Bethlehem Steel

One of the my favorite ways to relax is to wonder the stacks in the library glancing at the books for something that catches my fancy. When I stumbled on Kenneth Warren's Bethlehem Steel I couldn't resist. I earned my PhD at Lehigh University in the shadow of the hulking, defunct Bethlehem Steel mill. It was enormous. The complex stretched for miles. At that point in the 1990s, it operated under very limited capacity. Now, twenty years later I was finally going to read about the company that built this enormous plant with its rust, broken windows, and abandon equipment laying in the yards.

The title really captures the essence of Bethlehem Steel. It started as a small scale iron producer in a region with many. It was among the first to jump to steel an adopt the Bessemer. While lauded for its quality, Bethlehem Steel lagged behind competitors in the midwest that had access to more markets and cheaper ore. The company took off around 1900 when if moved into naval construction, was purchased by Charles Schwab, and secured several large contracts. In the 192os it profited from the building boom stretching across the United States. Like most firms, it suffered immensely during the Great Depression. It did well in World War II and grew significantly in the 1950s through sales and acquisitions. Production peaked in the 1970s and then started the thirty year decline that culminated with Bethlehem Steel's absorption by the International Steel Group in 2003.

Two things really caught my attention. First, the long term effects of recessions. Something that seems minor in historical hindsight, such as the 1982 recession, which is dwarfed by the economic boom of the 1980s, hit Bethlehem Steel really hard and had long term impacts. Second, was the devolution of the 1970s-1990s. A century before, it was all about consolidation of integration, which meant controlling all the lines of production from raw materials to sales of finished product. Yet, one hundred years later, Bethlehem Steel was following the model of Chrysler executive Lee Iacocca and selling off its subsidiaries, sources of raw materials, etc. The circle was coming around.