Bethlehem Steel Collapse Leaves Retired Workers Scrambling for Benefits (95,000 people)

Miami Herald ^ | Sun, Feb. 09, 2003 | DAVID B. CARUSO

[B4Ranch]

It's good to see someone get it right. CONGRATULATIONS!

[NP-INCOMPLETE]

I think the best term is a totalitarian state with a capitalist economy. Politically, its not too different from the Soviet Union, just somewhat more nationalistic. Economically, the system isn't at all centralized, workers do get checks, have their own bank accounts, and can own homes. You can't have such a fast growing economy without lots of de-regulation by the government and the incentives for the workers to work hard. It just that the incentives that motivates a chinese worker(meat for dinner everyday, an apartment, a DVD player) is far less than what it would take to motivate an American worker.

[TopDog2]

It's not only the middle class that makes for a strong economy. A strong manufacturing base is needed as well...

[DoughtyOne]

Paul, you touched on a very important issue at the end of your comment. When I damn corporate infractions, I want it to be clear, that unions too have to take their lumps for things they did wrong.

IMO there were union abuses in the steel industry as well as the auto industry. These abuses led to a climate where US products were too costly. This is cleary wrong. On the other hand corporations that pit ten cent an hour employees in China against a man trying to raise a family in the United States will be looked on very unfavorably by God at some point, again IMO. I firmly believe this is not the golden rule at it's best.

[DoughtyOne]

BTW Paul, I'm glad to hear these new steel mills pay a decent wage and are able to show a healthy profit as well. That's great. I appreciate the report.

[Koblenz]

Is he going to have to give up his stock options or millions of dollars in bonuses he likely got?

I'd say that if he had options, they're worthless now.

[PAR35]

I thought I had replied earlier, but I don't see it. Please forgive me if this is a double post.

You are right about the EPA - innocence is no defense when you run afoul of the 'greens'.

[1Old Pro]

Bethlem had over 300,000 working relatively high paying mostly blue collar during world war II. It had over 50,000 people working at Baltimore's Sparrows Point--the then largest steel plant in the world. Now it has less than 12,000 people nationwide.

Insert "General Electric" for Beth Steel and "Schenectady" for Baltimore and you get the same types of numbers.

Union labor is simply too expensive.

[A Patriot Son]

thanks freedomnews

[mabelkitty]

UNION contracts being the key word here. They should sue their union reps for all the dues they paid out.

Look for the auto makers to do the same thing. Boomers' union promises cannot be kept and everybody knows it. Do the math....

[mabelkitty]

LTV Steel tried to get the US Government to do just that.

They wanted you and I to assume their "legacy costs" (i.e, all the promised retirement benefits) so they could reorg in bankruptcy court.

Thank G it was shot down.

[mabelkitty]

This is precisely why the unions have lost their purpose. They can no longer promise wealth in collectively bargaining, so what is the purpose?

We have OSHA, so they aren't even needed for that.

Keep your eyes on the state worker and teacher pensions, as well as the Big Three auto makers. This shouldn't be a suprise to anybody.

[TopDog2]

I keep telling myself not to post to these threads since 99%+ of those that post have no idea what they are talking about, but I can't help myself...

One of the main reasons that the number of employees in the steel industry went through a huge contraction in the 70's and 80's was a direct result of the computer technology that became available during that same era. The processes that once took a huge workforce became manageable by fewer workers. Many mills that could not be easily updated to take advantage of the new technology were closed.

The real interesting thing is that labor costs per ton dropped dramatically during this time period which placed the US steelworker at the top of the world's productivity heap. The current figure for labor costs(which I posted earlier) is around $13/ton. You can buy a finished ton of automotive grade steel for around $600/ton. This makes the labor costs of a ton of steel around....2%. Contrast this with an energy cost of about 30%/ton...

If you add in the legacy costs(pension and healthcare) of $30/ton, you can see that adding the legacy costs brings the cost of labor to around 7% of a ton of finished steel(BTW, the cost to ship a ton of steel from one continent to another is about $60/ton...clearly something is rotten in Denmark). Still well below energy costs.

It's interesting to note that those legacy costs would probably be much less, but the US steelworker was a victim of it's own success. The more productive they became, the fewer of them were needed which meant that fewer workers were contributing to the pension plans just as the industry contracted and hundreds of thousands of new retirees were added to the rolls.

Again, as I said earlier, the blame for this whole problem isn't solely the fault of the union. Management is always at least 90% of the problem.

[mabelkitty]

However, manufacturing is not a growing secter of our economy, so even with the contractions of the 1970s, there was quite enought information available that showed the trend toward moving American businesses overseas for cheaper labor. That was not a move that occurred overnight and caught everyone by surprise.

[gogeo]

It seems there's a lot more heat than light on this issue.

At the end of the day, if a company cannot be profitable given its costs, it will go out of business.

BTW...the costs per ton ($13) were at Nucor, which is not an integrated steel company. They build mini mills and buy/melt scrap, which is the least labor intensive method. They are also non-union. They are not a representative example of labor costs.

Finally...there is no possible way that 12,000 employees can be productive enough to cover the health benefits for 95,000 retirees. This is not just a problem in steel, but in autos also.

Pensions in the steel industry have been underfunded for at least 20 years. It was a major issue in the 1970s and 80s.

[mabelkitty]

Yes, that is true. LTV had their first bankruptcy on that very issue in 1983, I believe. It's a shame nobody did anything about this gross misjudgement when it first reared its head.

I bet dollars to donuts taxpayers will be forced to pay for the promises unions can't keep today.

[bvw]

These long-term, guarenteed-benfit "contracts" are loans, gambling. As a class They have other very SCARY aspects and effects -- best to outlaw them, for being gambling, at least. As loans they put the burden on the future. The company and the union, typically in the businesses peak years, magically entitle themselves in an absolute fantasy of a contract to perpetual continuation of those benefits.

The Union Bosses at the time get both respect and money, the Company Bigwigs at the time get production and their own golden parachutes soon enough after, the workers, enjoy the then current high-level of benfits, and feel a serenity (a folly, that) that they have provided for the future. Someone else has promised to take care of it.

And -- this is vile and mean -- the workers tolerate greater risks to limb and health than would otherwise be accepted, because, hey, well, they are covered, their widows and orphans will be covered! Putting up with dangers, risk, noxious, broiling work envoronments, they *pride* each other in their folly.

Now the piper of time and truth is playing his tune -- those fools who sold their futures too cheaply, who worked like brutes and not like men, and put their future and legacies in weak hands for the sake of a fool's promise. They are crying foul.

Mercy should not be slack to the old, the poor, the widow and the orphan -- even to the folly of fools. Yet see it for what it is, and not as some DUE for *heroic* work efforts.

[Mears]

So A Patriot Son is a newbie! So what!

[gogeo]

I bet dollars to donuts taxpayers will be forced to pay for the promises unions can't keep today.

No doubt.

[Radioactive]

You said..."But where would they get insurance for anything near as cheaply as the company provided? You can't. And how would you set something like that up ahead of time?"

I say....." If we got the federal government out of healthcare---shut down HMO's ( A TEDDY KENNEDY INVENTION)allow the market to dictate pricing and get the damned lawyers off the backs of doctors, then maybe we all could afford healthcare. We might even get to have doctors making house calls again!"

Since the federal government has been involved in the healthcare issue, the costs have skyrocketed. The government is the biggest problem. Next tort reform.

I bet that the government will never give up its control of healthcare. It makes us dependent on them. If we are dependent, then we must vote for them in order to stay alive. HOW CONVIENENT.