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A D V A N C E D M A T E R I A L S & P R O C E S S E S | J A N U A R Y 2 0 1 7
3 4
METALLURGY LANE
THE DECLINE OF THE INTEGRATED STEEL INDUSTRY—PART II
THE U.S. STEEL INDUSTRY BEGAN ITS STEADY DECLINE IN THE LATE 1950s, A DEVASTATION OF EPIC PROPORTIONS
THAT CONTINUED THROUGHOUT THE 1980s AND BEYOND.
D
uring the recession of 1982, total
steel production fell from 120
million tons to just 75 million
in the span of one year, and imports
accounted for 25% of the market for
the first time. United States Steel Corp.
(USS) operated at 36% of capacity and
Bethlehem Steel lost $1.5 billion, with
$900 million of that stemming from
the cost of closing most of Lackawa-
nna. Bethlehem finally closed the open
hearth shop at Sparrows Point, Md.,
which they had built in 1958 as their
hope for the future, a shop that had
been obsolete for 20 years.
Between 1982 and 1987, Beth-
lehem lost another billion and cut its
workforce in half, yet invested $2 billion
in capital expenditures. In 1986, the
company reduced staff at the research
laboratory and sold five of its eight lab
buildings to Lehigh University. A few
years later, Bethlehem sold the remain-
ing buildings to Lehigh, ending the
grand attempt to restore the company
through basic research results. Over
time, the company also reduced staff
at Martin Tower until the building was
vacant by 2007. Today it is empty and
contaminated with asbestos. By the
end of the 1980s, Bethlehem found that
it was hard to break the old culture with
a board comprised of inside executives
who continued to authorize projects
that did not help restore profitability. By
spreading new investments over many
plants—most too inefficient to make
a difference—instead of concentrating
on the more modern Burns Harbor and
Sparrows Point facilities, most of these
efforts were wasted.
DEVASTATION INPITTSBURGH
The 1980s hit the Monongahela
River Valley near Pittsburgh especially
hard. USS closed steelmaking at its
Clairton Works in 1984, leaving only the
cokemakingoperations functional. That
same year, USS also closed Duquesne
Works. In 1986, it closed Homestead
Works and sold Christy Park Works. In
1983, the company’s Monroe Research
Center had 3500 workers, but by 1991
head count was reduced to 500 and the
facility later closed. The only remaining
USS plants in Pittsburgh were the Edgar
Thompson Works, the finishing plant
at Irvin, and coke making at Clairton.
In addition, plants owned by J&L were
closed in 1985. Thus, Pittsburgh—the
heart of the integrated steel industry for
100 years—was now a minor player in
domestic steelmaking.
To offset the decline in steelmak-
ing, USS bought Marathon Oil Co. in
1982. The company added to its oil
holdings a few years later, purchas-
ing Texas Oil and Gas Corp. In 1986,
it renamed the parent company USX
with USS as a subsidiary. These moves
garnered a lot of criticism within the
union and broader business world for
using funds that could have gone into
steel investments. However, Marathon
Oil and Texas Oil and Gas earned profits
over the next 20 years that supported
the steel operations and provided funds
to upgrade and purchase more efficient
plants from bankrupt companies. USX
divested its oil holdings in 2001 and
changed its name back to USS.
OTHER WIDESPREAD
CLOSURES
Republic Steel, the next casualty
of the steel decline, was sold to LTV in
1984. LTV now owned three of the top
“little steel” companies in the country
whose history went back to 1900. With
this heavy investment in companies in
distress and no knowledge of the steel
industry, LTV went bankrupt in 1986.
After recovering from this bankruptcy,
it went bankrupt several more times,
finally closing all facilities in early 2000.
Remaining assets were bought by Wil-
bur Ross, a fund manager who special-
ized in buying companies at bargain
prices and attempting to revive them
for resale. The devastation was espe-
cially damaging to Youngstown, Ohio.
Quoting from UrbanOhio.com, “But it
Demolition of three blast furnaces at
the Ohio Works in Youngstown in 1984.
Courtesy of urbanohio.com.
“BUT IT WAS THE WILL OF
MEN WHO CREATED YOU,
YOUNGSTOWN, AND IT WAS THE
WILL OF MEN WHO DESTROYED
YOU. IN YOUNGSTOWN, WE
MADE STEEL. AND YOU DIED
TOO SOON.”