Book Review
Bethlehem Steel: Builder and Arsenal of America
By Kenneth Warren. Pittsburgh, PA: University of Pittsburgh Press, 2008; 322 pp., softcover, $24.95.
Geographer and historian Kenneth Warren adds to his sizeable body of works on the business of iron and steel in the United States and Britain with this corporate history of a company that, at its peak, was the second-largest steel manufacturer in the United States. His book is the best scholarly study yet written of Bethlehem Steel. He provides a cautionary story of how a company once thought to be too big to fail can fail, using a chronological case study of Bethlehem Steel's growth and decline.
This work serves as a foundation for future histories of the company that incorporate the perspectives of labor, outside communities, and management. Warren succeeds in writing a corporate history akin to his Big Steel: The First Century of the United States Steel Corporation 1901-2001 (University of Pittsburgh Press, 2001). The inside-the-executive-suite nature of his work is not a labor history. He includes labor's story only as it affected Bethlehem Steel's corporate operations. His cleaving apart of corporate operations and labor, two closely entwined entities, leaves the study both passive and incomplete. His earlier U.S. Steel history benefited from that company's voluminous archives. In this study, however, Warren is hampered by the "frustratingly incomplete" nature of the extant Bethlehem Steel archives. Warren relies heavily on the minutes of the company's board of directors and finds many entries lacking, simply noting that officers discussed "various subjects relating to the business and affairs of the Corporation." He supplements these records with trade journals, finding them more useful in examining the early history of the company, and with interviews of former corporate executives. Unfortunately, Warren neglects other potentially valuable sources. References to perspectives in the Wall Street Journal, Allentown Morning Call, Bethlehem Globe, and the press of the many other cities connected with the company's history are not included in his endnotes (p. xi, xii).
Even so, Warren provides a thorough history of Bethlehem Steel. He traces its history from the emergence of the iron industry in the Lehigh Valley in the 1850s and the firm's early days as Bethlehem Iron to its acquisition by Charles Schwab in 1903 and its subsequent 1904 incorporation as Bethlehem Steel. His narrative includes the successful presidency and chairmanship of Eugene Grace (1916-45 and 1945-57) and the company's bankruptcy and purchase by the International Steel Group in 2003. His examination of the company's growth during the Schwab and Grace years is especially poignant, given its ultimate fate.
Bethlehem Steel was a small company known for its armor when Schwab acquired it, with revenues of $16.1 million in 1905 and 1906 (against revenues of $446.6 million for Pittsburgh's U.S. Steel). When Grace stepped down in 1957, Bethlehem Steel was the nation's leading shipbuilder and second-largest steel producer with $2.6 billion in revenues (against U.S. Steel's $4.4 billion) and a component of the Dow Jones Industrial Average. However, a multitude of issues connected with labor and government, as well as changes in the domestic demand for steel, led to decline.
Some of these issues demand further study. The company, which had some of the highest-compensated executives in the United States, maintained extremely poor relations with its workers, represented by the United Steelworkers of America (USWA). A 1959 industry-wide strike led to the first significant imports of foreign steel, which, over the next decades, became less expensive than domestic production. Even though the book is not a labor history, more attention to labor relations and use of corporate communications in the USWA archives would have provided readers a more comprehensive understanding of how the corporation's dealings with its workers affected its survival.
Warren gives very little attention to the rise of the environmental movement and to increased federal and state regulation of the environment, save to note that increased regulation increased Steel's costs. During the second half of the 20th century, the U.S. government's relationship with Bethlehem Steel became more nuanced through environmental regulation (and through its support of the Marshall Plan and the rebuilding of the European steel industry, which became a major competitor of Bethlehem Steel). The archives of the National Park Service, Environmental Protection Agency, or the Labor Department might provide additional depth to Warren's examination of the corporation's relationship to government, especially as it pertains to the effects of Steel's Burns Harbor plant on the development of Indiana Dunes National Lakeshore.(1)
The author does an excellent job of examining the rise of the mini-mill and its effects on traditional steel makers and of how geography affected Bethlehem Steel's operations. Steel sourced its iron ore internationally, and the steel produced at its Sparrows Point plant near Baltimore was less expensive for Pacific coast buyers than steel produced by U.S. Steel in the Monongahela Valley due to the ease of shipping by water through the Panama Canal. However, in a rather inexplicable omission, his book suffers by having no maps. Given the range of locations discussed in the text, from the Lehigh Valley to Cuba, Chile, and Venezuela, maps would seem an essential inclusion.
Warren's prose is dense and would have benefited from better editing and a glossary of steel-related vocabulary; his book is not an easy read for non-specialists. Even so, it is essential reading for anyone studying the 20th-century U.S. steel industry. It is also an important source for those researching and interpreting the histories of the communities that were home to Bethlehem Steel's major factories, especially Bethlehem and Johnstown, Pennsylvania; Lackawanna, New York; Dundalk, Maryland; and Burns Harbor, Indiana, and for those interested in the effects of globalization on U.S. industry in the late 20th century.
Edward Roach
National Park Service
Note
1. Schwab was president of the company from 1904 to 1916 and chairman from 1916 to 1939 and the subject of a 2007 biography by Warren.