She had been at Bethlehem Steel for parts of four decades, but in the months leading up to Black Friday, she was worrying. The company where employees thought they had a job for life, the company known for its philanthropy, was slashing its charitable offerings. It reduced its matching grant donations to Lehigh University. It cut its annual donations to the Metropolitan Opera in New York. Gasda realized there was a rising sense of panic in the executive offices of the 21st floor.''When they started cutting all that down, you knew,'' Gasda says in the flawless diction she honed in The Steel's perfectly proper executive offices. ''They didn't stop it completely, but it was going down, down, down.''Gasda had reason to be nervous. By the time the company closed out its record year in 1974, the mini-mills it regarded as a mere annoyance were cutting into its business. Nucor of Charlotte, N.C., with its electric furnaces and streamlined staff of nonunion laborers, had seen its sales increase tenfold in the previous decade.When Nucor started in 1966, the inferior steel from its furnaces could only chip away at Bethlehem Steel's low-grade steel wire, rod and bars business. But now, new technology had Nucor producing a better product and stealing Bethlehem's structural business, too.As Nucor and its copycats pecked at companies such as Bethlehem and U.S. Steel from one side, imports came at them from the other. Bethlehem had spent the past 15 years arrogantly ignoring both threats, and now it was too big, too fat and too unwilling to abandon its culture of conformity to respond quickly enough.Two decades earlier, Chairman Eugene G. Grace declared that Bethlehem Steel could sell all of the steel it could make, and company executives had been predicting increases in demand every year since.While demand more than tripled between 1950 and 1973, Grace looked more like a genius than an optimist. But then demand hit a plateau. With fenders, dashboards and bumpers being made of plastic, cars needed far less steel. Some bridges and buildings were being made with precast concrete, and aluminum companies had begun to steal Bethlehem's frozen orange juice, soda and beer can business. It wasn't just the beginning of a 20-year plateau in demand; Bethlehem's piece of the pie was shrinking. With too many steel companies possessing too much capacity, the industry became a matter of survival, and Bethlehem Steel eventually would prove it was not among the fittest.All of the trends that had been building since the 1950s hit hard, and bad luck heaped on to make 1977 a nightmarish year for Bethlehem Steel. In January, nearly 14 feet of snow had already fallen on the banks of Lake Erie, where its Lackawanna plant operated, when a three-day storm brought 70 mph winds and several more feet of snow.Hundreds of workers were stranded in the plant, while others using high-wheeled payloaders cut through the drifts to rescue workers marooned at the ore storage pits, John Strohmeyer says in his book, ''Crisis in Bethlehem.'' No workers were lost, but the blizzard halted production, costing the company more than $10 million in sales and plant repairs.A week later, on Feb. 7, an underground fire struck Bethlehem's Cambria Division coal mines, 40 miles outside Pittsburgh. A fire in Mine 32 quickly grew out of control, spread to Mine 33 and burned for weeks, until workers built concrete walls to isolate the two mines and flooded them with water. Mine 33 remained closed for two months, and Mine 32 didn't reopen until the following year. The fire caused about $15 million in damage, but that was on top of the coal business Bethlehem lost and the money it spent to buy coal from elsewhere to run its plants.As the company cleaned up the mine fire wreckage, torrential storms pounded Johnstown on July 20, dropping a foot of rain on The Steel's Johnstown plant. The Stonycreek and Little Conemaugh rivers washed over their banks, sending water as deep as 8 feet flowing through the downtown streets. Seven earthen dams failed, including one break that killed 44 people. In all, 78 people died, 413 homes were lost and 1,363 were damaged. Floods wracked the plant and deluged Bethlehem's coal mines, dealing it an additional $40 million in cleanup and repair costs.By December, the company's executives had nothing to celebrate, but they gathered for a lavish black-tie Christmas party at the guest house at the Saucon Valley Country Club's Weyhill Golf Course, which became the club's third course when The Steel added it in 1965.</td></tr></tbody></table></div><div></div>