I grew up in Allentown, PA, right next to Bethlehem of renowned Bethlehem Steel Corporation fame from 1972 (as a nine year old kid) until I started my regular first job in Chicago in 1988. I watched, in real time, the joint failure of the management and the steelworkers union to deal with Japanese steel dumping. Because neither party wou…
I grew up in Allentown, PA, right next to Bethlehem of renowned Bethlehem Steel Corporation fame from 1972 (as a nine year old kid) until I started my regular first job in Chicago in 1988. I watched, in real time, the joint failure of the management and the steelworkers union to deal with Japanese steel dumping. Because neither party would budge, the company posted a 1.5 billion dollar loss in 1982, the year I left for college. That was the beginning of the end. 13 years later, the management and board of directors filed for bankruptcy and 2 years after that it was all over, with pension liabilities exceeding the liquidation values from the final sell-off of assets, with an implied payout potential of about 46 cents on the dollar to pensioners, such that the PBGC had to take over the pension plan. The PBGC claims to have doubled the overall payout to 92 cents on the dollar, but I don't know if that is really true. One anecdote sticks in my mind, when my father bought a fairly nice used Buick Regal from a Bethlehem Steel union worker who had been laid off in the early '80s. The guy had a wife but his children had left the nest. It was the dude's third car, which he hadn't really needed in the first place.
I grew up in Allentown, PA, right next to Bethlehem of renowned Bethlehem Steel Corporation fame from 1972 (as a nine year old kid) until I started my regular first job in Chicago in 1988. I watched, in real time, the joint failure of the management and the steelworkers union to deal with Japanese steel dumping. Because neither party would budge, the company posted a 1.5 billion dollar loss in 1982, the year I left for college. That was the beginning of the end. 13 years later, the management and board of directors filed for bankruptcy and 2 years after that it was all over, with pension liabilities exceeding the liquidation values from the final sell-off of assets, with an implied payout potential of about 46 cents on the dollar to pensioners, such that the PBGC had to take over the pension plan. The PBGC claims to have doubled the overall payout to 92 cents on the dollar, but I don't know if that is really true. One anecdote sticks in my mind, when my father bought a fairly nice used Buick Regal from a Bethlehem Steel union worker who had been laid off in the early '80s. The guy had a wife but his children had left the nest. It was the dude's third car, which he hadn't really needed in the first place.