The Bethlehem Steel Corporation (commonly called Bethlehem Steel) was a steel and shipbuilding company that began operations in 1904 and was America's second-largest steel producer and largest shipbuilder.
The Bethlehem Steel roots trace back to 1857 with the establishment of the Bethlehem Iron Company; the Bethlehem Iron Company (also known as Bethlehem Iron Works or simply Bethlehem Iron) was established as the Saucona Iron Company and ceased operations in 1901. However, the Bethlehem Steel legacy began in 1899 with the formation of the first Bethlehem Steel, the Bethlehem Steel Company which was two years before the Bethlehem Iron Company ceased operations. The Bethlehem Steel Company (also known as Bethlehem Steel Works) leased all properties from the Bethlehem Iron Company from 1899 to 1901 and assumed ownership of all properties from the Bethlehem Iron Company after the Bethlehem Iron Company ceased operations.
The Bethlehem Steel Company became the primary subsidiary company of the Bethlehem Steel Corporation in 1904. The Bethlehem Steel Company is the first Bethlehem Steel while the Bethlehem Steel Corporation is the second Bethlehem Steel; both companies existed simultaneously after 1904, but the Bethlehem Steel Company was eventually merged into the Bethlehem Steel Corporation in the 1960s.
The Bethlehem Steel Corporation (using the Bethlehem Steel Company) and the Bethlehem Shipbuilding Corporation, which was also a Bethlehem Steel Corporation subsidiary, were two of the most powerful symbols of American industrial manufacturing leadership. Their demise is often cited as one of the most prominent examples of the U.S. economy's shift away from industrial manufacturing, its failure to compete with cheap foreign labor, and management's penchant for short-term profits.
After a decline in the American steel industry and other problems leading to the company's bankruptcy in 2001, the Bethlehem Steel Corporation was dissolved and the remaining assets sold to International Steel Group in 2003; Bethlehem Steel Corporation did not merge with/into International Steel Group.
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History
Roots: the Bethlehem Iron Company
Establishment
The Saucona Iron Company was established by Augustus Wolle. The Panic of 1857, a national financial crisis, halted further organization of the company and construction of the works. Eventually, the organization was completed, the site moved elsewhere in South Bethlehem, and the company's name was changed to the Bethlehem Rolling Mill and Iron Company. On June 14, 1860, the board of directors of the fledgling company elected Alfred Hunt president.
On May 1, 1861, the company's title was changed again, this time to the Bethlehem Iron Company. Construction of the first blast furnace began on July 1, 1861, and it went into operation on January 4, 1863. The first rolling mill was built between the spring of 1861 and the summer of 1863, with the first railroad rails being rolled on September 26. A machine shop, in 1865, and another blast furnace, in 1867, were completed. During its early years, the company produced rails for the rapidly expanding railroads and armor plating for the US Navy.
Growth
Although the company continued to prosper during the early 1880s, its share of the rail market began to decline in the face of competition from growing Pittsburgh-based firms such as the Carnegie Steel Company. The nation's decision to rebuild the United States Navy with steam-driven, steel-hulled warships reshaped Bethlehem Iron Company's destiny.
Following the American Civil War, the Navy quickly downsized after the end of hostilities, as national energies were redirected toward settling the West and rebuilding the war-ravaged South. Almost no new ordnance was produced, and new technology was neglected. By 1881, international incidents highlighted the poor condition of the U.S. fleet and the need to rebuild it to protect U.S. trade and prestige.
In 1883, Secretary of the Navy William E. Chandler and Secretary of the Army Robert Todd Lincoln appointed Lt. William Jaques to the Gun Foundry Board. Jaques was sent on several fact-finding tours of European armament makers and on one of these trips he formed business ties with the firm of Joseph Whitworth of Manchester, England. He returned to America as Whitworth's agent and, in 1885, was granted an extended furlough to pursue this personal interest.
Jaques was aware that the U.S. Navy would soon solicit bids for the production of heavy guns and other products such as armor that would be needed to further expand the fleet. Jaques contacted the Bethlehem Iron Company with a proposal to serve as an intermediary between it and the Whitworth Company, so that Bethlehem could erect a heavy-forging plant to produce ordnance. In 1885, John Fritz, accompanied by Bethlehem Iron Company directors Robert H. Sayre, E.P. Wilbur, William Thurston, and Joseph Wharton, met with Jaques in Philadelphia. In early 1886, a contract between Bethlehem Iron and the Whitworth Company had been executed.
In spring 1886, Congress passed a naval appropriations bill that authorized the construction of two armored second-class battleships, one protected cruiser, and one first-class torpedo boat, and the complete rebuilding and modernization of two Civil War-era monitors. The two second-class battleships (the USS Texas and the USS Maine) would have both large-caliber guns (12-inch and 10-inch respectively) and heavy armor plating. Bethlehem secured both the forging and armor contracts on June 28, 1887.
Between 1888 and 1892, the Bethlehem Iron Company completed the first U.S. heavy-forging plant. It was designed by John Fritz with the assistance of Russell Wheeler Davenport, who had entered Bethlehem's employ in 1888. By autumn 1890, Bethlehem Iron was delivering gun forging to the U.S. Navy and was completing facilities to provide armor plating.
During the 1893 Chicago World's Fair, a structure that was designed to make the world marvel received its giant axle from Bethlehem Iron. The world's first Ferris wheel needed enough steel to assemble a 140-foot tower to support an all-steel wheel, altogether making a 264-foot (80 m) structure. The iron made in Bethlehem Steel's blast furnaces was responsible for the world's largest single piece of cast iron that had ever been made up to that time.
In 1898, Frederick Taylor joined Bethlehem Steel as a management consultant in order to solve an expensive machine shop capacity problem. Taylor and Maunsel White, with a team of assistants, applied a series of management principles established by Taylor and that later would be known as scientific management to increase mass production.
The Bethlehem Iron Company was very successful and profitable. The corporate ownership of the Bethlehem Iron Company believed that it can be even more profitable. To accomplish that goal, the corporate ownership of the Bethlehem Iron Company switched to steel production- the steel production became known as a new company called Bethlehem Steel Company.
The first company: the Bethlehem Steel Company
Establishment and involvement with the Bethlehem Iron Company
In 1899, the Bethlehem Steel Company was established, this is the first company to carry the name Bethlehem Steel. The Bethlehem Steel Company (also known as Bethlehem Steel Works) was incorporated to take over all liabilities of the Bethlehem Iron Company. The ownership of both companies was identical, thus it was originally thought that the Bethlehem Iron Company was renamed Bethlehem Steel Company, though it is not the case. The Bethlehem Iron Company and the Bethlehem Steel Company are both separate companies with the exact same ownership. The Bethlehem Steel Company leased the properties that were owned by the Bethlehem Iron Company, even though both companies had the same ownership.
In 1901, Charles M. Schwab, who is unrelated to the stockbroker Charles R. Schwab (using a syndicate from J.P. Morgan Chase & Co.) purchased the Bethlehem Steel Company. During this time, the company's lease with the Bethlehem Iron Company came to an end (canceled) as the Bethlehem Steel Company gained control of all properties from the Bethlehem Iron Company; the Bethlehem Iron Company ceased operations.
Operating as a subsidiary of the United States Shipbuilding Company
Schwab transferred his ownership of the Bethlehem Steel Company to the United States Steel Corporation (U.S. Steel), the company he was president of. However this was brief as Schwab repurchased Bethlehem Steel Company and then sold it to the United States Shipbuilding Company. The United States Shipbuilding Company as well owned Bethlehem Steel Company under a brief time. The United States Shipbuilding Company was in turmoil; its subsidiaries including the Bethlehem Steel Company contributed to the United States Shipping Company's problems. Schwab again became involved with Bethlehem Steel Company, however through the parent company, the United States Shipping Company.
The United States Shipping Company planned in 1903 to reorganize as the Bethlehem Steel and Shipbuilding Company, this would be the second company to use the name Bethlehem Steel. However, the United States Shipbuilding Company was not reorganized as the Bethlehem Steel and Shipbuilding Company and instead a new plan was drawn up for a new company to be formed to replace the United States Shipbuilding Company and this new company would take the "Bethlehem Steel and Shipbuilding Company" name. The new plan would be executed in 1904 but the new company did not take the "Bethlehem Steel and Shipbuilding Company" name. Instead, the new company which would replace the United States Shipping Company took the name Bethlehem Steel Corporation.
The second company: the Bethlehem Steel Corporation
Establishment and early growth
In 1904, the Bethlehem Steel Corporation was formed, this is the new company replacing the United States Shipbuilding Company; the new company did not use the name "Bethlehem Steel and Shipbuilding Company". The Bethlehem Steel Corporation was formed by Schwab, who had recently resigned from U.S. Steel and by Joseph Wharton who founded the Wharton School of Business in Philadelphia. Schwab became the first president and first chairman of its board of directors of the Bethlehem Steel Corporation..
After its formation, the Bethlehem Steel Corporation purchased the Bethlehem Steel Company and the remaining subsidiaries from the United States Shipbuilding Company; the Bethlehem Steel Corporation did not purchase the United States Shipbuilding Company. The Bethlehem Steel Company became a subsidiary of the Bethlehem Steel Corporation, though the Bethlehem Steel Company also had subsidiaries of their own. The Bethlehem Steel Corporation becomes the second company to use the name Bethlehem Steel. The Bethlehem Steel Corporation became the second largest steel provider in the United States with the help of the subsidiary Bethlehem Steel Company which was the first Bethlehem Steel. Both the Bethlehem Steel Company and the Bethlehem Steel Corporation existed simultaneously after 1904. However, the Bethlehem Steel Company was eventually merged into the Bethlehem Steel Corporation in the 1960s.
The Bethlehem Steel Corporation installed the gray rolling mill and producing the first wide-flange structural shapes to be made in America. These shapes were partly 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. In 1917, it incorporated its shipbuilding division as Bethlehem Shipbuilding Corporation, Limited. In 1922, it purchased the Lackawanna Steel Company, which included the Delaware, Lackawanna and Western Railroad as well as extensive coal holdings.
1930s and 1940s
During World War I and World War II, Bethlehem Steel was a major supplier of armor plate and ordnance to the U.S. armed forces, including armor plate and large-caliber guns for the Navy.
In the 1930s, the company made the steel sections and parts for the Golden Gate Bridge and built for Yacimientos Petrolíferos Fiscales (YPF), a new oil refinery in La Plata City, Argentina, which was the tenth-largest in the world. During World War II, as much as 70 percent of airplane cylinder forgings, one-quarter of the armor plate for warships, and one-third of the big cannon forgings for the U.S armed forces were turned out by Bethlehem Steel.
Bethlehem Steel ranked seventh among United States corporations in the value of wartime production contracts. Bethlehem Shipbuilding Corporation's 15 shipyards produced a total of 1,121 ships, more than any other builder during the war and nearly one-fifth of the U.S. Navy's two-ocean fleet. It employed as many as 180,000 persons, the bulk of the company's total employment of 300,000.
Eugene Grace was president of Bethlehem Steel from 1916 to 1945, and chairman of the board from 1945 until his retirement in 1957. Eugene Grace orchestrated Bethlehem Steel's wartime efforts. In 1943, he promised President Roosevelt one ship per day, and exceeded the commitment by 15 ships.
The war effort drained Bethlehem of much of its male workforce. The company hired female employees to guard and work on the factory floor or in the company offices. After the war, the female workers were promptly fired in favor of their male counterparts.
On Liberty Fleet Day, September 27, 1941, President Franklin D. Roosevelt was present at the launching of the first Liberty ship SS Patrick Henry at Bethlehem's Fairfield (Baltimore) yard. Also launched that same day was the Liberty SS James McKay at Sparrows Point and the Emergency vessel SS Sinclair Superflame at Fore River in Quincy, Massachusetts.
1950s and 1960s
When peacetime came, the plant continued to supply a wide variety of structural shapes for the construction trades. Galvanized sheet steel under the name BETHCON was widely produced for use as duct work or spiral conduit.
Additionally, the company produced forged products for defense, power generation, and steel-producing companies.
From 1949 to 1952, Bethlehem Steel had a contract with the federal government of the United States to roll uranium fuel rods for nuclear reactors in Bethlehem Steel's Lackawanna, New York, plant. Workers were not aware of the dangers of the heavy metals they were rolling and were not given protective equipment. (Some workers have since attempted to receive compensation under a 2000 radiation-exposure law. The law required the Labor Department to compensate workers up to $150,000 if they developed cancer later in life, if their work history involved enough radiation exposure to significantly increase their cancer risk. The Bethlehem Steel workers have not been awarded this compensation because the radiation dose involved in processing fresh uranium fuel is low, and produces a small risk relative to the baseline risk. The larger danger in processing uranium is chemical poisoning from the heavy metal, which does not produce cancer.)
The steel industry in the U.S. prospered during and after World War II, while the steel industries in Germany and Japan lay devastated by Allied bombardment. Bethlehem Steel's high point came in the 1950s, as the company began manufacturing 23 million tons per year. In 1958, the company's president, Arthur B. Homer, was the highest-paid U.S. business executive. The firm built its largest plant, at Burns Harbor, Indiana, between 1962 and 1964.
The late 1960s offered a harbinger of the troubled times to come. In 1967, the company lost its bid to provide the steel for the original World Trade Center. The contracts, a single one of which was for 50,000 tons of steel, went to competitors in Seattle, St. Louis, New York and Illinois.
1970s through 1990s
The U.S. advantage lasted about two decades, during which the U.S. steel industry operated with little foreign competition. But eventually, the foreign firms were rebuilt with modern techniques such as continuous casting, while profitable U.S. companies resisted modernization. Bethlehem experimented with continuous casting but never fully adopted the practice.
Meanwhile, the average age of the Bethlehem workforce was increasing, and the ratio of retirees to workers was rising, meaning that the value created by each worker had to cover a greater portion of pension costs than before. Former top manager Eugene Grace had failed to adequately invest in the company's pension plans during the 1950s. When the company was at its peak, the pension payments that should have been made were not. As a result, the company encountered difficulty when it faced rising pension costs and diminishing profits.
By the 1970s, imported foreign steel was generally cheaper than domestically produced steel. The company faced growing competition from mini-mills, smaller-scale operations that could sell steel at lower prices.
In 1982, Bethlehem reported a loss of US$1.5 billion and shut down many of its operations. Profitability returned briefly in 1988, but restructuring and shutdowns continued through the 1990s.
In the mid-1980s, demand for the plant's structural products began to diminish, and new competition entered the marketplace. Lighter construction styles, in part due to lower-height construction styles (i.e., low-rise buildings), did not require the heavy structural grades produced at the Bethlehem plant.
In 1991, Bethlehem Steel Corporation discontinued coal mining (under the name BethEnergy). Bethlehem Steel exited the railroad car business in 1993.
At the end of 1995, it closed steel-making at the main Bethlehem plant. After roughly 140 years of metal production at its Bethlehem, Pennsylvania plant, Bethlehem Steel Corporation ceased its Bethlehem operations.
The Bethlehem Steel Corporation ceased shipbuilding activities in 1997 in an attempt to preserve its steel-making operations. The Bethlehem Steel Corporation would file for bankruptcy in 2001 and dissolve in 2003.
Closing and bankruptcy
Despite the closing of its local operations, the Bethlehem Steel Corporation tried to reduce the impact on the Lehigh Valley area with plans to revitalize the south side of Bethlehem. It hired consultants to develop conceptual plans on the reuse of the massive property. The consensus was to rename the 163 acres (66 ha) 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 (650 ha) of prime industrial property, would be erected on the site along with a casino and large retail and entertainment complex.
Inexpensive steel imports and the failure of management to innovate, embrace technology, and improve labor conditions contributed to Bethlehem's demise.
In 2001, the Bethlehem Steel Corporation filed for bankruptcy. In 2003, the company was dissolved and its assets, including its six massive plants, were acquired by the International Steel Group; the Bethlehem Steel Corporation did not merge with/into International Steel Group. International Steel Group was acquired by Mittal Steel in 2005, which merged with Arcelor to become ArcelorMittal in 2006. Since the Bethlehem Steel Corporation was dissolved instead of being merged into International Steel Group, the former company is not part of the former International Steel Group heritage, the former Mittal Steel's heritage and the current ArcelorMittal's heritage.
In 2007, the Bethlehem property was sold to Sands BethWorks, and plans to build a casino where the plant once stood were drafted. Construction began in fall 2007; the casino was completed in 2009. The casino had difficulty finding structural steel for construction due to a global steel shortage and pressure to build Pennsylvania's tax-generating casinos. 16,000 tons of steel were needed to build the $600 million complex.
The site of the company's original plant in Bethlehem, Pennsylvania, is home to SteelStacks, an arts and entertainment district. The plant's five blast furnaces were left standing and serve as a backdrop for the new campus. SteelStacks currently features the ArtsQuest Center, a contemporary performing arts center, the Sands Casino Resort Bethlehem, a gambling emporium, and new studios for PBS member station WLVT-TV (channel 39). The area also includes three outdoor music venues - Levitt Pavilion, a free music venue featuring lawn seating for up to 2,500 people, Air Products Town Square at Steelstacks, and PNC Plaza, which hosts concerts featuring well-known artists. Levitt Pavilion and the Sands Casino Resort are connected via the Hoover-Mason Trestle linear park.
In 2012, Bethlehem Steel, a three-piece indie rock band, named itself after the company to honor it.
In 2016, a warehouse being used as a recycling facility that was part of the Lackawanna Bethlehem Steel Complex caught fire and burned down on November 9th.
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Shipyards
- Fore River Shipyard - Massachusetts
- Bethlehem Sparrows Point Shipyard in Sparrows Point, Maryland (now Barletta Industries Sparrows Point Shipyard and Industrial Complex)
- Alameda Shipyard - California
- Pier 70 in San Francisco - California (formerly "U.S. Iron Works", now BAE Systems San Francisco Ship Repair)
- Mariner Harbor, Staten Island, New York - active for the World War II years and beyond
- *Bethlehem Pennsylvania Shipyards, Inc., Beaumont, Texas (1948-1989) The Beaumont Yard was one of the major sources of offshore drilling rigs built in the United States with seventy-two (72) offshore rigs built at the yard. Seventy-one Type C1 ships were built during World War II by Pennsylvania Shipyards, Inc. The shipyard dated back to 1917 owned by the Beaumont Shipbuilding and Drydock Company (1917-1922). Pennsylvania Shipbuilding Company owned and operated the yard from 1922 to 1948. After Bethlehem Steel ownership (1948-1989), the yard was owned by Trinity Industries from 1989 to 1994.
Freight cars
From 1923 to 1991, Bethlehem Steel was one of the world's leading producers of railroad freight cars through their purchase of the former Midvale Steel and Ordnance Company, whose railcar division was at Johnstown, Pennsylvania. Despite its status as a major integrated steel maker, Bethlehem Steel Freight Car Division pioneered the use of aluminum in freight car construction. The Johnstown plant was purchased from Bethlehem Steel through a management buyout in 1991, creating Johnstown America Industries.
Influence on American landmarks
The company manufactured the steel for many of the country's most prominent landmarks:
- Bridges:
- George Washington Bridge
- Golden Gate Bridge
- Peace Bridge
- Verrazzano-Narrows Bridge; Staten Island tower.
- Buildings:
- Alcatraz Island
- Chrysler Building
- Empire State Building (Bethlehem supplied some very large structurals only. Building was built by the American Bridge Division of US Steel, using steel manufactured by US Steel.)
- Madison Square Garden
- Merchandise Mart
- One Chase Manhattan Plaza 53,000-ton steel frame.
- Rockefeller Center
- Waldorf Astoria
- Dams:
- Bonneville Dam
- Grand Coulee Dam
- Hoover Dam
- Railways:
- San Francisco Municipal Railway
Bethlehem Steel fabricated the largest electric generator shaft in the world, produced for General Electric in the 1950s. It also supplied the steel used for the Wonder Wheel in Coney Island.
Source of the article : Wikipedia
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