A shadow of steel's lost empire


Sparrows Point: Baltimore's once-mighty engine has mirrored the industry's collapse in America.

October 19, 2001|By Mark Reutter | Mark Reutter,SPECIAL TO THE SUN

If you want to know something about the troubles of the steel industry, whose latest casualty, Bethlehem Steel Corp., filed for bankruptcy Monday, head down the spine of Patapsco Neck past Dundalk to the outer fringes of Baltimore Harbor.

There you'll find a land of fantastic shapes and sizes - deltoid furnaces, long-armed cranes and broad-beamed buildings, some spilling out masses of railroad tracks, others eerily quiet and empty-handed, industrial hulks in search of work.

Sparrows Point is a brooding symbol of the changing fortunes of the steel business and of blue-collar Baltimore.

In its prime in the 1950s, this flagship plant of Bethlehem Steel was the largest steelworks in the world - furnaces, ovens and rolling mills that consumed 1/500th of the nation's total output of electricity, burned 6 million tons of coal a year and poured 22,000 tons of hot metal a day, an average of 15 tons a minute.

Sparrows Point was the hub of a steel-spoked manufacturing wheel in Baltimore that clacked out $2.8 billion worth of goods in 1957. Out of the blaze and hiss of its furnaces came the metal for Chevy tail fins, plate for Campbell's soup and National Beer cans, bridge sections for the Chesapeake Bay Bridge, and sheathing for refrigerators, toasters and a thousand other products that were part of America's post-war culture of abundance.

In those days, the plant had its own tang. Clouds of sulfuric acid rose from the pickling vats, catching the uninitiated by the throat. By day a shroud of gritty orange smothered the peninsula; at night the heat and flames projected a quavering glow across the horizon that was visible for miles around.

Inside the mills, men chewed Brown's Mule Plug tobacco to keep the dust out of their throats and they nailed rubber slabs from old tires to their shoes to keep their feet from getting burned on the brick floors.

The power of steel in steel country couldn't be divorced from the insular culture it created. Ed Gorman, whose grandfather arrived at the mills in 1896 from Ireland, never considered working anywhere else after he graduated from high school. Going to work for Bethlehem Steel, he said proudly, "was going into the middle class."

That was 50 years ago when 30,000 people worked at the plant. Today there are 4,000 left.

Sparrows Point was started by a group of Philadelphia businessmen seeking to exploit the discovery of iron ore near Santiago, Cuba. When opened in 1890, the sprawling plant was blessed by Cardinal Gibbons of Baltimore and christened "the Goddess of Industry" by the Maryland press.

A well-furnished company town was constructed. It had a company store, public schools, half a dozen churches and 500 houses built for different grades of employees going from A Street (management) to K Street (laborers).

Sparrows Point was purchased in 1916 by Charlie Schwab, the owner of Bethlehem Steel. A man of towering ambition, Schwab vowed to build Sparrows Point until it was the biggest metalworking center in the country. He might have succeeded had the Great Depression not intervened.

Bethlehem was plunged into financial distress in the 1930s made worse by Schwab's years of over-expansion. Sparrows Point did not recover until World War II. By then, Schwab was dead.

The war years were perhaps the "Point's" finest hour, a triumph of conventional steel making by a skilled and dedicated work force. The pipe mill rolled gun barrels for the Army. Other mills produced the steel for grenades, bombs, barbed wire, landing craft, cargo ships and airplanes.

The postwar period was even more prosperous. Standing astride the great steel-consuming markets of the Northeast and blessed with low-cost ore from new mines in Venezuela, Sparrows Point gushed metal. Vast fortunes were made at company headquarters at Bethlehem, Pa. In 1956, Schwab's successor, Eugene Grace, was the best-paid CEO in America, and 11 of 18 of the nation's highest-paid executives worked for Bethlehem Steel.

But the same executives who paid themselves such princely sums didn't see fit to pay for a decent research laboratory or invest in new technology that was being developed in Europe and Japan. Instead they divvied up orders with the other large U.S. steel makers and raised prices. "Our salesmen don't sell steel; they allocate it," a company official gloated.

In the 1960s, lackluster demand flashed a warning sign that the domestic steel industry was in trouble. Bethlehem needed either to strike out in new directions with improved products or lower prices on its standard items. It did neither.

The price increases encouraged substitution of other materials for steel. The Point's turf was first invaded not by "cheap steel imports" (as so often believed), but by a domestic rival. Reynolds Metals of Richmond, Va., innovated a low-cost aluminum can that soon stripped Sparrows Point of its beer and soft-drink contracts.

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