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
Ok, I won't.
"Have you ever lived for two weeks on Ramon Noodles (only 15cents a package on sale) because you couldn't risk even bouncing a check to pay for groceries. If my husband bounced a check he not only got in trouble at the bank, he had to face his seargent the next day."
OK, I will. Make up your mind.
Don't assume you're the only ex-military folks here. I know all about the bounced checks thing.
Don't know what your husband did, but I was freezing my butt off on telephone poles in Kunsan, about the time we were both eating ramon noodles.
Ever been underground in mosquito infested land. no AC, for $5 an hour? Ever ride your bike through the snow in Michigan winter in a McDonalds uniform? Ever live in your car?
Thanks to working for non-union companies, and planning for my OWN retirement, I put in my hard knocks, put myself through school, and now make artificial hearts for a living.
Now it is theirs. Because they think like you.
Some people here think that you can't commit fraud if you wear an expensive 3-piece suit, have a fancy title, and spend your "working hours" on the golf course and at hundred dollar dinners.
Got any figures to back this up?
Labor is typically the largest cost in ANY industry.
The labor costs for a ton of steel are around $13. That figure was in the newpaper today. It didn't come from the union either. It came from a VP at Nucor.
BTW, the pension and healthcare benefits that retirees used to enjoy are called deferred compensation. Exactly the same as the stock options that some dot-coms used to hand out like candy.
From what I can see, it's not the workers that screwed up or even screwed the company. This mess was caused by the same thing that is responsible for 90% of the problems in business...management.
Your may be right re the health plan, but there's a small matter of $3.2 billion that we taxpayers are apparently going to be stuck with. As the article says:
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.
If I make a promise to pay my mortgage company X dollars 25 years from now, and fail to follow through with it, how is that any different from a company promising to pay it's retirees X dollars 25 years from now and not honoring it?
Then why is the pension fund minus over 3 BILLION dollars?? By whom and how was this accomplished?
I'm not defending the workers whining about their lost pensions, but somebody is 3 billion richer than the employees. And wasn't it their money?
It sounds to me like the company learned it's accounting practices from the US govt.
I'm not in favor of employees forcing pay and benefits up beyond reason, but if we're talking about an industry like steel, it should either support the employee, his family and their future, or be allowed to close.
If our government is not going to implement policies that see families able to support themselves and their futures, what has this nation come to? This is about as far from the American Dream as you can get.
I think that $6 figure is a mistake. That is probably the prescription drug co-pay. The premium runs around $150/month for the insured and spouse and around $300 if there are any dependents.
Without the US government financed International Socialism they gould have built newer plants and saved hundreds of thousand of high-paying jobs.
But as though that's not enough the US government has went all-out since the seventies to destroy them via EPA, OSHA and other regulations, fines, taxes etc.
With the all-out assault waged against the US steel producers by the US government and foreign governments it is amazing that any are still in business. Thank God American workers still have the highest produtivity in the world!!! Bar none!!!
Though many of the Anti-American/tax-Free-Trade-at-any-price-with-China crowd fail to ever admit tha fact....
Yeah.. blame the union. It can't possibly be the fault of management.
After spending only 2 years with the company.. most of that on the golf course.
As I said, he also works for a non-union company, and we too are saving quite a bit for our retirement. I was the one who also went to school to better our future. So I think we are living similar lives. I just got angry when you said that about the free ride because of one of his benefits.
To tell the truth I am also a little pissy today because we figured out our taxes for the year, and although over the past year I recieved a huge raise (I took a new job with a new company) we are now paying so much more in taxes that it was a little disappointing:(
So lets be friends and agree to disagree on this point of health insurance. It for us is a benefit (which don't worry we are not counting on for our retirement). But I do admit feeling sorry for the 81 year old man who work his whole life for his insurance, and now is told that he is losing it. It's one thing to plan for your retirement and save for a nice life of relaxation, only to find out that a huge chunk of that long saved money must now go for health care expenses that he never factored in.
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