The day Bethlehem Steel went bankrupt: I never thought it would really happen – lehighvalleylive.com

Posted: October 11, 2021 at 10:08 am

It cant be overstated: Bethlehem Steel was Bethlehem. And when the industry titan declared bankruptcy 20 years ago this week, it was a death knell. Steelmaking here had already stopped and the company was selling off property to keep itself afloat. Some hoped government intervention and negotiations with labor unions could stave off the inevitable, but it was too late: Steel would close for good two years later.

Here is how The Express-Times reported the Bethlehem Steel bankruptcy on Oct. 16, 2001.

Bethlehem Steel Corp., the giant that put this city on the map, filed for bankruptcy protection Monday.

At 3 a.m., Steels board members voted unanimously to seek Chapter 11 reorganization after hours of meetings in New York City.

By 9 a.m., Bethlehem Steel attorneys filed the documents with the U.S. Bankruptcy Court in Manhattan, listing $4.2 billion in assets and $4.5 billion in debt.

Robert Steve Miller, Steels president and chief executive officer, said the decision comes with enough loans to keep the company afloat while it makes some tough cutbacks.

When I came here, I was reasonably confident we would not need to go there, Miller said of the bankruptcy filing. But since Sept. 11, the economy has gone into a freefall every day, it was clear that the business outlook was more bleak than I thought.

Miller has been at the helm of the company for only 21 days.

The company, which has lost money five quarters in a row, has 13,000 employees and 74,000 pensioners. On Monday, Steel reported a third-quarter loss of $152 million, or $1.25 per share.

In its heyday, Bethlehem steelworkers built landmarks like the Golden Gate Bridge and Rockefeller Plaza. During World War II, it employed 300,000 people as the countrys largest shipbuilder.

The rusting blast furnaces of Bethlehem Steel are barely visible through the fog one January day in 2005, four years after the company declared bankruptcy and two years after the company folded for good.Bill Adams | lehighvalleylive.com file photo

Now, more than 20 U.S. steel companies have sought bankruptcy protection since 1998, when financial crises in Asia and Russia caused foreign producers to flood the U.S. with inexpensive steel.

Miller, a turnaround specialist who made his name with the 1980s Chrysler bailout, joined the company Sept. 24, replacing Duane Dunham.

The company has announced plans to sell its South Buffalo Railway business in Lackawanna, N.Y., a 70 percent interest in an iron-ore mine in Minnesota and a 5 percent stake in a mine in Brazil. It also plans to eliminate 340 jobs by closing a coal-processing plant in New York to reduce expenses.

This fall, Steel was struggling to line up $750 million in loans. This weekend, the troubled company lined up $450 million in loans from GE Capital as a debtor in possession.

The $750 million was like a refinancing of your home mortgage, while the $450 is more in the form of a second mortgage, Miller said in a noon teleconference.

He said Steels recovery rides on three legs labor, government, and merger or acquisition.

[United Steelworkers of America] President Leo Gerard said 130,000 retired workers and dependents are put at risk by the Bethlehem filing.

It doesnt take a rocket scientist to figure out that if Washington [D.C.] doesnt take action now, an industry crucial to Americas security will be bled to death, Gerard said in a statement.

Local union and pension officials said Monday they had not received word about changes facing 11,000 Lehigh Valley steelworker retirees.

The fallout from Steels bankruptcy filing isnt limited to Steel. Lehigh Heavy Forge laid off an undisclosed number of employees effective noon Monday, [Jerry Green, president of the tri-local union] said.

Bethlehem Steel provides the raw materials for the South Bethlehem company and is a major buyer for its products.

People who heard the news about Bethlehem Steel used one word sad.

Bruce Davis, attorney for the Bethlehem Steel Retired Employees Benefits Coalition, said This is about as sad a day as I can remember for a very proud company.

Author and former Globe-Times editor John Strohmeyer said he got an early morning phone call from his daughter.

Hes now [at the time of original publication] author in residence at the University of Alaska in Anchorage.

My first reaction was, I could see it coming, but I never thought it would really happen, Strohmeyer said.

Strohmeyer, a Pulitzer Prize-winner, authored Crisis in Bethlehem, a book that traces Steel in the mid-20th century.

The theme? Steel was relying too heavily on government to bail it out, the author said. It was time for management and labor to tango. If they were going to rescue it, it had to be a joint rescue operation. I dont think it ever occurred.

Then, he added, Its sad. Its very sad.

Diana DeMuth opens for Phillip Phillips at Musikfest 2021. Bethlehem Steel is no more, but relics like the blast furnaces now provide a dramatic backdrop for a vibrant arts and cultural center.Saed Hindash | For lehighvalleylive.com

10 YEARS AGO | Oct. 10, 2011: The 110-year-old Blue Fox Hotel burns down in Whitehall Township, killing one person and displacing nine others, some of whom reportedly jumped from second- and third-story windows.

50 YEARS AGO | Oct. 14, 1971: Early returns on an Easton Express reader poll show readers 2-to-1 against the Tocks Island Dam project. The controversial project seeks to dam the Delaware River just north of the Delaware Water Gap, and the Express pledges to send final results of its poll to a presidential council set to decide on the project by Nov. 4.

This story is part of Lehigh Valley Then, a weekly series that recalls historical headlines from lehighvalleylive.com affiliate The Express-Times and its predecessors from 10, 20, 25, 50 and 100 years ago. Stories are pulled from microfilm at the Easton and Bethlehem area public libraries. Excerpts from the original text are edited for clarity and length.

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Steve Novak may be reached at snovak@lehighvalleylive.com.

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The day Bethlehem Steel went bankrupt: I never thought it would really happen - lehighvalleylive.com

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