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
I think it appears like that because the page to which I linked was originally in pdf format.
China is a slave state (Communist). Slaves make cheap labor but slaves really don't make for a strong economy in the long run because slaves can't be good consumers. Neither are the unemployed ---this global economy is the reason the economy is in such poor shape now.
I wouldn't be surprised to find out that other people do it as well. The cleverness of it is that it appeals to people who are lazy (like me) and don't want to follow a regimented personal accounting system, while being fairly bulletproof and without having to think as much about where your money goes. It sucks to be a penny pincher who follows every dime, and I have my doubts that that level of attention has returns that warrant the effort. I'm actually pretty savvy with money, but over the years I've found that this method easily gives some of the best results for almost no effort. The only time I properly manage my money is when I move it from my checking account into my investments; I keep an eagle eye on things once my short-term savings are converted to a long-term asset.
If one uses this method and avoids debt whenever possible, virtually everyone can build a really nice nest egg without agonizing over where all the money goes. As I said, I don't think tracking every penny is worth the effort; what you spend where doesn't matter so much as long as you manage to save some of the money at the end of the day.
My grandfather worked for Carnegie Steel (now US Steel) for 12 hours a day for a dollar a day...six days a week.
What most of those that do the "unions are bad" knee-jerk don't realize is that the unions got us most of what we expect (as workers) today. 40 hour week. Vacations. Benefits. They way some of these people post, you'd think that management, out of the goodness of their hearts, just decided, one day, to be nice to their workers. Yeah, right.
That said, I've worked in a union environment and now work in a non-union environment and much prefer a non-union environment. I do, however, recognize that unions got me where I am today, just like they brought thousands of people into the middle class.
I guess it is corny to expect someone (or some company) to keep a promise (or a contract) though...
My dad worked with a man who did him a wonderful service. The man found out that my dad wasn't contributing to the 401k. My parents had 3 little kids and didn't think they could afford it.
The guy took my dad by the arm, drug him into the office and INSISTED that he sign up. My mom didn't appreciate it at the time. LOL! When the benefits started wasting away my parents were so grateful to him. Mom and dad made sure to emphasize to all of us that saving for retirement is essential.
You need to learn more about contracts. Everything that has happened is perfectly consistent with contract law.
The contract was voided by a judge in the bankruptcy proceeding and converted to unsecured debt. There is nothing evil or unusual here. Both the customers and vendors of the company were hosed as well, generally far more than the employees because the vendors and investors don't have a socialist safety net to cover them.
If you are going to argue, at least argue from the facts relevant to the case. The correct analogy is if you entered into a contract to paint my fence and you died before painting my fence. I can't force your children to paint my fence, and the breach of contract with a dead person is a risk I take by entering the contract. If I don't realize that, then shame on me.
The company in question is officially dead. The point of the bankruptcy proceedings is to maximize the value of the assets of the dead corporation so that as much of its debts can be covered as possible. The contracts die with the corporation. The contracts that are kept in place by the judge (usually with mods to the contracts) are only done so if the judge feels this will maximize the value the people left holding the bag (vendors, customers, investors, employees) will realize. Unfortunately, for most corporate bankruptcies, unsecured debt is usually a total write-off. In the case of retired employees, the federal government guarantees some of this unsecured debt and so they get protections that the business people involved do not.
So stop the whining already. The former employees are getting more out of their contracts than many of the other people and entities who also had contracts with this company.
in my husbands case..it was the older guys screwing the newer and younger guys....
its about a union being so lacking in vision that it got early retirements for some and penalized everyone else...for a $900 turnaround per month for early retiree and worker....
none of that ever was rectified...
of course, company dangled that early retirment out just to get enough votes to decimate the pay and benefits of all the rest, and said union just went along with it...
that was years ago...now its bankruptcy, and Pension board and forget about any health benefits...
jobs gone....plant almost gone...
and by the way...the ones that are getting screwed the most are the loyal COMPANY salaried workers....they have no union to at least speak for them ...
between big corporations...and the big unions...I don't know who to blame but each of them has destroyed a big slice of the American pie...
Stayed at Bethlehem Steel for their entire career, in exchange for expressly written benefits? These workers made good on their part of the bargain, and now the Bethlehem Steel has defaulted on theirs.
I'm not pro-union but when you look at the American Revolution and the French Revolution and others, it doesn't seem that the aristocrats ever just give rights to people, it's something they have to fight for. Having a strong middle class is what made the US strong and stable at one time, upper classes exist in every third world country so it isn't the upper class that makes for a strong economy.
Because NOBODY--repeat, NOBODY--wants to live downwind of a big steel mill. Everyone's in favor of the money it would bring into their community--and opposed to the undesirable side effects.
Only an idiot would be blind to the blight and decay in most of our urban areas. Why can't our country be building at a pace similar to that of China.
China is Enron with a nuclear arsenal. Don't look to them as a model--they're going to go down, HARD, in our lifetimes.
Why? GREED and LAZINESS!
"Everyone wants to go to Heaven, but nobody wants to buy a ticket."
What gets me is these business and corparations hating people can't understand why they move their business off shore!
I agree that people in such jobs should derive benfits in accord with their labor, but the point I made (and many others have also made), is that the big steel plants and the unions raised the price of US-made steel so high that foreign steel makers saw the opportunity and acted upon it.
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