Bethlehem Steel Corp., the company that forged the steel for the Golden Gate Bridge and many of the armaments the nation used to win world wars, ceased to exist yesterday.
Felled by cheap imports, overwhelming debt and the burden of paying benefits to an aging workforce, the nearly 100-year-old company leaves behind about 95,000 retirees, including 20,000 in the Baltimore-Washington region, who lost their company-paid health insurance and saw their pensions transferred to the control of the federal government, which will reduce the benefits.
Its assets were sold in bankruptcy court for $1.5 billion to International Steel Group, which will continue to operate them, including the giant Sparrows Point plant in Baltimore, which has about 3,000 workers.
Bethlehem Steel developed the H-beam that forms the skeletons of three-quarters of the buildings on the New York skyline, including the Waldorf-Astoria Hotel, Madison Square Garden and the Chrysler Building. At its peak during World War II, Bethlehem Steel employed almost 300,000 workers, including 180,000 at its shipbuilding facilities, which built 1,121 naval and merchants vessels during the conflict.
"This company was the most important to America's national defense of any company in the past century," said Lance Metz, a historian at the National Canal Museum in Easton, Pa., and an authority on Bethlehem Steel's history. "We wouldn't have won World War I and World War II without it."
Robert S. "Steve" Miller Jr., Bethlehem Steel's chairman and chief executive, said in an interview that he has "greatly mixed emotions" about what has happened. Faced with the prospect of liquidating entirely, he said he is pleased that parts of the company will survive under International Steel Group, which is known as ISG. Still it was tough, he said, to have to stop providing health coverage to retirees, turn the pension plan over to the government, and eliminate about 150 jobs at the company's headquarters in Bethlehem, in eastern Pennsylvania.
"It's a mix of happiness for the mills and sadness for those we haven't been able to satisfy," Miller said. "I'm surrounded by people with sadness of having long careers come to an end at the same time."
Cleveland-based ISG, which also bought up the remnants of LTV Steel, intends to change the company's name -- all the Bethlehem signs were taken down or covered up yesterday -- sell some excess real estate and keep the mills operating.
Peter Morici, a professor of international business at the University of Maryland, said the new company has a good chance of success. It is emerging "in a very competitive position . . . with some of the most efficient mills in the world," he said.
ISG reached a landmark agreement with the United Steel Workers of America that will allow the company to modernize production and increase productivity, bringing costs to a level where its prices will be competitive in the international market, officials said.
"We don't come to the table with a lot of baggage, so we could have a clean slate and work with the USWA to operate in a way that makes sense of everybody," Mitchell Hecht, ISG's chief financial officer, said in an interview. "There's a lot of history there, but hopefully there's a lot of future."
The takeover is another step in the "humane consolidation of the American steel industry," Leo W. Gerard, president of the steelworkers union, said last week in a statement.
Bethlehem's Miller said the company was forced to confront a problem other old-line American corporations will soon face, too -- "a time bomb on the balance sheet." He said paying for retiree health care and pensions was a "crushing burden" that frightened away investors who might have provided Bethlehem Steel with money for essential renovation and modernization.
"I'm concerned for our country, what with the aging demographics and skyrocketing medical costs," he said. "We can't expect employers to take on an ever-greater share of the expense. In other countries, government takes on more of the responsibility."
Many Bethlehem retirees were furious and fearful after the loss of their health insurance after the action was announced in March. Some from Sparrows Point gathered at the union hall, where a black-marble memorial lists the names of more than 100 employees who have lost their lives in workplace accidents there.
"It's a kick in the teeth," said Don Kellner, 65, of Dundalk, a millwright for 44 years. "This is so wrong."
In the weeks after the March announcement, many of those retirees learned they couldn't find comparable health insurance at prices they can afford. Donald N. Smith, 67, of Greenbelt, a retired crane inspector, said he put all his records and memorabilia through a shredding machine on April 8, when he heard about Miller's testimony on Capitol Hill about the company's inability to provide health insurance to retirees.
"I feel we were betrayed and lied to," Smith said. "It's been devastating."
Miller said he believed Bethlehem Steel had behaved honorably until the end, and had found a way to ensure that parts of the company will survive.
"We did not miss a payroll or disappoint a customer, and we found a safe harbor going forward," Miller said.