The Bethlehem Steel Corporation was an American steelmaking company headquartered in Bethlehem, Pennsylvania. Until its closure in 2003, it was one of the world's largest steel-producing and shipbuilding companies. At the height of its success and productivity, the company was a symbol of American manufacturing leadership in the world, and its decline and ultimate bankruptcy and liquidation in the late 20th century is similarly cited as an example of America's diminished manufacturing leadership during the late 20th century. From its founding in 1857 through its 2003 dissolution, Bethlehem Steel's headquarters were based in Bethlehem, Pennsylvania, in the Lehigh Valley region of eastern Pennsylvania. Its primary steel mill manufacturing facilities were located in Bethlehem, Pennsylvania, and were later expanded to include a major research laboratory in Bethlehem, and various additional manufacturing plants in Sparrows Point, Maryland; Johnstown, Pennsylvania; Lackawanna, New York; and Burns Harbor, Indiana.
The company's steel was used in the construction of many of the nation's largest and most famed structures. Among major buildings, Bethlehem produced steel for 28 Liberty Street, the Empire State Building, Madison Square Garden, Rockefeller Center, and the Waldorf Astoria hotel in New York City and Merchandise Mart in Chicago. Among major bridges, Bethlehem's steel was used in constructing the George Washington Bridge and Verrazzano–Narrows Bridge in New York City, the Golden Gate Bridge in San Francisco, and the Peace Bridge between Buffalo and Fort Erie, Ontario.
Bethlehem Steel played an instrumental role in manufacturing the U.S. warships and other military weapons used in World War I and later by Allied forces in ultimately winning World War II. Over 1,100 Bethlehem Steel-manufactured warships were built for use in defeating Nazi Germany and the Axis powers in World War II. Historians cite Bethlehem Steel's ability to quickly manufacture warships and other military equipment as decisive factors in American victories in both world wars.
Bethlehem Steel's roots trace to an iron-making company organized in 1857 in Bethlehem, later named the Bethlehem Iron Company. In 1899, the owners of the iron company founded Bethlehem Steel Company and, five years later, Bethlehem Steel Corporation was created to be the steelmaking company's corporate parent.
Bethlehem Steel survived the earliest declines in the American steel industry beginning in the 1970s. In 1982, however, the company suspended most of its steelmaking operations after posting a loss of $1.5 billion, attributable to increased foreign competition, rising labor and pensions costs, and other factors. The company filed for bankruptcy in 2001, and was dissolved in 2003 after its remaining assets were sold to International Steel Group.
Contents
History
19th century
In 1857, the first iron works in Bethlehem, Pennsylvania, was launched as the Saucona Iron Company by Augustus Wolle. That same year, the Panic of 1857, a national financial crisis, halted the company's further organization. Another organization subsequently started, its site moved elsewhere to South Bethlehem, and the company's name was changed to the Bethlehem Rolling Mill and Iron Company. On June 14, 1860, the board of directors of the fledgling company elected Alfred Hunt president.
On May 1, 1861, the company's name was changed to the Bethlehem Iron Company. Construction of the first blast furnace began on July 1, 1861, and was operationalized on January 4, 1863. The first rolling mill was built between the spring of 1861 and the summer of 1863 with the first railroad rails being rolled on September 26, 1863. A machine shop, in 1865, and another blast furnace, in 1867, were completed. During its early years, the company produced rails for the rapidly expanding railroads and armor plating used by the U.S. Navy.
The company continued to prosper during the early 1880s, but its share of the rail market began to decline in the face of competition from growing Pittsburgh and Scranton-based firms, such as the Carnegie Steel Company and Lackawanna Steel. The nation's decision to rebuild the Navy with steam-driven, steel-hulled warships reshaped Bethlehem Iron Company's destiny.
Following the American Civil War, the U.S. Navy quickly downsized after the end of hostilities, and national focus was redirected toward settling the West and rebuilding the war-ravaged South. Almost no new ordnance was produced, and new technology was neglected. By 1881, international incidents highlighted the poor condition of the U.S. fleet and the need to rebuild it to protect U.S. military capabilities, trade, and prestige.
In 1883, U.S. secretary of the Navy William E. Chandler and U.S. secretary of war Robert Todd Lincoln appointed Lt. William Jaques to the Gun Foundry Board, and Jaques was sent on several fact-finding tours of European armament makers. On one of these trips, he formed business ties with the firm of Joseph Whitworth in Manchester, England. He returned to the U.S. as Whitworth's agent and, in 1885, was granted an extended furlough to pursue this personal interest.
20th century
In 1901, Charles M. Schwab (no relation to the stockbroker Charles R. Schwab), purchased Bethlehem Steel Company, and named Samuel Broadbent as its vice president. During this time, the company's lease with the Bethlehem Iron Company came to an end as the Bethlehem Steel Company gained control of all properties from the Bethlehem Iron Company and Bethlehem Iron Company ceased operations.
Schwab transferred his ownership of Bethlehem Steel Company to U.S. Steel Corporation, the company where he previously served as president. Schwab then repurchased Bethlehem Steel Company, and sold it to United States Shipbuilding Company, which owned Bethlehem Steel Company only briefly. The United States Shipbuilding Company was in turmoil; its subsidiaries, including Bethlehem Steel Company, contributed to United States Shipbuilding Company's problems. Schwab again became involved with Bethlehem Steel Company through the parent company, United States Shipbuilding Company.
In 1903, United States Shipbuilding Company planned to reorganize as Bethlehem Steel and Shipbuilding Company, which was the second company to use the name Bethlehem Steel. However, United States Shipbuilding Company was not reorganized as Bethlehem Steel and Shipbuilding Company; instead, a plan was drawn up for a new company to be formed to replace United States Shipbuilding Company. The new company was initially to be named Bethlehem Steel and Shipbuilding Company. In 1904, it instead assumed the name Bethlehem Steel Corporation. From 1906 until it was delisted in 2002, Bethlehem Steel was traded on the New York Stock Exchange under the symbol BS.
Bethlehem Steel Corporation was formed by Schwab, who had recently resigned from U.S. Steel, and by Joseph Wharton, who founded Wharton School at the University of Pennsylvania in Philadelphia. Schwab became the company's first president and first chairman of its board of directors.
After its formation, Bethlehem Steel Corporation purchased Bethlehem Steel Company and its remaining subsidiaries from United States Shipbuilding Company. Bethlehem Steel Company became a subsidiary of Bethlehem Steel Corporation, though the Bethlehem Steel Company also had subsidiaries of its own. Bethlehem Steel Corporation became the second-largest steel provider in the nation. Both Bethlehem Steel Company and Bethlehem Steel Corporation existed simultaneously after 1904 until the 1960s, when the two companies merged into Bethlehem Steel Corporation.
Late 20th century
In 1946, Bethlehem Steel signed a contract with mining company LKAB, committing the company to contribute to the post-World War II recovery of the iron ore industry in Norrbotten County in northern Sweden. Following the end of World War II, Bethlehem Steel's plant continued to supply a wide variety of structural shapes for construction trades. Galvanized sheet steel under the name BETHCON was widely produced for use as duct work or spiral conduit. The company also produced forged products for defense, power generation, and steel-producing companies.
From 1949 to 1952, Bethlehem Steel had a contract with the U.S. federal government to roll uranium fuel rods for nuclear reactors in Bethlehem Steel's Lackawanna, New York plant. Workers were not aware of the dangers of the hazardous substance and were not given protective equipment. Some workers later sought compensation under a radiation exposure law, which was enacted in 2000 and required the U.S. Labor Department to compensate workers up to $150,000 if they developed cancer later in life, provided their work history involved enough radiation exposure to significantly increase their cancer risk. Bethlehem Steel workers, however, have not been awarded this compensation because radiation doses involved in processing fresh uranium fuel is low and produces a small risk relative to baseline risks. The larger danger in processing uranium is chemical poisoning from the heavy metal, which does not produce cancer.
The steel industry in the U.S. prospered during and after World War II, while the steel industries in Germany and Japan were in ruins, devastated by allied bombardments. Bethlehem Steel's success reached its peak in the late 1950s and early 1960s. The company began manufacturing 23 million tons of steel annually. In 1958, the company's president, Arthur B. Homer, was the nation's highest-paid business executive, and the firm built the first phase of what became its largest plant, Burns Harbor, between 1962 and 1964 in Burns Harbor, Indiana.
In 1967, the company lost its bid to provide steel for the original World Trade Center. The contracts, a single one of which was for 50,000 tons of steel, went to competitors in Seattle, St. Louis, New York, and Illinois.
U.S. global leadership in steel manufacturing lasted about two decades, during which U.S. steel industry operated with little foreign competition. Eventually, however, foreign firms were rebuilt with modern techniques, including continuous casting, while profitable U.S. companies resisted modernization. Bethlehem Steel experimented with continuous casting but never fully adopted the practice.
21st century operations, bankruptcy, and liquidation
In 2001, Bethlehem Steel filed for bankruptcy, becoming the 25th American steelmaking company in the span of four years between 1998 and 2001 to file for bankruptcy protection. In 2003, the company was dissolved and liquidated with its remaining assets, including six plants, acquired by the International Steel Group. International Steel Group, in turn, was acquired by Mittal Steel in 2005, which then merged with Arcelor to become ArcelorMittal in 2006.
Despite closing its local operations, Bethlehem Steel tried to reduce the significant economic and social impact on Bethlehem and the Lehigh Valley area, announcing plans to revitalize the south side of Bethlehem where its headquarters and primary plant had existed since the mid-19th century. The company hired consultants to develop conceptual plans on the reuse of the massive property, and a consensus emerged to rename the 163 acres (66 ha) site Bethlehem Works and to use the land for cultural, recreational, educational, entertainment, and retail development. The National Museum of Industrial History, in association with the Smithsonian Institution and the Bethlehem Commerce Center, consisting of 1,600 acres (650 ha) of prime industrial property in Bethlehem would be erected on the site along with a casino and a large retail and entertainment complex.
In 2007, the Bethlehem Steel property was sold to Sands BethWorks, which planned to build a casino where the plant once stood. Construction began in fall 2007, and the casino was completed in 2009. Due to a global steel shortage at the time, the casino had difficulty finding the 16,000 tons of structural steel needed for construction of the $600 million casino complex.
The site of the company's original plant in Bethlehem, Pennsylvania is home to SteelStacks, an arts and entertainment district. The plant's rusted five blast furnaces were left standing and serve as a backdrop for the new campus. SteelStacks currently features the ArtsQuest Center, a contemporary performing arts center, the Wind Creek Bethlehem casino resort, formerly Sands Casino Resort Bethlehem, a gambling emporium, and new studios for WLVT-TV, the Lehigh Valley's PBS affiliate. The area includes three outdoor music venues: Levitt Pavilion is a free music venue featuring lawn seating for up to 2,500 people, Air Products Town Square at Steelstacks, and PNC Plaza, which hosts outdoor concerts. Levitt Pavilion and the casino resort are connected via the Hoover-Mason Trestle linear park.
Shipyards
Bethlehem Shipbuilding Corporation was created in 1905, when Bethlehem Steel acquired the San Francisco-based shipyard Union Iron Works. In 1917, it was incorporated as 'Bethlehem Shipbuilding Corporation, Limited.
Electric multiple units
In 1931 and 1932, Bethlehem Steel manufactured 38 electric multiple unit carriages for the Philadelphia-based Reading Company, then one of the nation's largest and most profitable commercial railroads.
Freight cars
From 1923 to 1991, Bethlehem Steel was one of the world's leading producers of railroad freight cars following their purchase of Midvale Steel, whose railcar division was located in Johnstown, Pennsylvania. Bethlehem Steel Freight Car Division pioneered the use of aluminum in freight car construction. The Johnstown plant was purchased from Bethlehem Steel through a management buyout in 1991, creating Johnstown America Industries.
Influence on American landmarks
Bethlehem Steel manufactured steel used in many of the nation's most prominent landmarks, including:
Bridges
George Washington Bridge
Golden Gate Bridge
Ben Franklin Bridge
Commodore Barry Bridge
Peace Bridge
Verrazzano–Narrows Bridge's Staten Island tower
Buildings
Alcatraz Island
Empire State Building
Madison Square Garden
Merchandise Mart
One Chase Manhattan Plaza's 53,000-ton steel frame
Rockefeller Center
Waldorf Astoria hotel
The John F. Kennedy Center for the Performing Arts
Dams
Bonneville Dam
Grand Coulee Dam
Hoover Dam
Railways
San Francisco Municipal Railway
Bethlehem Steel fabricated the largest electric generator shaft in the world, produced for General Electric in the 1950s, and the steel used for the Wonder Wheel in Coney Island.
In popular culture
Music
In 2012, Bethlehem Steel, a three-piece indie rock band, named itself after the company to honor its legacy.
Also in 2012, the song "Bethlehem Steel" by Nanci Griffith, one of the tracks on her album Intersection, mourned the company's closure.
In 2026, Brian J. MacShain released the song "The Steel" on his album Pennamite that tells the story of Bethlehem Steel's closure through the eyes of one of its workers.
In 1982, Billy Joel released "Allentown", a song depicting the lives of steelworkers in the twin cities of Allentown and Bethlehem, Pennsylvania. "The subject of the song is the demise of the manufacturing industry in the United States. With the closing of Bethlehem Steel a generation of people were left jobless and depressed, wanting to leave but still clinging to the glory their parents were able to achieve."
In 1996, Grant Lee Buffalo released the song "Bethlehem Steel”, off the album Copperopolis (album). It referenced the eponymous steel company in its lyrics.
Sports
Bethlehem Steel F.C. (1907–1930), sponsored by the Bethlehem Steel corporation, was one of the most successful early American soccer clubs.
Philadelphia Union II is an American professional soccer team that is the official affiliate of the Philadelphia Union of Major League Soccer. The club was founded and formerly based in Bethlehem, where it was known as Bethlehem Steel FC in honor of the original club.
In February 2013, the Philadelphia Union of Major League Soccer unveiled a third uniform that honors and harks back to the original Bethlehem Steel F.C. The kit is primarily black with white trim and features a sublimated Union emblem and a Bethlehem Steel FC jock tag.
Drink
Jennings Cox, a Bethlehem engineer, devised the Daiquiri while working at an iron mine of the same name in Cuba.
Leadership
Presidents and chairman of the company have been:
President
Charles M. Schwab, 1905–1916
Eugene G. Grace, 1916–1945
Arthur B. Homer, 1945–1960
Edmund F. Martin, 1960–1963
Stewart S. Cort, 1963–1970
Lewis W. Foy, 1970–1974
Frederic W. West Jr., 1974–1979
Richard F. Schubert, 1979–1980
Walter F. Williams, 1980–
Chairman of the Board
Charles M. Schwab, 1905–1939
Eugene G. Grace, 1945–1960
Arthur B. Homer, 1960–1964
Edmund F. Martin, 1964–1970
Stewart S. Cort, 1970–1974
Lewis W. Foy, 1974–1980
Donald H. Trautlein, 1980–1986
Walter F. Williams, 1986–