Book Reviews : America’s Rusting Steel Industry

And the Wolf Finally Came: The Decline of the American Steel Industry by John P. Hoerr (University of Pittsburgh Press: $39.95 cloth; 14.95, paper; 691 pages)

If you really want to know what succeeds and what fails in the American way of doing business, put down Lee Iacocca’s “Talking Straight” and Donald Trump’s “The Art of the Deal”--and pick up a copy of John P. Hoerr’s “And the Wolf Finally Came.”

Hoerr’s saga of the American steel industry is a surprisingly rich and readable book. As a veteran reporter for Business Week, Hoerr writes about the American economy--and especially the intricate machinations of big business, big labor and big government--with real savvy and sophistication. His depiction of life in the mill towns of the Monongahela River Valley in Pennsylvania has some of the tragic grandeur of “Grapes of Wrath.” And Hoerr tells the story in a quiet but intense voice that sometimes reminds us of a ballad by Bruce Springsteen: “Everybody growing up in America,” Hoerr remarks when considering the plight of young men and women in dead-end mill towns, “must decide whether to stay or move on.”

Hoerr’s book is a comprehensive history of steel-making in America--”one of the great industrial failures of modern times”--but he looks beyond the steel industry to contemplate the larger truths about the American enterprise. “The American system of organizing and managing work is obsolete,” declares Hoerr, who focuses on the decline of a once-mighty industry to show us “why American companies have lost their competitive edge in the new international marketplace.”

A Sense of Intimacy

Hoerr is a journalist, not a historian, and a native of the blighted “Mon Valley”--and he brings a sense of intimacy and immediacy that we might not expect to find in the work of a scholar. When, for example, he discusses the troubled history of strikes in the steel industry, Hoerr is an eyewitness: “The strike deadlines were always at midnight, and everybody went to bed not knowing if it was strike or no-strike and woke up at 7 a.m. knowing,” Hoerr writes. “If the mill siren didn’t give out its low, organlike moan at 7, the strike was on.”

Hoerr ranges easily through the history of the steel industry, showing us the corporate empire-building of the late l9th Century when Andrew Carnegie acquired coal mines, limestone quarries, iron-bearing mountain ranges, Great Lakes freighters and railroads to create what would become United States Steel (and, much later, USX). But the sheer scale of corporations like U.S. Steel--and their antique style of management--doomed the industry to failure, Hoerr suggests. “One century’s victorious strategy is apt to become the next century’s strategy for failure,” Hoerr observes. Carnegie’s masterpiece of “vertical integration” became a model for “a steel industry comprised of bureaucratic behemoths that could not adapt quickly to changing situations.”

Hoerr shows us, too, the “tuxedo unionism” of the United Steelworkers, whose rank-and-file aspired to--and achieved--a middle-class way of life. With the sensibilities of a novelist, Hoerr is able to symbolize a complex economic phenomenon by focusing on the specifics of a steelworker’s life--the contrast between softball and golf becomes a metaphor for upward mobility: “In the 1930s and 1940s, the mill towns were dotted with softball fields,” he writes. By the 1950s, however, “a younger generation of steelworkers, driving Chevies and Dodges, began finding their way out to the new public golf courses. . . . By the 1970s, golf had become a sort of national steelworkers’ sport.”

A State of Crisis

By the 1980s, when the traditional American steel industry was in a state of crisis, the conflicting expectations of labor and management helped to choke off an 11th-hour effort at reform. Innovative labor-management strategies, such as the Japanese-inspired “Labor-Management Participation Teams,” came much too late--and were received with deep distrust and outright hostility by both labor and management. “We’re living with 40-year-old union practices and 40-year-old management practices,” one union leader told Hoerr. “The alienation runs clear from the top all the way down.”

As the plight of the steel industry demonstrates, the corporate giants of America have been unable to cope with competition from abroad and decline in demand for their product--and Hoerr’s important book helps us to understand why. “There is one more reason for the American industry’s decline: the inability of the industrial relations system to adapt, soon enough, to changing economic conditions,” Hoerr concludes. “More than any other factor, this one results from a human failure of tragic proportions, a failure to unite people in a common endeavor.”