Bethlehem Steel Corporation
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The Bethlehem Steel Corporation (1857-2003), based in Bethlehem, Pennsylvania, once was the second largest steel producer in the United States (after Pittsburgh, Pennsylvania-based US Steel). But following its 2001 bankruptcy, the company was dissolved and the remaining assets sold to International Steel Group in 2003. During its life, Bethlehem Steel also was one of the largest shipbuilding companies in the world.
Bethlehem Steel's demise often is cited as one of the most prominent examples of the U.S. economy's transition away from industrial manufacturing and its inability to compete with low-wage foreign labor.
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Founding
The company began on April 8, 1857 as the Saucona Iron Works in South Bethlehem, Pennsylvania. Then, on May 1, 1861, the company changed its name to Bethlehem Iron Works. In its early years, it produced railroad rails and armor plating for the US Navy. In 1899, the company assumed the name, Bethlehem Steel Company.
In 1904, Charles M. Schwab (recently resigned from US Steel) and Joseph Wharton formed the Bethlehem Steel Corporation with Schwab becoming its first president and chairman of its board of directors. The Bethlehem Steel Corporation ascended to great prominence in American industry, installing the revolutionary grey rolling mill and producing the first wide-flange structural shapes to be made in America. These shapes were largely responsible for ushering in the age of the skyscraper and establishing Bethlehem Steel as the leading supplier of steel to the construction industry.
In the early 1900s, the corporation branched out from steel, with iron mines in Cuba and shipyards around the country. In 1913, it acquired the Fore River Shipbuilding Company of Quincy, Massachusetts, thereby assuming the role of one of the world's major shipbuilders.
Behind American landmarks
In 1916, Eugene G. Grace became the company's president, and, in 1945, he became its chairman, leading the company until 1960. Grace acquired a number of additional steel plants in the 1920s, and Bethlehem produced the steel for many of the country's most prominent landmarks, including New York City's Rockefeller Center and Madison Square Garden and San Francisco's Golden Gate Bridge.
The steel for American armed forces
During World War I and World War II, Bethlehem Steel was a major supplier of armor plate and ordnance products to the U.S. armed forces. Many of the nation's fighting ships used armor plate and large caliber guns supplied by Bethlehem steel.
During World War II, Bethlehem's 15 shipyards produced a total of 1,121 ships, more than any other builder during the war, employing as many as 180,000 persons in the process (company total employment was 300,000). When peacetime came, the plant continued to supply a wide variety of structural shapes for the construction trades and forged products for defense, power generation and steel-producing companies.
Bethlehem Steel's high point came in the 1950s, as the company began manufacturing some 23 million tons per year, and it built its largest plant, at Burns Harbor, Indiana, between 1962 and 1964.
Facing foreign competition
In the mid-1980s, the market for the plant's structural products began to diminish, and new competition entered the marketplace. Lighter, lower construction styles, resulting in low-rise buildings not requiring the heavy structural grades produced at the Bethlehem plant, caused Bethlehem Steel to discontinue its steelmaking activities at the main Bethlehem plant by the end of 1995. After roughly 140 years of metal production at its Bethlehem, Pennsylvania plant, Bethlehem Steel ceased operations in Bethlehem.
Cheaper foreign steel began being imported in the 1980s, negatively impacting Bethlehem Steel's market share in the U.S. steel industry. In 1982, the company reported a loss of US$1.5 billion and was forced to shut down many of its operations. Profitability returned briefly in 1988, but restructuring and shutdowns continued through the 1980s and 1990s.
Closing and bankruptcy
With the closing of its local operations and its extraordinary ensuing impact on the local Lehigh Valley area, Bethlehem Steel decided to help revitalize the South Side of Bethlehem, and hired outside consultants to develop conceptual plans on the reuse of the massive property. The consensus was to rename the 163-acre (660,000 m²) site Bethlehem Works and to use the land for cultural, recreational, educational, entertainment and retail development. The National Museum of Industrial History, in association with the Smithsonian Institution, and the Bethlehem Commerce Center, consisting of 1,600 acres (6.5 km²) of prime industrial property, were erected on the site.
In 2001, Bethlehem formally filed for bankruptcy. Two years later, in 2003, the company's remnants, including its six massive plants, were acquired by the International Steel Group.
External link
- Bethlehem Steel homepage (archived) (http://web.archive.org/web/20041127091024/http://www.bethsteel.com/) - A November 27, 2004 historic Internet Archive cache of the no longer operational site
- Fortune: "The Sinking of Bethlehem Steel" (http://www.fortune.com/fortune/fortune500/articles/0,15114,602105-1,00.html) - an "autopsy" of the company