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Crisis In Bethlehem
Pulitzer Prize winner John Strohmeyer’s account of the collapse of Bethlehem Steel. As editor of the Bethlehem, Pennsylvania, Globe-Times from 1956 to 1984, Strohmeyer followed the steel industry from the height of its power through its decline. He evaluates the self-indulgence of both the unions and industry management and movingly describes the human agony caused by the failure of steel. His account is reinforced by over one hundred interviews with steelworkers, union leaders, steel executives, and industry analysts. First issued in 1986, the book is more significant than ever. In this edition, Strohmeyer includes an update on steel today.
248 pages, Paperback
First published August 16, 1994
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December 13, 2024
The crisis in Bethlehem, Pennsylvania, unfolded slowly; but by the 1980’s, it was only too clear that the Bethlehem Steel Company, long a titan of American industry, was on the verge of collapse. Executives and steelworkers alike were shocked by the realization that not only Bethlehem Steel, but indeed the entire American steel industry, might fail. The story is not a happy one, and John Strohmeyer sets it forth in all its grimness in his 1986 book Crisis in Bethlehem.
Strohmeyer, a long-time editor for Bethlehem’s Globe-Times newspaper, had a thoroughgoing, experience-based knowledge of the way things went at Bethlehem Steel – and he brings all of that hard-won knowledge to his chronicling of Big Steel’s Struggle to Survive (the book’s subtitle). In Strohmeyer’s reading, the decline and fall of Bethlehem Steel was a result of misguided actions by management, labor, and government.
The post-World War II years were the “salad days” of Big Steel, when it seemed as if the world’s demand for American steel products would always be ever-growing and insatiable. Vast integrated steel mills employed thousands in Pennsylvania cities like Bethlehem, Homestead, and Johnstown, and in other cities across the American Rust Belt. As late as 1974, “the steel industry appeared safe and well. The big mills were in the midst of a record profit-making year and employment was at its fullest” (p. 98).
Bethlehem Steel, pulling in annual profits of hundreds of millions of dollars, rewarded its executives with exceptionally lavish salaries, bonuses, and benefits – in return for conforming to company social norms as strict as anything that one might have seen in the late Roman Empire. The steelworkers meanwhile enjoyed regular salary and benefit increases of their own, along with the sense of tested-and-proven manhood that they gained from performing the tough, skill-oriented, dangerous tasks of working the steel. When government was forced to step in and mediate during disputed between labor and management, the usual result was that the workers’ already generous benefits were made at least somewhat more generous.
But in Strohmeyer’s reading, that inflexibility in the culture of Bethlehem Steel meant that “Company attitudes…changed only when it was forced to reappraise old policies. Initiative was largely lacking” (p. 52). Perhaps, then, it is no surprise that no one at Bethlehem Steel seemed to know what to do when, just two years after posting record earnings of $342 million in 1974, “the steel industry’s rosy world turned suddenly gray” (p. 100).
The 1970’s, after all, were a decade of change: European and Japanese steel producers, relatively limited for decades because of the devastation of the Second World War, finally emerged into their own – with newer steel-making technologies that some American companies like Bethlehem had chosen to forgo. Meanwhile, in some parts of the developing world, governments were providing generous subsidies for the development of new steel-making facilities, in places where labor costs were so low that American companies could not possibly produce steel as cheaply.
And some American steel producers, abandoning the model of the vast integrated-steel complex that employs thousands and handles every step of the steel-making process, moved toward smaller, more specialized mills with more modest production costs, including innovations such as non-union labor, employee ownership, and profit-sharing – changes that would have seemed anathema to old-line labor leaders and tradition-minded management alike.
The result was that, just three years after reporting those record profits of $342 million in 1974, “Bethlehem reported a net loss of $488.2 million for 1977. The report jarred the industrial and financial world and sent tremors into every steel community” (p. 129). Thousands of employees lost their jobs – 3,800 at Johnstown, Pennsylvania; 3,500 at Lackawanna, New York; 2,500 of the company’s white-collar workers across the country.
A relative outsider was named chairman and CEO of Bethlehem Steel in 1980, with the task of stopping the financial losses that were bleeding Bethlehem Steel to death. In practice, his attempt at implementing that task meant cutting more jobs, from top executives down to the lowest-paid labourers in the steel mills. The steel towns became locales of psychological trauma, as people who had given their lives to steel found themselves jobless, and without skills that could easily be applied to other areas of endeavour.
Morale suffered company-wide, but Bethlehem Steel’s losses continued to mount. Executives accepted major cuts in salary, bonuses, and benefits, while the unions offered concessions that would have seemed unthinkable just a couple of decades before; and in 1986, Strohmeyer was able to write optimistically that “Bethlehem Steel has been kept alive…on the joint sacrifices of its concerned people” (p. 204).
Yet by 1994, when Strohmeyer wrote a new preface for the University of Pittsburgh Press edition of Crisis in Bethlehem that I have before me, the picture was bleaker. Strohmeyer’s newspaper, the Bethlehem Globe-Times, had closed down and merged with another paper from nearby Easton in 1991. The company’s historic Johnstown plant had closed in 1992. And it had been announced that the great blast furnace on the south bank of the Lehigh River would be shutting down in 1995. Strohmeyer wrote at the time that downtown Bethlehem’s “once-booming steelmaking complex is destined to become a museum, complete with guides to show how men of brawn and brains once made the mighty beams that support the structures which grace American skylines” (p. xii).
Strohmeyer was even more prophetic than he knew. The Bethlehem Steel Company, so long a mainstay of American industry, went out of existence in 2003. The mighty blast furnace south of the Lehigh River now serves as a colorfully illuminated, post-industrial backdrop for Musikfest, a summertime rock music festival. Around the blast furnace, other former Bethlehem Steel buildings have been turned into restaurants or health clubs. Modern Bethlehem works diligently to reinvent itself as a tourist destination, touting its historic Bethlehem Hotel, the Musikfest, a wintertime Kristkindlmarkt (German-style Christmas market), and some tony shops along Main Street; and Bethlehem’s college-town status as home to Lehigh University and Moravian College unquestionably helps.
I first found Crisis in Bethlehem on a visit to the city, while walking around the Moravian Bookshop (the country’s oldest, since 1745). Returning years later, for a holiday-time visit to the Kristkindlmarkt, I was impressed with the optimistic and forward-moving spirit that I saw in the Bethlehem, Pennsylvania, of today. But whenever I looked southward across the Lehigh, and saw the evidence of Bethlehem’s past industrial greatness, I tried to imagine the wrenching emotions that longtime Bethlehem residents must have felt as they watched Bethlehem’s industrial era come to an end. Strohmeyer’s Crisis in Bethlehem captures that time of change well.
Strohmeyer, a long-time editor for Bethlehem’s Globe-Times newspaper, had a thoroughgoing, experience-based knowledge of the way things went at Bethlehem Steel – and he brings all of that hard-won knowledge to his chronicling of Big Steel’s Struggle to Survive (the book’s subtitle). In Strohmeyer’s reading, the decline and fall of Bethlehem Steel was a result of misguided actions by management, labor, and government.
The post-World War II years were the “salad days” of Big Steel, when it seemed as if the world’s demand for American steel products would always be ever-growing and insatiable. Vast integrated steel mills employed thousands in Pennsylvania cities like Bethlehem, Homestead, and Johnstown, and in other cities across the American Rust Belt. As late as 1974, “the steel industry appeared safe and well. The big mills were in the midst of a record profit-making year and employment was at its fullest” (p. 98).
Bethlehem Steel, pulling in annual profits of hundreds of millions of dollars, rewarded its executives with exceptionally lavish salaries, bonuses, and benefits – in return for conforming to company social norms as strict as anything that one might have seen in the late Roman Empire. The steelworkers meanwhile enjoyed regular salary and benefit increases of their own, along with the sense of tested-and-proven manhood that they gained from performing the tough, skill-oriented, dangerous tasks of working the steel. When government was forced to step in and mediate during disputed between labor and management, the usual result was that the workers’ already generous benefits were made at least somewhat more generous.
But in Strohmeyer’s reading, that inflexibility in the culture of Bethlehem Steel meant that “Company attitudes…changed only when it was forced to reappraise old policies. Initiative was largely lacking” (p. 52). Perhaps, then, it is no surprise that no one at Bethlehem Steel seemed to know what to do when, just two years after posting record earnings of $342 million in 1974, “the steel industry’s rosy world turned suddenly gray” (p. 100).
The 1970’s, after all, were a decade of change: European and Japanese steel producers, relatively limited for decades because of the devastation of the Second World War, finally emerged into their own – with newer steel-making technologies that some American companies like Bethlehem had chosen to forgo. Meanwhile, in some parts of the developing world, governments were providing generous subsidies for the development of new steel-making facilities, in places where labor costs were so low that American companies could not possibly produce steel as cheaply.
And some American steel producers, abandoning the model of the vast integrated-steel complex that employs thousands and handles every step of the steel-making process, moved toward smaller, more specialized mills with more modest production costs, including innovations such as non-union labor, employee ownership, and profit-sharing – changes that would have seemed anathema to old-line labor leaders and tradition-minded management alike.
The result was that, just three years after reporting those record profits of $342 million in 1974, “Bethlehem reported a net loss of $488.2 million for 1977. The report jarred the industrial and financial world and sent tremors into every steel community” (p. 129). Thousands of employees lost their jobs – 3,800 at Johnstown, Pennsylvania; 3,500 at Lackawanna, New York; 2,500 of the company’s white-collar workers across the country.
A relative outsider was named chairman and CEO of Bethlehem Steel in 1980, with the task of stopping the financial losses that were bleeding Bethlehem Steel to death. In practice, his attempt at implementing that task meant cutting more jobs, from top executives down to the lowest-paid labourers in the steel mills. The steel towns became locales of psychological trauma, as people who had given their lives to steel found themselves jobless, and without skills that could easily be applied to other areas of endeavour.
Morale suffered company-wide, but Bethlehem Steel’s losses continued to mount. Executives accepted major cuts in salary, bonuses, and benefits, while the unions offered concessions that would have seemed unthinkable just a couple of decades before; and in 1986, Strohmeyer was able to write optimistically that “Bethlehem Steel has been kept alive…on the joint sacrifices of its concerned people” (p. 204).
Yet by 1994, when Strohmeyer wrote a new preface for the University of Pittsburgh Press edition of Crisis in Bethlehem that I have before me, the picture was bleaker. Strohmeyer’s newspaper, the Bethlehem Globe-Times, had closed down and merged with another paper from nearby Easton in 1991. The company’s historic Johnstown plant had closed in 1992. And it had been announced that the great blast furnace on the south bank of the Lehigh River would be shutting down in 1995. Strohmeyer wrote at the time that downtown Bethlehem’s “once-booming steelmaking complex is destined to become a museum, complete with guides to show how men of brawn and brains once made the mighty beams that support the structures which grace American skylines” (p. xii).
Strohmeyer was even more prophetic than he knew. The Bethlehem Steel Company, so long a mainstay of American industry, went out of existence in 2003. The mighty blast furnace south of the Lehigh River now serves as a colorfully illuminated, post-industrial backdrop for Musikfest, a summertime rock music festival. Around the blast furnace, other former Bethlehem Steel buildings have been turned into restaurants or health clubs. Modern Bethlehem works diligently to reinvent itself as a tourist destination, touting its historic Bethlehem Hotel, the Musikfest, a wintertime Kristkindlmarkt (German-style Christmas market), and some tony shops along Main Street; and Bethlehem’s college-town status as home to Lehigh University and Moravian College unquestionably helps.
I first found Crisis in Bethlehem on a visit to the city, while walking around the Moravian Bookshop (the country’s oldest, since 1745). Returning years later, for a holiday-time visit to the Kristkindlmarkt, I was impressed with the optimistic and forward-moving spirit that I saw in the Bethlehem, Pennsylvania, of today. But whenever I looked southward across the Lehigh, and saw the evidence of Bethlehem’s past industrial greatness, I tried to imagine the wrenching emotions that longtime Bethlehem residents must have felt as they watched Bethlehem’s industrial era come to an end. Strohmeyer’s Crisis in Bethlehem captures that time of change well.
April 22, 2017
A comprehensive look at how an industrial giant went out of business because of insular management and extreme obstinence from both labor and management. I thought it was covered fairly on both sides.
I lived in Bethlehem into my early twenties but all I knew about The Steel was the dilapidated buildings and that my grandfather used to work there as well as most people's grandfathers and great-grandfathers.
I wasn't born yet or was in preschool for most of the events. I wish I could have read this book 20 years ago to get a better perspective of my hometown.
One of the better business books I've read, especially when it comes to management/labor relations. I would also say it's a must-read for anyone from the Lehigh Valley.
I lived in Bethlehem into my early twenties but all I knew about The Steel was the dilapidated buildings and that my grandfather used to work there as well as most people's grandfathers and great-grandfathers.
I wasn't born yet or was in preschool for most of the events. I wish I could have read this book 20 years ago to get a better perspective of my hometown.
One of the better business books I've read, especially when it comes to management/labor relations. I would also say it's a must-read for anyone from the Lehigh Valley.
April 17, 2024
This book is a history of Bethlehem Steel and, in particular, of the company's decline in the 70s and 80s. The author was editor of the Bethlehem Globe-Times, the local newspaper in Bethlehem, where the company was headquartered. A friend lent me this book. His father was an executive at Bethlehem Steel, and gets a brief mention in this book.
The story is wonderfully constructed and clearly told. I'm very sad about the decline of local newspapers, and this book reminded me why I feel that way. Strohmeyer is a real journalism pro, and was perfectly positioned -since he was on the spot for most the company's late history - to write this first pass at history.
Strohmeyer starts by taking the reader back to the labor strife of the 1930s, when Bethlehem was a young company. We learn why the steelworkers fought so hard to unionize. In a later chapter, the author describes in detail some of the hard, dangerous work that happens in a steel mill. So we begin with an understanding of why the unions were so tragically unwilling, later, to make concessions that might have helped save the industry.
But the unions weren't completely to blame. There's plenty of blame to go around. Strohmeyer takes us through the featherbedding at the management level, too: country club memberships, cushy jobs that never extended beyond nine to five, and often involved doing nothing but read the newspaper for the first hour of the work day. The white collar work force grew and grew. Nobody was ever fired, and managers tended to build little empires.
The government comes in for criticism also. Local governments in some steel towns gouged the steel companies for taxes, while keeping personal property and income taxes low and getting lazier and lazier about budget control. The federal government enforced crippling environmental and fair-hiring rules and fines at the worst possible moment, when the industry was starting to decline.
Strohmeyer describes the many mistakes of management, as well as some of the brave efforts at reform. The book was written in 1986, when it seemed there might still be hope for Bethlehem Steel, and when the worker-owned model at Weirton Steel looked promising. Now, we know how those stories end. Bethlehem has been defunct for years, and Weirton recently announced the closing of its last plant in Cleveland Cliffs.
I'm a steel town girl, with steel industry ancestors. I lived the final years of this story, watching neighbors' livings melt away and waving goodbye to high school classmates who left Pittsburgh for better job opportunities in the Sun Belt. So, this book told a story that was already familiar to me, but it gave an excellent background and summary, holding my interest by combining facts and figures with human stories.
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Author of The Saint's Mistress
The story is wonderfully constructed and clearly told. I'm very sad about the decline of local newspapers, and this book reminded me why I feel that way. Strohmeyer is a real journalism pro, and was perfectly positioned -since he was on the spot for most the company's late history - to write this first pass at history.
Strohmeyer starts by taking the reader back to the labor strife of the 1930s, when Bethlehem was a young company. We learn why the steelworkers fought so hard to unionize. In a later chapter, the author describes in detail some of the hard, dangerous work that happens in a steel mill. So we begin with an understanding of why the unions were so tragically unwilling, later, to make concessions that might have helped save the industry.
But the unions weren't completely to blame. There's plenty of blame to go around. Strohmeyer takes us through the featherbedding at the management level, too: country club memberships, cushy jobs that never extended beyond nine to five, and often involved doing nothing but read the newspaper for the first hour of the work day. The white collar work force grew and grew. Nobody was ever fired, and managers tended to build little empires.
The government comes in for criticism also. Local governments in some steel towns gouged the steel companies for taxes, while keeping personal property and income taxes low and getting lazier and lazier about budget control. The federal government enforced crippling environmental and fair-hiring rules and fines at the worst possible moment, when the industry was starting to decline.
Strohmeyer describes the many mistakes of management, as well as some of the brave efforts at reform. The book was written in 1986, when it seemed there might still be hope for Bethlehem Steel, and when the worker-owned model at Weirton Steel looked promising. Now, we know how those stories end. Bethlehem has been defunct for years, and Weirton recently announced the closing of its last plant in Cleveland Cliffs.
I'm a steel town girl, with steel industry ancestors. I lived the final years of this story, watching neighbors' livings melt away and waving goodbye to high school classmates who left Pittsburgh for better job opportunities in the Sun Belt. So, this book told a story that was already familiar to me, but it gave an excellent background and summary, holding my interest by combining facts and figures with human stories.
Like my reviews? Check out my blog
Author of The Saint's Mistress
January 5, 2017
Excellent coverage of the evolution of the crisis in the Steel Industry. Fair representation of both labor and management.
May 28, 2015
Crisis in Bethlehem is about the downfall of the 2nd largest steel producer in the U.S., the one and only Bethlehem Steel. I have a lot of family members who worked at The Steel including both of my grandfathers and my great-grandfather, along with countless others. Unfortunately I was sort of disappointed with this book. Although nothing in this book was inaccurate, I felt that it was not written from the right perspective. John Stroymeyer is an outstanding writer – don’t get me wrong. It’s just that he highlights all the negatives about The Steel and its’ corruption. He disregards much of the greatness that Bethlehem Steel brought to the U.S. and the world. It focuses majorly on the blue collar workers before the union came into play. The conditions were harsh, there was corruption, and it was hard work. Making steel is rough and dangerous! What I think people need to remember while reading this book is that Bethlehem Steel employed thousands of people, educated and not. During some of the toughest times in our country’s history such as The Great Depression, Bethlehem Steel was constantly hiring people who needed to support their families. During wartime Bethlehem Steel was a major supplier of ships, ammunition, and barrels. I do recommend this book though, despite what I have said about it. The only other thing I have to say about it is that I recommend finding other sources of information as well. Talk to former Bethlehem Steel workers and their families, read more about the steel industry, heck! Just look at some of the most prominent pieces of architecture across the country. The American steel industry is such a huge part of American history, which I feel is sometimes overlooked as being this terrible thing. Steel is something that is needed, it doesn’t make itself. This book definitely illustrates the lives of some of the overlooked heroes in America.
March 12, 2011
Very interesting book. The author does a good job in showing how both management and the union played equal parts in the downfall of Bethlehem Steel. Compare this story to the book "Plain Talk" by Ken Iverson about Nucor mini-mill operations
May 16, 2008
Got this for my father, and ended up reading it myself.
Very interesting look at how a major player of the Industrial Age came to an ugly end.
Wonderful photographs.
Very interesting look at how a major player of the Industrial Age came to an ugly end.
Wonderful photographs.
April 7, 2023
A cultural context-setter as I prepare to move to the Bethlehem area. The book was written in 1986, when Reagan was President, so that gives you a sense of the history you are reading. It reads like investigative journalism, to an extent, and is a comprehensive analysis of the industry-labor relations of the era without taking sides. The author finds fault where fault can be found.
Some quotes I flagged that I want to remember:
“Bethlehem Steel is a perfect example of how a company lulled itself into a parochial view of the world.”
“‘The definition of intelligence or ability was to do things the Bethlehem way,’ Heinz remarked. ‘And the Bethlehem way was “The way we always did it in the past.”’”
“‘They relied too much on the steel when it was their major industry. We could not do much with them until we convinced them, “Hey, you have to rely more on yourself.”’”
“Everything I found in my research supports the Iverson assessment. High wages are not the problem in the steel industry: ossified, union-dictated work practices are the problem.”
Some quotes I flagged that I want to remember:
“Bethlehem Steel is a perfect example of how a company lulled itself into a parochial view of the world.”
“‘The definition of intelligence or ability was to do things the Bethlehem way,’ Heinz remarked. ‘And the Bethlehem way was “The way we always did it in the past.”’”
“‘They relied too much on the steel when it was their major industry. We could not do much with them until we convinced them, “Hey, you have to rely more on yourself.”’”
“Everything I found in my research supports the Iverson assessment. High wages are not the problem in the steel industry: ossified, union-dictated work practices are the problem.”
May 3, 2018
Very well-researched book that examines the rise and fall of Bethlehem Steel. Strohmeyer does a good job providing context and detailing how the company and the steel industry fell apart in the 1980s and 1990s. Honestly, it was pretty sad reading about what happened to the company and its workers after so many years of success. While on one hand I appreciate the work of the steel union to protect employees and get them the best wages possible, it's also really hard to read how much the wage and benefit hikes crippled the company in the long-run.
June 17, 2019
Interesting and well written book about the downturn of America’s steel industry and Bethlehem Steel. The author makes sure to share both sides of the story - big steel and the steelworkers union, each responsible in its own way for the state of the industry. The book is filled with facts of how the company shaped the town and surrounding area to suit its executives, which is fascinating to me as a visitor to the area over the last 20 years.
October 25, 2022
Strohmeyer provides an excellent account of the decline of Bethlehem Steel. He investigates the factors that contributed to the downfall of one of the biggest steel manufacturers in the U.S., thereby creating a blue print for how to run a healthy, successful, thriving, booming business and industry into the ground.
November 11, 2023
From and live in the town. Essential reading for me. Couldn’t put it down.
September 21, 2015
Lately, I've been reading books on the collapse of heavy manufacturing in the US. This is one of the better ones at explaining, in layman's terms, what happened. The reasons for the collapse are many and not all are simple to pin down. Creeping globalization, lack of forward-thinking investment, mismanagement, stubborn unionism, Southern mini-mills, an uncaring federal government, etc ... It's all here. The reasons are as varied as most people's opinions. It's a complex question that can't be answered with the usual easy quip put forth by most. The book shows it's age, especially in respect to Weirton Steel, but it's an excellent primer and a quick read.
August 31, 2016
I live in Bethlehem, so this was of interest to me. My favorite part is that it was written in `1986, and Bethlehem Steel had not ceased operations here in Bethlehem, so the ending of the story could not yet be told. It was a nice history of the rise and fall of steel in America.
July 17, 2014
Strohmeyer's book is an excellent balance of union and executives who both brought the steel to a halt in Bethlehem
Displaying 1 - 15 of 15 reviews