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And the Wolf Finally Came

And the Wolf Finally Came: The Decline and Fall of the American Steel Industry

John P. Hoerr
Copyright Date: 1988
Pages: 736
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  • Book Info
    And the Wolf Finally Came
    Book Description:

    • Choice 1988 Outstanding Academic Book• Named one of the Best Business Books of 1988 by USA Today

    A veteran reporter of American labor analyzes the spectacular and tragic collapse of the steel industry in the 1980s. John Hoerr's account of these events stretches from the industrywide barganing failures of 1982 to the crippling work stoppage at USX (U.S. Steel) in 1986-87. He interviewed scores of steelworkers, company managers at all levels, and union officials, and was present at many of the crucial events he describes. Using historical flashbacks to the origins of the steel industry, particularly in the Monongahela Valley of southwestern Pennsylvania, he shows how an obsolete and adversarial relationship between management and labor made it impossible for the industry to adapt to shattering changes in the global economy.

    eISBN: 978-0-8229-9111-3
    Subjects: History, Business

Table of Contents

  1. Foreword
    (pp. xi-xii)
    Ben Fischer

    My association with the author of this book has been unusual. For many years, until 1979 (the year of my retirement as an official of the United Steelworkers of America), John Hoerr was an observer and I was one of those being observed as I took part in labor-management negotiations in the steel industry.

    Hoerr was (and is) highly respected by both labor and management. He is a superb journalist, with an insider’s perception of the economics, management systems, labor relations techniques, and social policies of steel. His book is notable for its breadth and insight, and it has a...

  2. Acknowledgments
    (pp. xiii-xv)
    John P. Hoerr
  3. Map of the Pittsburgh region
    (pp. xvi-xvi)
  4. Chapter 1
    (pp. 1-23)

    It is a trip weighted with shock and nostalgia. I am driving east on Second Avenue in Pittsburgh, heading out of the city and up the Monongahela River. Behind me stand the eminences of steel and glass, bunched in the heart of the city, where management makes decisions for its far-flung steel empire. Ahead lie the mill towns and steel plants, strung along the winding river artery, where labor produces molten iron and steel and finished steel products. Once vital parts of Andrew Carnegie’s wondrously profitable linkage of mines and mills, most of these plants now sit idled and empty,...

  5. Chapter 2
    (pp. 24-51)

    Steelworkers were not the only group to suffer in the 1980s. The collapse of the once mighty American steel industry occurred at a time of vast economic restructuring that affected every industry and virtually every person. After a long, seemingly stable period following World War II, a series of upheavals sped along the fault lines of the world economic system, turning a familiar landscape into an unrecognizable jumble of upended industries and overlapping trade borders.

    During a period of only ten years, from the mid-1970s to the mid-1980s, the world saw the rise and fall of the OPEC oil cartel,...

  6. Chapter 3
    (pp. 52-81)

    An old black and white photograph stood on a shelf in a conference room adjoining Lloyd McBride’s office in Pittsburgh. It showed about seventy men lined up in neat rows outside the Foster Brothers Manufacturing Company in St. Louis. They were mostly young and confident-looking and, except for the coarse shirts, could have been mistaken for a graduating class at a small college. In reality, this was a snapshot of the American working class, Depression Era, 1940. Despite their obliging smiles for a photographer, the future held little promise for these men as long as the Depression lasted. There was,...

  7. Chapter 4
    (pp. 82-108)

    Friday, August I, 1986. Masses of smooth, gray clouds are closing in on the sun, rather like the halves of a domed roof sliding shut over an empty stadium. It is late afternoon. I am driving south on Lysle Boulevard In McKeesport, passing the mile-long National Works on my right. The three blast furnaces have vanished, dynamited to rubble, leaving a long gap in the mill’s jagged skyline. For the first time since 1889, when the first two furnaces were constructed here, a passerby could have a clear view of the mountainous cliff across the river. One tends to think...

  8. Chapter 5
    (pp. 109-133)

    In 1973, I. W. Abel, a former foundryman, was serving his third term as USW president. At the age of sixty-four, white-haired, bass-voiced, his face a tribulation of bumps and wrinkles, Abel had a working-class stolidity about him that fit the public stereotype of union presidents. When he sat beside George Meany at an AFL-CIO executive council meeting, it appeared that he had been dozing there for years amidst the old heads and swirling cigar smoke. This was not a true image, for Abel was a fairly progressive leader and a competent administrator. His major achievement—and it was no...

  9. Chapter 6
    (pp. 134-161)

    We New York journalists who specialize in economic reporting can take the economic pulse of the nation without leaving our offices. We read the Dow-Jones ticker for the news on mergers, acquisitions, and bankruptcies, punch up the latest stock-market prices on a Bunker-Ramo, and scan the reports issued daily, weekly, and monthly by the U.S. Treasury, Federal Reserve, Commerce Department, and Bureau of Labor Statistics. A formidable array of data practically leaps at us from all sources—figures showing money supply, housing starts, ten-day auto sales, retail sales, consumer and producer price indexes, new claims for unemployment insurance, gold and...

  10. Chapter 7
    (pp. 162-193)

    The Mon Valley mill towns did not spring full grown from the iron breast of Andrew Carnegie. Most of them had a rural antecedent, though it might not have been more than a country crossroads with a few houses. Upon this pre-Revolutionary civilization, with its century-old political divisions and rural characteristics, was imposed a harsh factory economy. Out of the inevitable clash grew a new way of life with social and political patterns that would have a profound effect on relations between workmen and bosses in the steel mills.

    Less than three hundred years ago, Monongahela country was an unexplored...

  11. Chapter 8
    (pp. 194-214)

    Hard times always seem to produce pithy expressions that describe, if not explain, the nation’s predicament. In the early 1980s it became voguish to contrast the long prosperous years of economic growth after World War II with the sudden, deep plunge starting in the late 1970s in gravitational terms. What had once been “on the way up” was now “on the way down”—and would continue falling for some time to come. The issue for the labor movement—and the American system of industrial relations—was how to convert labor’s “upside” gains to “downside” compromises with economic reality. For institutions...

  12. Chapter 9
    (pp. 215-235)

    In the week ending June 11, 1982, 532 companies in the United States declared bankruptcy, the highest weekly total since the Depression. More than 50,000 businesses had already failed during fiscal 1982, compared with 11,432 in 1975, the peak year of the last big recession. When President Ronald Reagan attended an economic summit meeting at Versailles in June, 30 million people were out of work in the industrialized countries. Unhappy European leaders urged him to reduce interest rates in the United States—they ranged up to 25 percent for short-term loans—and lead the world out of the economic morass....

  13. Chapter 10
    (pp. 236-260)

    The steel negotiations of 1982 began on July 5 in a sixty-first-floor conference room in the U.S. Steel Building, about twenty-five yards from Bruce Johnston’s office. This was the elite floor at U.S. Steel—some called it “ulcer heaven”—where the corporation’s top executives, including Chairman Roderick, worked in large, well-appointed offices sealed off from outsiders by a thick glass door operated by electronic locks. The conference room, which was long and narrow, contained a rectangular table and a few prints on the walls. The five negotiators would see much of this room over the next several months.¹

    Generally, union...

  14. Chapter 11
    (pp. 261-295)

    Mike Bilcsik wore a black brush moustache and had large, ruminative eyes under sooty brows, a combination that somehow made him appear both sinister and passionately idealistic. It was a sort of dark, anarchical look that I associated with those mythical “foreign labor agitators” that the mill town mayors of the Monongahela Valley condemned in absentia during the 1919 steel strike. Bilcsikwasa Slovak but by no means sinister. He was also an idealist, but a reformer, rather than an agitator. Unfortunately, the one reform that he had wanted to introduce for most of his working life in the...

  15. Chapter 12
    (pp. 296-332)

    By the 1970s, demoralization pervaded the Monongahela Valley mills. This conclusion became clear in dozens of interviews I conducted with workers and supervisors. A corrupt atmosphere had devitalized human relations and the quality of work over several decades. The companies’ failure to modernize spurred employee fears about job security and eroded management credibility. Productivity shriveled. A profit-grabbing focus on quantity withered employees’ pride in producing good steel. Relations between several groups—employees and foremen, union and company officials, plant-level supervisors and corporate management—turned increasingly sullen and hostile. Management kept the union out of its business, and the union held...

  16. Chapter 13
    (pp. 333-360)

    As the recession grew worse in the summer of 1982, unemployed workers began to call for government action. On July 31, two hundred people jammed a “hot and steamy” meeting room at Local 2227 in West Mifflin to demand an extension of unemployment compensation (UC) benefits. The unusual size of the audience on a Saturday testified partly to aggressive organizational work by the Mon Valley Unemployed Committee. The self-help group had expanded its activities since the spring; in July it distributed free food to nine hundred families in the Mon Valley. A food bank started by Ron Weisen’s Local 1397...

  17. Chapter 14
    (pp. 361-389)

    For the second time, GM chairman Roger Smith stepped on stage as thedeus ex machinaof the steel labor drama. In late December 1982, Smith telephoned McBride to give a friendly warning. GM must know by March 1, 1983, whether steelworkers would be producing steel as of August I, or whether they would be on strike. The giant automaker followed a practice of letting supply contracts in March for steel and other materials to be used in producing cars for the new model year, which began in August. If a domestic steel strike on August 1 were still a...

  18. Chapter 15
    (pp. 390-414)

    The steel labor settlement of March 1, 1983, removed a cloud of discord that had overshadowed the Monongahela Valley and other steel regions for nearly a year. The agreement, of course, could not, and did not, cause the steel industry to rebound. Wage cuts of themselves do not stimulate business. The industry kept dwindling over the next four years, and so did other basic industries, permanently contracting the once prosperous world of the American blue-collar worker. The Steelworkers, meanwhile, went through an agonizing political battle and elected a new leader, Lynn Williams, who would respond to the steel industry crisis...

  19. Chapter 16
    (pp. 415-446)

    David Roderick was not a man who lived on political hope. A hard-boiled former marine sergeant, the U.S. Steel chairman drove his corporation like a tank across the pitfalls of high finance and through the barriers of union resistance. In the mid-1980s, Roderick gave a daunting performance on steel’s desolate landscape, slashing prices to gain market share, fighting off wily corporate raiders, and trading the Steelworkers’ Lynn Williams bold move for bold move. Doughty Andrew Carnegie would have applauded.

    Much of what happened in this period stemmed from a decision by Roderick. When the White House in 1982 and 1983...

  20. Chapter 17
    (pp. 447-476)

    Monessen is a gritty little town pressed between a steep, walled-in hill and the brownish Monongahela, just north of Lock & Dam No. 4 and a horseshoe bend in the river south of Donora. The city lies only a short distance as the bird flies, but several tortuous driving miles on congested, two-lane roads from the nearest expressway, Interstate 70. Founded in 1897 as the site of a tinplate mill, the town received its name from a land developer who foresaw the little settlement exploding into an Essen-on-the-Mon, like the big German industrial city in the Ruhr Valley.

    On a Saturday...

  21. Chapter 18
    (pp. 477-512)

    It takes a curious empathy for smoke, fire, dirt, roaring machines, and the people who tend them to become fond of a steel mill. I confess to feeling that way about two particular steel plants. One is the old USS National Works in my home town, a place where I, tangentially, helped build a boiler house and, literally, spent one summer doing mostly nothing. The other plant is LTV Steel’s Aliquippa Works, which I had a unique opportunity to observe from the inside. Important things happened in both of these plants in 1985.

    In McKeesport, the old guard in Local...

  22. Chapter 19
    (pp. 513-538)

    In January 1986, full page ads began appearing in steel-town and national newspapers under attention-catching headlines. “Steel Yourself,” warned a headline in theNew York Times:“America’s most basic industry is dying and nobody but us seems to care. Are we to depend on the Japanese, the Koreans, the Brazilians, the Europeans to defend our country?” ThePittsburgh Presscarried another ad titled “The Steel Domino,” which declared that “America’s economy is like a row of dominoes. If the steel domino falls, others will also fall.”

    These and other ads were part of a “Crisis in Steel” program sponsored by...

  23. Chapter 20
    (pp. 539-566)

    In the fall of 1986, USX’s steel division—the traditional old U.S. Steel, minus oil, gas, chemicals, and real estate—almost became a worker-owned company. This is more than a “might have been” tale. It is about the grim determination of three negotiating parties, each fighting for a different concept of how corporations ought to be managed and for what purpose. The battle hung in the balance for a few critical weeks and ended on a deeply ironic note.

    The story actually started in August 1982, when more than one hundred twenty-five thousand steelworkers were unemployed and the Mon Valley...

  24. Chapter 21
    (pp. 567-588)

    During the six years covered by the major part of this book, manufacturing in the Monongahela Valley exploded into death the way it had exploded into life. The extent of economic devastation in the valley is difficult to comprehend, the more so when one realizes that it happened in little more than one generation. Steelmaking and other manufacturing reached a peak of activity during World War II, began a long, slow descent in the 1950s, and plunged to the rocks of near destruction in the 1980s. If the concentration of heavy industry in the Mon Valley was once an awesome...

  25. Map of steel works in the Monongahela Valley, 1987
    (pp. None)
  26. Chapter 22
    (pp. 589-604)

    Forty-five years ago, Clinton Golden and Harold Ruttenberg—the intellectuals of the young steel union movement—hypothesized that “community disciplines” forced upon two generations of immigrant steelworkers in the Monongahela Valley had created labor stability (see chapter 7). In the late 1980s, an opposite image of laborinstabilityhovers over the empty mills in Pittsburgh’s industrial valleys, retarding the economic recovery of the region. The name given to this image is “bad labor climate,” which—true or not—turns away prospective employers. This is the last bequest, the final irony, of a century of steelmaking in the Mon Valley: The...

  27. Chapter 23
    (pp. 605-620)

    In the 184-day shutdown of USX’s steel plants, the USW proved that it still could mobilize workers to engage in old-fashioned conflict. But throwing up picket lines recedes as a viable strategy as the union loses monopoly control of the supply of labor. Nor does relying on import restraints ensure the long-term health of an industry in a world of increasing economic interdependence. The challenge for the USW in the 1980s was to formulate innovative strategies for keeping its industries competitive in cost and quality. This called for a different kind of leadership, one willing to accept new ideas, to...