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Steel Days: On a Modest Resurgence in Bethlehem

In retrospect, it's clear how globalization and free trade disrupted the U.S. steel industry. It could be happening again. Survival for steel towns might be a matter of lower expectations and good luck.
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bethlehem steel

The Bethlehem Steel Plant, which closed in 1998. (Photo: William Thomas Cain/Getty Images)

A tourist driving west on US 78, from the New Jersey border through Pennsylvania, might fail to notice the city of Bethlehem. Tucked behind rolling hills, it's a quiet, unassuming municipality straddling the Lehigh River.

But a few short decades ago, the view from the interstate highway would've been different: A driver might have seen smoke billowing over those hills, produced around the clock by the blast furnaces and stacks at Bethlehem Steel Corporation, once the second-largest steelmaker in the United States; the city's South Side then generated constant tumult, a hellish racket that inevitably comes with steel operations the size of Bethlehem's. For a proud steel town, that clamor was the sound of prosperity.

Bethlehem Steel ceased operations in its namesake city 20 years ago this autumn, when the mill there went silent forever; at least one mill had been operating in the city since the 1850s. At its height, during World War II, the company, which finally went bankrupt in 2001, employed 284,000 people nationwide; the few thousand remaining workers in Bethlehem lost their jobs when steel production ended there in 1995.

I once worked as a steel reporter, so I was quite familiar with Bethlehem Steel story. A few years ago I stopped on a whim in Bethlehem, on my way to the middle west, curious to see how the city had fared. I was pleased and also surprised to discover that, unlike similar one-industry steel towns in the Rust Belt, the loss of the mill didn't prove fatal to Bethlehem. In fact, in the intervening years the city has healed and grown, for reasons that might have as much to do with plain old good luck as they do with pragmatic civic planning.


Bethlehem Steel's demise had many causes, according to the conventional assessment: new foreign competition, the ascent of more-efficient minimills, a changing product marketplace, legacy pension and health care costs, and a multi-layered management structure that moved too slowly to address its core and ultimately terminal business problems.

What happened economically to the city of Bethlehem overlapped the Rust Belt and North American Free Trade Agreement eras. But Bethlehem Steel's closing might be better classified as part of the Rust Belt era of the 1970s and '80s, whose numbers are nothing short of staggering. In 1980 there were 450,000 steelworkers in the U.S.; by the end of the decade there were 170,000.

In places like Youngstown, Ohio, and Lackawanna, New York—the former home of another Bethlehem steel plant—entire ways of living were eradicated overnight—it was the end of tens of thousands of blue-collar jobs that promised middle-class income.

bethlehem steel rust

Rust on the abandoned steel-stacks. (Photo: Kevin Nolan)

The late 1990s, though, seemed to offer new optimism for the steel industry itself, if not workers. Big Steel—behemoth integrated mills that make steel from scratch using iron ore and carbon, like Bethlehem—were on the decline, but minimills (lower-cost, highly efficient mills, like Nucor Corp., that use recycled steel as a raw ingredient) were continuing a decades-long ascent, and their investment in newer technologies was paying dividends. Several new minimills were built in the '90s, including new companies like Steel Dynamics of Indiana and Gallatin Steel (now Nucor Steel Gallatin) in Ghent, Kentucky.

Then came the Steel crisis of the early 2000s. Lower-priced foreign steel flooded the market again, and the hesitancy of the federal government, for political reasons, according to most industry leaders, to impose protective steel tariffs led to multiple bankruptcies and tens of thousands of layoffs.

Trade and tariff issues continue to be a serious concern for the steel industry; in fact, many top U.S. steel executives told Congress in March that the American steel industry at present is poised to sustain serious damage again—perhaps worse this time—for reasons nearly identical to those of a decade and a half ago; they blame an astronomical rise in low-cost foreign steel imports as a result of global overcapacity, coming largely from China.

Their dire predictions seem to be coming true already: U.S. Steel announced in August that in November the steelmaker would permanently close its blast furnace in Fairfield, Alabama, after laying off more than 4,000 U.S. employees already in 2015.


The final aspects of NAFTA took effect in 2008; the Economic Policy Institute estimates the U.S. lost 700,000 manufacturing jobs because of NAFTA. And although manufacturing sector losses in the U.S. began well before the early '90s, NAFTA and subsequent trade agreements served as an accelerant.

The results are where globalization meets the local and, ultimately, the personal, as people and places (“bricks and mortar and bodies,” as the writer Richard Rodriquez once put it) bear the brunt. In the towns and cities most affected by NAFTA, largely in the Midwest, citizens are left to confront what now seemingly teeters on local companies' decision-making—good and bad—regional factors, and global realities.

One way to gauge the effect is to watch what residents do with their feet—their migratory patterns, as it were. Many of the hardest-hit Rust Belt and post-NAFTA towns have emptied themselves, experiencing double-digit percentage population losses since 2000; these are cities like Detroit, Youngstown, Cleveland, Gary, and many more.

The population of Bethlehem, though, has remained stable for decades and has even grown slightly since the latest count. Robert Donchez, Bethlehem's current mayor, credits good civic planning with avoiding a fate similar to that of other Rust Belt towns. Bethlehem began diversifying its economy in the early 1960s, Donchez told me, attracting complementary businesses early on to its Lehigh Valley Industrial Parks; it increased that effort in the 1990s as Bethlehem Steel was ending its long, troubled descent and after Allentown, its larger neighbor, suffered severe blows to its manufacturing base, including the loss of Mack Trucks, Western Electric, and others. Good political and business leadership in Bethlehem throughout the painful retrenchment process were also important, he said, while also citing the responsible behavior of Bethlehem Steel in its final days.

Donchez says Bethlehem Steel could've simply fenced off the steel mill and buildings and walked away, leaving the entire site to rust in the sun; that would have been their right. Instead, the company demolished as much as it could in an attempt to re-claim the brownfield site. The work it managed to complete made it easier for future development, and Donchez gives credit to Bethlehem Steel's chief executive leader at the time, Hank Barnette. (Barnette, now 80, still lives in Bethlehem.)

But good luck also had its role: A long-ago decision to organize the school system regionally (thereby mitigating the impetus for families to flee to the suburbs for better schools), the proximity of four institutions of higher learning (including Lehigh University, just blocks from the mill), and the strategic and advantageous location of Bethlehem between New York and Philadelphia—which made the city ideal for steel production in the first place—these have now made Bethlehem attractive to distribution and warehouse companies.

Walmart recently opened a second mega-distribution center for its online business in Bethlehem, for example, and it plans to expand further. Many job opportunities at these businesses aren't equal to higher-paying manufacturing jobs, but Donchez is reluctant to label Bethlehem's economy “service-sector.” There are many high-tech companies in Bethlehem, he notes; these include Synchronoss, a leader in cloud solutions, and IQE, a supplier of wafers to the semiconductor sector. And the city is working to attract more, Donchez says.

Elsewhere, though, steel companies now seek to hire workers who have college degrees, and not just metallurgists, engineers, and managers, but steelworkers as well—a trend that has been going on for many years. Long gone are the days when a young person could get a job at a steel mill and enjoy that job and its benefits for life; vanished, too, is the idea that jobs on the steel-mill floor are solely manual-labor, blue-collar positions.


I visited Bethlehem again recently, as a tourist, and as I arrived in the city the South Side was in chaotic preparation for MusikFest, a 10-day event that draws more than a million people. Visitors are vital to Bethlehem; central to its tourism theme is the iconic memory of Bethlehem's halcyon steel days.

Some 20,000 people a day visit the Sands Bethlehem Casino and Resort, opened in 2009, and its attached outlet mall. Other attractions include ArtsQuest, a theatre and arts venue and home to the local PBS television studios, and SteelStacks, which includes the Bethlehem visitors center and part of the original Bethlehem steelworks, elegantly rusting and dominating the skyline.

This summer SteelStacks unveiled the repurposed Hoover-Mason Trestle, an elevated walkway that runs the length of the remaining mill, linking SteelStacks to the casino. (The trestle was once used to deliver ore from adjacent yards.) The newly opened passage includes plantings, benches, and signs explaining the history of the site, of Bethlehem Steel, and of the city—it very much resembles the High Line in New York City, which runs along the west side of Manhattan, also on a long-abandoned, limited-use rail line.

The entirety of the new Bethlehem is being repurposed and recycled, like steel itself. Steel companies are also recycled, though not as easily and often not without a loss in quality. The assets of Bethlehem Steel Corporation were sold off in 2003 to International Steel Group, itself an iteration of LTV Steel, a Cleveland steelmaker that also went bankrupt during the last steel crisis.

Eventually International Steel Group was acquired by Mittal, which then bought Arcelor to become ArcelorMittal S.A., headquartered in Luxembourg, and now the largest steelmaker in the world. ArcelorMittal USA owns Lehigh Heavy Forge, still in operation in Bethlehem, and the final extant part of the old steel plant there—it's situated due east of the Sands casino.

The potential impact of a new steel crisis on Bethlehem would be minimal; the city has moved on, as have many other Rust Belt, NAFTA, and post-NAFTA manufacturing cities—willingly, but mostly not.

The introduction of casinos, arts and entertainment centers, and tourism industries are common solutions for cities desperate to stem an economic slide, as is the building of prisons. The fickle luck of a new casino can sometimes turn up snake-eyes, however: Note the recent struggles of Atlantic City, New Jersey, or another steel town, Hammond, Indiana, where the casino model worked for a while before dwindling revenues started plunging the city into debt.

“Nothing is guaranteed,” Donchez says, referring to Bethlehem's strategy. Something had to be done with the old Bethlehem site, and, for the past six years, he notes, the Sands casino has provided more than 2,000 jobs for Bethlehem and the Lehigh Valley.

The Sands Bethlehem, meanwhile, is an entertainment magnet not only for tourists but for area residents as well, including former Bethlehem steelworkers. Search the paid obituaries of local newspapers and there one will find the testimony of many survivors of deceased steelworkers; often they'll state that their loved ones found much joy in retirement at the slot machines and roulette tables at the Sands.

The day I visited Bethlehem this past summer the Sands was doing a brisk business, mostly from older gamblers but some younger ones too. The ceiling above the main casino floor resembles the inside of the abandoned No. 2 Machine Shop across the parking lot; the exterior of the Sands building, at the main entrance, features structural steel I-beams like the one that appears on Bethlehem's old corporate logo. The shape of the main Sands tower, however, recalls for me the architectural shape of a steel minimill—the sort that drove Bethlehem Steel out of business.


It's not an uncommon practice to preserve blast furnaces for tourism, educational, or aesthetic reasons. The Carrie Furnaces outside Pittsburgh, site of the landmark Homestead Labor Strike of 1892, for example, have been preserved for precisely that purpose. (No word yet if the U.S. Steel furnace in Fairfield, Alabama, will be preserved.) And it's easy to see why visitors are captivated by decrepit old steel mills. I walked the Hoover-Mason Trestle in the early evening of a 90-degree day, from the Sands casino to SteelStacks, and the disused structures are indeed oddly satisfying to look at in the changing light.

That satisfaction also explains for me the relatively recent phenomenon of post-industrial-ruin photography, or “ruin porn.” But a tourist can quickly get caught up in the sentimentality and stimulation, the myth of American superiority, the false histories, and forget that that place in Bethlehem was where regular people worked and some died, engaged in a very dangerous occupation.

No one knows how long that type of nostalgia can remain a commodity, nor how long the steel industry on the whole will retain its potent charm as a political symbol of U.S. industrial vigor. Steel is still an important American industry, employing 160,000 workers nationwide, but I get the impression some steel companies have lower expectations these days and would be satisfied with profitability and relevance—they no longer expect the dominance once embodied by Bethlehem and its chief rival, U.S. Steel. And a lot of blue-, white-, and pink-collar workers are likewise lowering expectations. Many might be happy with a halfway-decent, steady steel job somewhere, anywhere—even without the generous union benefits won by the souls who long ago plied their trade on and beneath the Hoover-Mason Trestle.