NAFTA's great divide Bethlehem Steel managers favor pact that workers fear

November 14, 1993|By Bill Glauber | Bill Glauber,Staff Writer

BETHLEHEM, Pa. -- The $383,333-a-year chairman of Bethlehem Steel has read the North American Free Trade Agreement cover to cover and says the deal is good for his customers, good for his company and good for his country.

"The important thing is for American employers to seize the day," Curtis H. Barnette says.

The $19-an-hour machinist at the Sparrows Point steel plant has followed the national debate and now follows her union in opposition to the accord because she says NAFTA is bad for workers, bad for her company and bad for her country.

"If this bill passes, what kind of industry are we going to have left in America?" Sandy Wright says.

The NAFTA debate at Bethlehem Steel mirrors the intellectual and political struggle played out by American business and union workers in the final days before the U.S. Congress votes on the trade package.

Virtually every major corporate leader has lined up to support the trade deal. And standing in opposition are a united front of labor unions.

American businessmen look south to Mexico and see opportunity, while American workers also look south and see the competition of a low-paid work force threatening to take their jobs.

Which view of life with NAFTA is correct?

The answer may not be known for years, even though the debate simmers in board rooms and on shop floors.

But come to Bethlehem Steel, once the very symbol of U.S. economic might, and the philosophical divide between management and labor takes shape and focus.

The two sides are not discussing the past.

They are debating the future.


From his executive suite atop a steel gray 21-story office tower in Bethlehem, Mr. Barnette has a grand view of late fall in the rolling Lehigh Valley.

But these days, the chairman's gaze is cast continent-wide, as he awaits the vote on NAFTA.

According to Mr. Barnette, Bethlehem Steel is poised to reap benefits from a free-trade deal that binds the United States, Canada, and Mexico.

The target of opportunity, Mr. Barnette says, is Mexico, a country on the verge of massive infrastructure investment, the likes of which hasn't been seen in this hemisphere since the United States began construction on the interstate highway system in the 1950s.

Mr. Barnette talks of autos, heavy equipment, light building materials, even tin soup cans washing over Mexico, all made with steel manufactured from places like Sparrows Point.

"We can compete," says Mr. Barnette, a member since 1989 of the presidentially appointed Advisory Committee on Trade Policy and Negotiations.

"We can be low-cost and high-quality. We can hold our business in this country."

At first glance, there is a certain irony in Mr. Barnette's support of NAFTA and free trade.

Mr. Barnette worked for 25 years in Bethlehem Steel's legal department and played an instrumental role in lobbying the federal government for import quotas that kept overseas competitors at bay while bolstering the U.S. steel industry in the late 1980s.

Back then, import quotas were a means of survival for Bethlehem Steel.

From being the broad-shouldered linebacker of a brawny American industrial economy, the corporation was ravaged by overseas competition and lack of innovation, forced to endure a painful restructuring that saw plants close and employment shrink from 122,000 in 1974 to 21,000 today.

Mr. Barnette says he is "for fair trade," explaining the Voluntary Restraint Arrangement quota system that expired in March 1992 was needed because U.S. steel producers were competing against government-subsidized overseas companies.

"In NAFTA we preserve U.S. trade laws," he says. "We will have fair trade with Mexico and Canada."

Fair trade in North America, Mr. Barnette says, will mean big business for Bethlehem Steel, even though exports now account for only 5 percent of the firm's overall business.

The reason for the NAFTA boom is simple, he says: Bethlehem Steel's domestic customers want the agreement.

"There is no job security for any company in the U.S. unless we have customers," he says. "Our customers are telling us they want NAFTA passed and they want U.S. products."

But Mr. Barnette says he understands the concerns of his employees, men and women who have seen first-hand the affects of American deindustrialization and now fear that NAFTA will lead to a further loss of U.S. manufacturing jobs.

NAFTA, he says, will be a job creator in America.

"Reasonable people can have different points of view," he says.

TC In Mr. Barnette's view, it will be U.S.-made steel in U.S.-made products that will flow to Mexico.

Mr. Barnette says that not even the lure of a low-paid work force would entice steel companies to make the billions in capital investments to move south of the border.

"You just don't spend $100 million and make tin plate," he says. "Or a billion dollars to make coated sheet products."

In the end, he says, NAFTA is good, very good, for America. "Mexico is going to change," he says. "It is going to change with us or without us. I want it to change with us."


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