Posted on 02/09/2003 4:00:38 PM PST by A Patriot Son
Bethlehem Steel collapse leaves retired workers scrambling for benefits
(AP) Sun, Feb. 09, 2003 BETHLEHEM, Pa. - Some of them went to work in the blast furnaces when they were just 18, then spent half a lifetime handling molten slag and inhaling steel dust in some of the most dangerous jobs on earth.
But for the tens of thousands of Bethlehem Steel workers who stuck it out, retirement brought a rich reward: a hefty pension and a lifetime of almost free health care for themselves and their families.
"It was capitalism's version of socialized medicine," said James Van Vliet, a retired Bethlehem Steel vice president. "And it was an implied contract. It was the company and the workers saying, 'We are going to take care of each other.'"
It may go down in history as a promise unfulfilled.
Bankrupt and only a shadow of its former might, Bethlehem Steel on Friday announced it was seeking bankruptcy court approval to terminate health and life insurance benefits for 95,000 retired workers and their dependents on March 31.
The move, seen as essential to the company's bid to sell its assets to International Steel Group, followed news in December that Bethlehem Steel's pension plan was underfunded by $3.2 billion and would be turned over to a government agency.
Both pieces of bad news were expected. The American steel industry has been in decline for decades, and most of its former giants have been trimming pensions and benefits for retirees for years.
But the one-two punch is still a staggering blow for a generation that had been promised a lifetime of comforts in return for a career spent at one company.
Now, some are facing the prospect of seeing their monthly $6 payments for health insurance jump to between $200 and $300.
"That's a lot to swallow," said Len Christman, 67, who worked 39 years at Bethlehem Steel's sprawling plant in Bethlehem, about 40 miles north of Philadelphia. "It's a very tough position to be in at this stage in life."
Nearly all retirees will continue to enjoy some benefits. Pension payments, which are being taken over by the Pension Benefit Guarantee Corp., are expected to continue at about 90 percent of their former level. For workers over 65, the federal Medicare program will pick up some health care costs.
But Medicare, which covers hospital visits, but doesn't pay for medications, won't come close to covering all the health problems suffered by many retired steel workers.
Joe Pancoe, who worked for Bethlehem Steel for 31 years, said that at 81, he has asthma and a hacking cough, and uses a slew of pills and inhalers to soothe his battered lungs.
"We, the old timers, were part of the industrial revolution. And now, we are part of the medical revolution. We have the emphysemas, we have the cancers. We have everything," he said.
He isn't positive his illnesses were related to his work as a spray painter in the plant's fabrication division, where he said his spit turned red from inhaling fumes, or in the research lab where he regularly handled bags of asbestos.
But as he sees it, the country owes him something either way. His labor built propellors for battleships and girders for skyscrapers and bridges.
"We helped the country, and the people who helped to build the country should get the benefit of it," Pancoe said.
Almost all workers agree Bethlehem Steel is in little position to help. When it filed for bankruptcy in 2001, the company had about 12,000 employees, down from more than 300,000 during World War II. And most factories have been closed, including the one in Bethlehem. The company's board also voted Saturday to sell the company's assets to Cleveland-based International Steel Group, a deal that is subject to approval by the U.S. Bankruptcy Court in New York.
Bruce Davis, a retired Bethlehem Steel lawyer who now serves as legal counsel for the Retired Employees Benefit Coalition, said several labor groups are negotiating to at least temporarily extend health-care benefits.
The coalition has asked that the company continue health benefits until May 31, rather than March. It also anticipates that it will be able to offer Bethlehem Steel retirees a replacement health insurance package similar to ones offered to retirees at other bankrupt steel companies.
The hardest burden, Davis said, will be borne by retired workers who are under 65, and thereby unable to qualify for Medicare coverage.
"We need to find a way to get them to age 65 without bankrupting their financial portfolio," Davis said. "If we can do that, the pain of seeing this proud company walk away from them, after so many years, will be considerably lessened."
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On the Net:
Bethlehem Steel: http://www.bethsteel.com
Do you approve of the billions the US government spent of US citizens' money to build steel plants in Japan, South Korea, Germany, Russia, and China?
You can call it whatever you want.... but do you approve of it?
First of all labor is not the only or even the biggest factor.
The secret is to keep the technology you nation invents as long as you can and not share it and and as your competitor nations discoer, aquire or steal your technology always hav newer more proidutive technology. And always have higher productivity than your lower wage competitors. Remember the USA has the highest productivity in the world in most industries (including steel--amazingly since our plants are much older than the ones many of our competitors have via US government financing).
But as a we are locked out of large markets like Germany and Japan due to high tarifs while we don't tarrif their steel at all.
Nearly every policy of our government and the foreign governments works against our manufacturers.
But the deluded tAX-FREE Trade at any price crowd just completely ignores these facts with their heads in the sand (in a relious zealot manner at the altar of so-called-free trade).
My mom and I have talked about this a lot. My dad went into management (out of the union) because of the promises made to him by the company. This was back in the early 70's, when people still believed that if they stuck around and did their job that the company would abide by it's promises. And at the time the company was very large, very stable (and dependent upon Bethlehem Steel, incidentally).
Well, the promises have largely gone by the wayside and my parents have done a good job of saving for themselves and being responsible so they'll be ok. But it strikes me, when I think about how my husband is offered no retirement benefits aside from some matching funds in the 401k, that maybe we're better off knowing way in advance that we're on our own.
It's like people counting on a bonus or a contribution to your 401k, don't ever count it as part of your wage, consider it a gift, then if you don't get it you're not stuck.
Been hanging around where my dad works? He's management and they've done it to him too. They can hire someone in at less than half his salary and way less vacation time. They've made the job so rotten and annoying that he's praying for the place to close down. As long as he can officially retire (he's 58), he'll be fine.
I really am a capitalist, my only point in the whole post was to reiterate that at many companies excellent health coverage is a part of a "wage package", and not a socialistic free ride that the other poster referred to.
If my husbands company changed its policies, I would be pissing and moaning along with all of the rest of them, but I would never, ever assume that it was a right that was being denied to me and I certainly wouldn't look for the government to fix the problem.
First of all...it's ladles, not "ladels". Second, there is much more to the steel industry than "dipping ladles". If you'd read the article that you demanded I reference, you'd know that. Third, that "overpriced labor" you talk about risks their lives everyday to produce steel. Some die, some are maimed, all bear scars. Even if a steelworker survives working in the mills, the odds are that they won't live too many years beyond 65. Years of exposure to toxic chemicals take their toll on a person. That's part of the reason (though not the only part) that they receive the wages that they do; the great risk they assume by working in a mill.
You are right on here. My company has a generous policy of pension benefits for life and the life of my spouse and 401 K benefits which they put under the employee's control some years ago. The company explained the retirement program and the fact that it depended on the company remaining viable in writing. We were surprised. We had all thought that when you retire the company generates an annuity for each retiree from the overfunded pension plan. Wrong. And to keep profits growing, the company has reduced their contribution to the pension fund while fudging the expected return on investment from the stock market which may be in a bear market for the next 20 years.
All this news means we are at risk like the steel workers of this article. I will take steps to protect my assets as I cannot rely on the company. the company, trades as LM on the NYSE.
.....I'm surprised this hasn't been mentioned more.....a country that can't make it's own steel is a weak country......ol' Mao was right when he said all power comes from the barrel of a gun.
One of my basic rules of living: Overestimate your expenses and underestimate your income, and you'll feel like you are living well and still be able to save.
I always round my expenses up when keeping track of what I spend (usually to the nearest $100) and always round my income down (usually to the nearest multiple of $500). Not only does this make it easy to keep track of roughly how much money I have in my head without spending time with a calculator or software, but every couple months I go in and look at my checking account and find out that a couple thousand extra dollars have materialized that I didn't account for that I can put into savings.
It sounds kind of stupid, but I've used it for years because of two benefits: First, the accumulated rounding error ends up being a lot of money that I didn't count on having in the first place. Second, I don't have to keep detailed track of my money (which I hate doing), because I'll never spend more than I have, which also helps keep me from going into debt. Also, rounding all my expenses up to big round numbers makes it easier to keep track of in my head.
I've estimated that I "created" an artificial windfall of about 15% of my income using this rounding trick. It has always made it really easy for me to save money because I'm not counting every penny I spend; even if I spend all my money by my accounting method, I'll still have a significant balance due to the rounding, and I don't actually have to make an effort to save money. And it appeals to my laziness at not wanting to balance my checkbook and similar. In fact, it works better if you don't balance your checkbook because you might see how much money you actually have left and spend it.
yes you do ,just ask the Government E.P.A departmet!!!
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