Beth Steel benefits coalition to dissolve

REBCO represented retired salaried staff

December 29, 2006|By Jeanne Bonner | Jeanne Bonner,Morning Call

BETHLEHEM, Pa. -- An organization that represented thousands of Bethlehem Steel's retired salaried employees will cease to exist this week after nearly 20 years in operation.

The Retired Employees' Benefits Coalition, which at its height represented 13,000 salaried retirees of the defunct steel giant and their spouses, will voluntarily dissolve by Sunday, the last day of the year. Former Bethlehem Steel executives formed the organization in 1987 to create a unified voice for the company's retired salaried workers after a wave of bankruptcy filings hit the steel industry.

REBCO was not a union and did not have collective bargaining power. Nonetheless, the founders hoped the nonprofit organization would provide support and lobbying muscle for former salaried workers, not unlike the way the United Steelworkers fought for hourly union employees.

Ultimately, Bethlehem Steel, which once employed 26,500 steelworkers at its Sparrows Point mill in Baltimore County, did not file for bankruptcy until 2001, 14 years after the formation of REBCO. But the organization fought for benefit and pension law reform in the interim years and since 2002 has helped retirees navigate changes to their pension benefits and Medicare.

"We did not have anything comparable for salaried retirees and we thought that would put salaried employees at a disadvantage in a bankruptcy filing," said Bruce Davis, REBCO's chief counsel and its de facto spokesman.

Bethlehem Steel fell on hard times beginning in the 1980s, as a result of high labor costs, bad management decisions, outdated technology and foreign competition.

When Bethlehem Steel filed for bankruptcy, it had about 95,000 retirees and dependents. While REBCO's counsel was based in Bethlehem, the organization's leadership toured the country, holding information sessions wherever there were concentrations of Steel retirees.

"Without a doubt, it was the one thing that helped the salaried retirees obtain the knowledge they needed," said former Sparrows Point general manager Russell Jones of Ruxton, who oversaw 18,000 employees in Bethlehem's heyday. The plant now employs less than 2,500. A past president of REBCO, Jones estimates there are about 1,500 Bethlehem salaried retirees and spouses still in the Baltimore area.

The organization was instrumental in fighting on behalf of retirees when the company turned its pension obligations over to a federal agency, and later ceased paying for retiree health insurance.

The Pension Benefit Guaranty Corp. took over Bethlehem Steel's pension plan in December 2002, creating at the time the largest pension bailout in history. In March 2003, Bethlehem Steel ceased paying for health-care benefits about two months earlier than expected.

Davis said that when the news broke about the end of retiree health care, calls began to pour into his office from around the country. At one point, his office was fielding 40 calls an hour.

"The first question was, `Did I hear right?' We said, `Yes.' And then they said, `What do I do?'" Davis said.

Members point to the organization's regular newsletters as one of REBCO's greatest accomplishments.

"It kept the members informed relative to a whole host of problems they were concerned about," said current REBCO President Fred Harvey, who had been the general manager of the company's Bethlehem plant.

Harvey, 78, who retired in 1982, added, "REBCO had people who had the answers for our members."

The organization also lobbied for new pension legislation that will ensure that companies fully fund their pensions, and will increase contributions to the PBGC. The legislation was signed into law by President Bush in November.

Changes to Medicare's prescription drug plan has kept REBCO busy for the past few years, but those calls have dwindled, said Conrad Poniatowski, a former REBCO board member who lives in Lutherville.

"Once [Bethlehem] went bankrupt, we knew we were on a limited timetable," said Poniatowski, who retired as a senior manager at Sparrows Point in 2001 after designing its cold mill. "There's really nothing left for us to do. To maintain an office, an administrator and an attorney doesn't make sense."

The organization has paid its way through annual dues from members. Davis said dues were initially about $20 a year per family. More recently, members have paid about $10 a year. REBCO stopped collecting dues this year with an eye toward dissolving the organization, Davis said. The remaining dues money will be donated to a charity that trains guide dogs for the disabled.

Davis, Bethlehem Steel's former counsel who has run REBCO from his law firm, said he will work on the organization's behalf for the balance of the week. And then next week, he won't.

"I think a lot of people are sorry to see it go, but I have to say to you, what's the point of keeping it open?" Harvey said. "We have accomplished what we wanted to do. We got the pension squared away with PBGC. We got Medicare squared away for our members."

Jeanne Bonner writes for The Morning Call in Allentown, Pa.

Sun reporter Allison Connolly contributed to this article.

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