Bethelhem Steel was at one one of if not the largest steel companies in the world. Their Sparrow Point facility in Baltimore was also for years the single largest Steel Plant in the entire world. It had a variety of sectors including not just steel production but also things like manufacturing steel products and ship buildingBut after WW2 they gradually began collapsing as they lost profitability thanks to corporate mismanagement and increased foreign competition. The Sparrow Point facility also gradually declined until it was abandoned and year's later demolished with the intent of using the land it had covered for gentrified mix used purposes. So my concept is how do you save Bethelhem steel from decline. How can you manage to save it's status as one of the biggest and most profitable steel companies in the world. Moreso is it possible for it to remain the largest steel producer in the world. And more importantly how can you save the Sparrow point facility? How can Sparrow point remain the worlds largest steel plant/production facility or regain that title? How can you have the Sparrow point facility continue to this day to stay as an utterly massive industrial compound producing not just steel but things like naval and merchant ships? Is it impossible?
How can you save Bethelhem Steel and Sparrow Point
- Thread starter Father Maryland
- Start date
FDR passes national healthcare and a stronger set of pension laws for corporations. Perhaps he doesn’t court pack, perhaps he calls the AMA bluff in ‘35, whatever.
As such instead of massive growing obligations in health and pensions corporations just adjust their taxes to auto pay pension/health money into the government fund where it can’t be looted, where it must be paid instead of stolen like it so often is.
This allows Bethlehem Steel, several decades later, to have breathing room for reform as (IIRC) it was mostly their unfunded pension obligations that anchored them. Now of course you still need some good c level staff to pull off the major reform that’ll be required to compete globally—but hopefully that’s minor butterflies (I don’t know their corporate history).
As such instead of massive growing obligations in health and pensions corporations just adjust their taxes to auto pay pension/health money into the government fund where it can’t be looted, where it must be paid instead of stolen like it so often is.
This allows Bethlehem Steel, several decades later, to have breathing room for reform as (IIRC) it was mostly their unfunded pension obligations that anchored them. Now of course you still need some good c level staff to pull off the major reform that’ll be required to compete globally—but hopefully that’s minor butterflies (I don’t know their corporate history).
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I remember, as a kid, driving by the then new basic oxygen furnace on the Southside of Bethlehem and I recall the talk of how revolutionary it was. This was in the mid to late 60s. Unfortunately, by then, everyone else had converted to this type of process. Bethlehem steel was late to the dance and it cost them.
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Even if Bethlehem as a whole isn't salvageable is their anyway to save/reform Sparrow Point? Even if it's essentially a "Tear it down and build a new steel plant in it's place".
GeographyDude
Gone Fishin'
404 Error - Worthington Enterprises
The United States still has some steel industry even today in 2021, just by % not as big a part of our economy as it used to be.
404 Error - Worthington Enterprises
worthingtonindustries.com
The United States still has some steel industry even today in 2021, just by % not as big a part of our economy as it used to be.
We do but it's much smaller and from what I understand it's survival is largely a result of the US/state governments requiring steel made in the US be used for things like building and infrastructure construction and the manufacturing of things like armored vehicles and ships for the US Military.
Sort of like how the US Merchant Marine continues to survive pretty much entirely because of it's necessity for the US military.
Why would you build your new steel plant on a geographically constrained site with a massive pollution legacy whose original location was determined by the economic geography of the 19th century. You're much better off building your new plant in a greenfield site that makes sense in the late 20th century. Which is why almost all the surviving US steel plants are in different places from the 19th century ones.
Fair. Any places in or near Baltimore (or at least in Maryland) that would make sense for such a project.
I suppose the best Sparrow point could hope for would be for certain areas to stay in some sort of limited role producing niche products.
That or have the military buy/eminent domain the site and use it for training in urban settings.
"Still has some" really undersells it. The US produces about as much Steel today as it did in World War Two, or 2/3 of its "golden age" in the postwar world.
Suppose same problem as every other bit of manufacturing in the US
A) Decline of unions mean wages are lower
B) Instead of "outsourcing" abroad companies move facilities from the high tax and high land cost North/Midwest to more anti union cheaper states like in the south.
C) Automation meaning the same facility can produce as much steel as a similar facility say fifty years ago but with like 10%-15% of the workforce.
One reason for it is the Merchant Marine Act of 1920, AKA the Jones Act. It requires that goods being transported between US ports be carried by ships built in the US, registered in the US, that are owned by American citizens, and crewed by US citizens.
GeographyDude
Gone Fishin'
Now, we’ve grown as a population, and we’ve become richer. So if we look at it as % of the overall economy, maybe it’s only 1/2 of what it was during the “golden age” ?
mial42
Gone Fishin'
It's much less than that. US GDP in 2019 was much, much higher than US GDP in the 1950s:
US GDP in 1956 was 2.9 trillion as compared to 19 trillion in 2019 (real; the above graph is nominal which makes the gap seem bigger, but even so this is more than a sixfold increase). US steel production is much lower then in 50s in terms of both total output, and even more importantly in terms of employment, which matters more for the total portion of the economy represented by the sector.
mial42
Gone Fishin'
Yes, hence "real" GDP. Accounting for inflation gets you a much bigger change, as seen in the graph ($0.449 trillion in 1956 to $21.433 trillion in 2019, a ~48 fold increase).
They would have to have better management, as it seems management in the US in general declined after WWII. This was particularly the case in areas like statistical methods to improve productivity, and making major investments (including those in its workforce) to remain competitive at the cost of short-term profits.
This really hits home because I grew up in Sparrows Point (lived there from birth in 1952 until 1972). I say the decline started with the 1959 steel strike: mitigate it somehow (e.g., Ike determines steel is vital to defense and intervenes/appoints a mediation panel) or avoid it altogether and the Point (and Bethlehem Steel) survive longer, sufficient oh enough to (finally!) implement modernization measures.