Bethlehem Steel Graphic Banner: Chapter 7

Bethlehem Steel Graphic Banner: Chapter 7

Charlie Taylor, general superintendent of the Grace Mine, kept water pumps running for four years after the mine was closed to keep it from flooding.

''I couldn't believe they had done such a dumb thing,'' Taylor says of the closing. ''I kept the pumps going, because I figured one day they'd come to their senses and reopen it, but they never did.''

Bethlehem Steel was losing the battles of prognostication and innovation, but as the 1960s drew to a close, its attentions were focused elsewhere. The company averted another labor strike in the 11th hour by giving steelworkers a three-year deal that included a record 44-cents-an-hour wage hike, and big increases to the pension and benefit packages.

There was also a rising sense of worry about imports. On July 31, 1968, the day after the contract was signed, Bethlehem Steel raised prices 5 percent to pay for a new labor deal that would cost the industry an additional $1.5 million over three years, putting the company at an even bigger disadvantage in the face of foreign companies that were penetrating its markets.

Foreign imports that were insignificant before the 1959 strike accounted for 12 percent of all steel consumption in the nation nine years later. But Bethlehem Steel wasn't changing the way it did business to compete with foreign countries that were taking advantage of cheaper labor and new technologies. Instead, it wanted the federal government to make all of the changes.

''Recent trends, if allowed to continue, will seriously weaken the domestic steel industry and therefore threaten national security,'' Martin reported in 1968, urging Congress to set quotas on foreign steel.

The pleas of Martin and other industry executives were not ignored. In early 1969, steel producers in Japan and Europe agreed to voluntary quotas that would limit imports into the United Stated to about 14 million tons a year, about 4 million less than the previous year. The countries opted for the voluntary limits in the hope of avoiding legislated limits by Congress.

It was the first time foreign countries ever agreed to limit their sales in the United States, and as the 1960s closed, domestic steelmakers were optimistic.

Imports had become a growing concern, but trade limits would help keep them in check. Mini-mills were providing new competition, but the real money was in beams, sheets and raw tonnage. The electric furnaces never would be able to pump out steel of high enough quality to threaten those markets, and never would be able to produce enough tonnage to be a serious threat.

All this, The Steel's officials believed.

The $156 million in profits in 1969 convinced Steel executives that mini-mills and imports had not carved any significant pieces out of Bethlehem's market. The company was building a new, impressive headquarters as a pledge to the city where the company got its name, and it was shunning any suggestions that it move the headquarters to a bigger city.

The prospects for Bethlehem seemed bright.

''We have done a lot of thinking about the probable future of the city of Bethlehem and the Lehigh Valley,'' Martin said during groundbreaking for the headquarters on Aug. 26, 1969. ''It looks good to us. … In short, it is evidence that we are here to stay.''

In November 1970, Martin handed the company to his trusted second-in-command, 59-year-old Stewart S. Cort. He was a tall man with the sleek frame of an avid golfer, who had a Yale University economics degree and a Harvard School of Business graduate degree that helped carry him quickly up Bethlehem Steel's sales department ladder.

Though 1970 was a down year in which profits dipped below $100 million for the first time in eight years, the biggest immediate battles ahead for Cort were not against his competitors, but against the U.S. government.

The Labor Department was investigating allegations that Bethlehem Steel was discriminating against minorities.

The executive offices in Bethlehem, occupied solely by white men, first came under public scrutiny in 1964, when Philip B. Woodroofe was discharged from his job as supervisor of municipal services. Woodroofe, the white son of an Episcopal minister, said he was asked to resign after he refused to end his involvement in the Bethlehem Community Civic League, a newly formed citizens group dedicated to the advancement of blacks in the community.

His boss, F.C. Rabold, told Woodroofe he would have to either give up the group or leave the company. The company felt that his group would cause trouble rather then prevent it, he was told.

Woodroofe told his boss that neither he nor his wife would leave the league.