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Raze the Bethlehem Steel Tower of Mismanagement

Lehigh Valley has proposed using tax dollars to enshrine the defunct Bethlehem Steel Corp.'s dilapidated, 38-year-old headquarters building in Eastern Pennsylvania as a national monument to mismanagement.
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Lehigh Valley has proposed using tax dollars to enshrine the defunct Bethlehem Steel Corp.'s dilapidated, 38-year-old headquarters building in Eastern Pennsylvania as a national monument to mismanagement.

There's no question about the mismanagement. I know from firsthand experience. I worked as a millwright in Bethlehem's coke ovens and later became chairman of the United Steelworker's bargaining committee for Bethlehem. I saw some corporate foolishness.

There is a question, however, about the logic of using taxpayers' hard-earned dollars to create a memorial to a corporation that went bankrupt, slamming both its investors who lost money and its workers who lost jobs and pensions.

Lehigh County has asked the National Register to anoint the building, called Martin Tower, as historic, even though it's a dozen years short of meeting the minimum qualifying standard of existing for half a century. The 21-story hulk hasn't sold in the decade since the bankruptcy -- mainly because it needs $16.5 million in asbestos removal and sprinkler installation. I've got a much better idea for the future of the Martin Tower than forcing taxpayers to foot the bill to renovate and preserve it.

The Pennsylvania Preservation Board doesn't agree with me, though. It accepted Lehigh County's application for preservation that says:

"Martin Tower is the symbol of one of America's mightiest industrial concerns as it plunged from the zenith of its power into a steady decline, ultimately leading to failure that resulted in the loss of over 100,000 jobs and regional economic hardship."

The state recommended that the U.S. Department of the Interior agree to dole out untold tens of millions in tax dollars to commemorate corporate failure. Future generations could make the pilgrimage to Bethlehem, Pa., to gawk at the splendor of sleek Martin Tower and ponder "what did those corporate managers do wrong?" Was it too many corporate executives to fill the offices in the cruciform tower specially-designed to add extra corners for offices? Maybe if the architects had stuffed a few more corners into the skyscraper, tension among competing executives would have dissipated, and somehow Bethlehem would have been saved.

Perhaps the problem was Bethlehem Steel's private executive "airline." Lots of airlines have merged or gone bankrupt since the 1970s. Maybe the cost of running that sizeable fleet of corporate jets was too much for a steel corporation.

Maybe the problem was an arrogant, privileged corporate mentality. Bethlehem executives traveled to the United Steelworkers' union headquarters in Pittsburgh to discuss their "plan" to reorganize the company. I can still see the string of white stretch limousines pull up in front of the USW building. The suits piled out onto the street after the luxurious ride from the airport. They told the drivers to keep the cars waiting in front of the building for them. After all, it's hard to find your limousine sometimes, and you don't want it wandering off when you need it to make a quick get away after telling union leaders that workers needed to give up everything corporate executives had contracted to provide.

Bethlehem's reorganization plan was simple, really. Retired and active workers would lose pensions and health care. And Bethlehem Steel would use contract workers at its whim, enabling managers to pick up the phone and double the workforce as well as the cost for every job. But Bethlehem Steel would do its very best to preserve bondholders' investments because, as those executives said, it would be so embarrassing to management to fail to deliver to the people who had invested in them. It was not embarrassing to them, however, to break promises to workers that Bethlehem Steel executives had made in the labor contract. They also had an application pending for one of their top executives at the Burning Tree Country Club, and they were rightly concerned that the stigma of bankruptcy might damage chances for its approval.

In the final days of Bethlehem Steel, Leo W. Gerard, who is now USW international president, and I went to Martin Tower to talk to the executives. I remember walking down the hall to the board room, past oak doors that stood 12-feet tall, past private dining rooms and past walls covered in oil-painted portraits of all the corporations' past executives. They were stern looking guys, a whole bunch of them, a real art gallery full of them. I got a phone call during those days from an artist who had been commissioned by Bethlehem to paint the then-chairman's portrait. Bethlehem owed him $10,000, but they'd told him to get in line with all the other bankruptcy creditors. That was a very long line. I told him to send me the portrait; I was certain the USW could find some use for it, although probably quite different than its original purpose. I told him I'd urge Bethlehem to square up with him. He never sent me the picture, but I heard later that the chairman paid him out of his own pocket.

During those meetings at Martin Tower, the goal of the union was helping Bethlehem figure out a way to survive. Could we find a merger partner? Could Bethlehem Steel downsize? Were so many bosses necessary? The USW offered an asset restructuring and workforce plan. Bethlehem refused to consider it. Later, however, when ISG took over the Bethlehem assets, it used the USW plan.

While the U.S. Interior Department considers Lehigh Valley's application to use federal money to memorialize Bethlehem's blunders, I want to urge the government to do something entirely different with Martin Tower. Better to memorialize good deeds and criticize executive errors:

Tear that building down.

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