Businessweek Archives

Steel Town America: Used Up And Shut Down


Books

STEEL TOWN AMERICA: USED UP AND SHUT DOWN

HOMESTEAD: THE GLORY AND TRAGEDY OF AN AMERICAN STEEL TOWN

By William Serrin

Times Books -- 452pp -- $25

In the late 1980s, some Pittsburgh citizens began a project to redevelop the nearby Monongahela Valley towns recently abandoned by the steel industry. Dozens of architects from the U.S. and Britain visited Homestead, Pa., home of the famous mill that made steel for the Empire State Building and World War II battleships. Plans were drawn up to use some of the gigantic facilities as a museum and turn the riverbank into an esplanade with a pleasure-boat landing.

At a public meeting to present their ideas, the architects got an earful. The people didn't want tourist attractions; they wanted the region's mills to reopen. "We have a national disaster here in Homestead," said one resident, listing the used-up men recently dead of heart attack, stroke, or suicide. Half the town's former steelworkers were on the dole or working at minimum-wage jobs, he said. "We want to make the valley come back," shouted another.

In the end, neither side won. The mills were torn down, and Homestead and its neighbors are becoming ghost towns. Now, William Serrin, a former New York Times labor reporter, has written a memorial, Homestead: The Glory and Tragedy of an American Steel Town. The book is far broader than its title indicates: Serrin's nostalgic history of Homestead is wrapped around an account of the making of United States Steel Corp. and its partner in production, the United Steelworkers of America. Indeed, the vivid depiction of the growth of the company and the union--and the comfort and complacency that undid them--is Serrin's real achievement.

Two events resonate through the book: the nearby defeat, in the French and Indian War, of British General Edward Braddock, a victim of his own ignorance and arrogance, and the epic 1892 Homestead lockout and strike.

In Braddock's failure to adapt to the New World's skirmishing style of fighting, Serrin sees a parallel with the inertia of corporate and union leaders two centuries later. The 1892 lockout was a blow to the human spirit. Determined to end unionism in the Mon Valley, Andrew Carnegie, Homestead's owner, sent armed Pinkerton guards to occupy the mill and admit strikebreakers. A 12-hour battle ensued, in which seven workers and three guards died. Five days later, the uprising was quelled by the militia. Of 2,200 strikers who sought reinstatement, only 400 were rehired. "Forever after," says Serrin, "much of the energy, the independence--the grit--that had characterized the town was gone."

The strike's defeat was a prelude to the emergence of perhaps the most remarkable corporation ever: U.S. Steel. Carnegie had already built a colossus with holdings in natural resources, transportation, and iron and steel manufacturing. Then, J.P. Morgan bought it for $480 million and added holdings to combine under one management 65% of America's steel industry.

Serrin draws compelling biographies of U.S. Steel's successive chieftains and their approaches to industrial relations. From the early 1900s, the chairman was Elbert H. Gary, a "cold-eyed Methodist lawyer." To stave off unionization, Gary instituted a broad program of welfare capitalism. When, in 1919, the workers nonetheless struck, the company suppressed them brutally. Thereafter, to control steel towns, management exploited ethnic tensions and used spies, bribes, and the corruption of clergy and politicians.

In the 1930s came colorless Myron C. Taylor, who used company unions to manipulate employees. But after smashing several independent organizing drives, he abruptly changed tack, agreeing in 1937 to recognize the fledgling Committee for Industrial Organization (CIO) steelworkers' union. The pact he hammered out with CIO Chairman John L. Lewis gave workers almost everything they had sought in 1919. One reason: Taylor badly wanted labor peace so he could bid for British war contracts.

Suddenly, the union had 500,000 members. "The steelworkers were organized, but they had not organized themselves," observes Serrin. And therein, he shows us, lay the rub. This union would be for but not of the workers, making up in padded payrolls and perks what it lacked in democratic structure. Its prototypical leader would be David J. McDonald, a near-caricature of the bourgeois-aping "union statesman," with chauffeured limos and Brooks Brothers suits.

During the 1950s and 1960s, Homestead workers, replicating the self-indulgence of union and company executives, came to regard both mill and company as fair game for looting. U.S. Steel virtually ignored innovation, quality suffered, waste was huge, and fat contracts soon made the cost of steel labor nearly twice that of all U.S. industry.

The 1970s saw the beginning of the end. From 1974 to 1979, the company shut more than 40 plants. By 1984, 40% of industry workers were laid off. Protests by outraged Homestead residents were of no avail. U.S. Steel bought Marathon Oil Co. and became USX Corp. In 1986, the Homestead Works closed. The mills were dismantled. In the last words of the defeated Braddock, Serrin finds Homestead's epitaph: "Who would have thought it? All is over."HARDY GREEN


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus