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The Death of Steel Meant the Death of Jobs, Pensions and Health Benefits

Requiem for Bethlehem Steel?

by JOE DeRAYMOND

Years ago, we made steel here in Bethlehem. This is a statement of consequence, for the making of steel is not a cottage industry, it is an industry that builds nations and requires the labor and capital of a nation. The Bethlehem Steel enterprise stretched for over five miles along the Lehigh River. In 1970, 25,000 to 30,000 workers swarmed daily through the plant gates, a city within a city of men and women who turned iron ore into steel products.

I worked for some months of 1974 in the ingot mold plant, where five and ten ton molds were poured and finished. My first day on the job a fork lift operator erred and placed a ten ton mold on a worker, pinned his legs, then compounded his error by dropping the mold completely. The fork lifts were a ground-level hazard, the mold pits were below you, and the cranes swung the loads over your head. Black dust was heavy in the air.

I spent nights in the cooling yard, where a craneman would swing the slag encrusted hot molds to cool, and smash them into each other as he set them down to knock away the slag, which would slam into the walls of the warehouse like cannonballs. My job was to direct hoses over the molds to cool them. At the end of the night, I had to run down the sidewalk out of the yard, the heat of the combined molds would be so fierce. Other nights, I would find myself deep in the tunnels of the place, avoiding the bosses, coming up to watch the hot steel being poured into molds as workers walked along the edge of the fiery pools of molten metal.

Another night, I was flagman for the forklift driver who had dropped the load on the now-crippled steelworker. I had to wake him from his stupor, and watch that no one got near him as he slammed the molds around the yard. It did occur to me that the only one at risk was the flagman, me, as he careened through his work in order to get back to sleep.

The union had been established with riots and blood some decades before, and for the labor of their lives the workers now had decent pay, benefits, pension. But the plant was old, the corporation was not reinvesting profits, and by 1974 the system was decayed. There was a dispirited attitude about the place. Soon thereafter, the quick decline came, as the fat government war contracts ended with the end of the Vietnam War. The topheavy management and corporate structure, together with the unionized workforce, could not be supported within a steel industry where the profits were not in making steel, but by melting it down from existing scrap. The profit margin in a vertically integrated steelmaking operation is small compared to the capital required to make the coke, to fire the blast furnaces, to turn iron ore to steel. As the world turned to the steel in refrigerators and junk cars, and to the cheaper labor of Brazil and China, the big steel operations of the US died. Bethlehem Steel died, and in the last quarter century turned into a dark hulk of a plant on a small river, a brownfield contaminated by heavy metals and occupied by the hulks of rotting brick and steel buildings, the skeleton of a steel plant rising in silouhette against a night sky that used to be lit by the flames of the blast furnaces.

The death of the steel meant the end of the jobs, the end too of the pensions and the health benefits, as the bankrupt corporation became unable to meet its contract with its workers. It fell into Chapter 11 in 2001, and by 2003 the health benefits of the 95,000 retirees were ended, and the pensions capped as the company turned over its obligations to the government-run Pension Benefit Guarantee Board.

The United States now depends on others to take the risks and pay the human and enviromental price to produce the steel that goes into our bridges, buildings, and cars. The United State is the largest importer of steel in the world, over 30 million tons a year. It is the way of this superpower nation to consume, and to shift the production to those parts of the world where the labor is cheaper, the ability to pollute closer to absolute.

Even before the plant was fully closed, there was a drive for some sort of steel plant nostalgia. Local people wanted to memorialize the steel industry of Bethlehem, as if it occurred in some distant time, as if steelworkers were heroes of another culture, another era. It is almost as though people do not want to admit that steel could still be made here, that people should be paid a decent wage with decent benefits to produce the stuff of empire, the Empire State Buildings, Brooklyn Bridges, World Trade Centers of the world.

In the wake of the corporate failures of steel in the last years of the twentieth century, there has been an attempt to re-establish a corporate base in the deserted brownfields. Here in Bethlehem, this involves pouring millions of dollars of public money into infrastructure in order to lure industry to re-occupy the deserted land. The County built a $13,000,000 road into the old Steel site. The local congressman’s website touts grants of over $16,000,000 to build roads into South Bethlehem.

The money to fund the historic preservation of this Steel site did not materialize from either the public or the corporate sectors. Now comes the Governor of Pennsylvnia, Ed Rendell, the finance chairman of the Demcratic Governor’s Association (DGA). This is a "527" fundraising organization that just happened to receive $1,180,750 from casino companies in 2003 and 2004. The DGA also passed on $482,000 to Rendell in 2002 and 2003. Hence, it is no accident that when Ed is faced with a school tax crisis, he turns to his corporate buddies in the "gaming industry" for a solution. In Pennsylvania, schools are funded with property taxes, so that inner city schools have a poor tax base, a deficit budget, and poor facilities, while a suburban school has a rich tax base, and new schools and equipment. Further, people on fixed incomes, or low incomes, are getting squeezed out of home ownership by confiscatory school taxes. Ed Rendell proposed that Pennsylvania legalize slot machine gambling, then tax the proceeds and use it to pay for property tax relief for our school systems. This proposal, called Act 72, was approved by the legislature, and then presented to school boards for their participation. If a school board chooses to participate in Act 72 and accept gambling revenues, it is inhibited in its budget procedures and ability to raise taxes. Tax increases would be subject to a "back-end" referendum, if they exceeded inflation indexes in the district, as calculated under a complex formula.

The local target for a slot machine gaming hall is the ruins of the Bethlehem Steel plant. The corporation that would like to develop it is the Las Vegas Sands Corporation. The bait for public acceptance of this idea is not just property tax relief, but a preservation of the old Steel Plant. The political and economic leadership has decided that the money to preserve the memory of the Steel is in the wallets of busloads of fun-seeking citizens who will spend hour after hour pulling the magic handles of one armed bandits. Las Vegas Sands has promised to spend hundreds of millions of dollars on a gambling mecca that will preserve the memory of the Steel. The corporate interests who support gambling at the old steel plant have organized Bethworks Now, which is operating a slick public relations campaign to sway local residents.

In the Bethlehem area, however, many of the school boards rejected participation in Act 72, and opted out of the program, because they refused to give up the right to control their own budgets. There is also a recognition that this gambling business is somehow on the dark side of the moral code, and an understanding that regardless of the morality, lives will be destroyed by the brutal math of the slots ­ you play, you lose. So, there is still a slim chance that the slots proposal at Bethlehem Steel will be defeated, but the lure of fast money and jobs linked with the promise to preserve a lasting monument to the Days of Steel will be very difficult to defeat.

State governments run ad campaigns touting the possibilities of buying a ticket and getting rich quick. Government sponsors off track betting, riverboat gambling, casinos. Poker is a televised event. It is no surprise that people believe economic development, tax revenue for the school system, a financial bailout of the City of Bethlehem, and historic preservation can be achieved with thousands of slot machines in a refurbished steel plant. Of course, The Sands will be raking off significant profits as well. Where will the actual, as opposed to virtual wealth be created that will pay for all this fun, this free money through responsible gaming?

I imagine carpeted rows of clanging, whistling and exclaiming machines rattling with coins, transfixed players pulling levers, watching the spinning dials, praying for a jackpot. Will this be the requiem for Bethlehem Steel?

JOE DeRAYMOND lives in Freemansburg, PA, which is a town of 2000 on the Lehigh River adjacent to Bethlehem. He can be reached at: jderaymond@enter.net