Continuing the Company Cutbacks
In the eighties, Bethlehem Steel entered yet another
new era under the leadership of ex-Price-Waterhouse accountant Donald Trautlein.
His business style, combined with a continually shrinking market, destined
the Steel for downsizing that dwarfed "Black Friday" by comparison.
Upon his ascent to the position of chairman, Trautlein instituted a goal
of 5% annual staff reduction. As operating losses continued, he increased
his goal to cut 20% of the salaried workforce by the end of 1983.
This was soon made even more startling when he wanted the 20% cut by the
end of 1982. (147) This resulted in a reduction of employment
costs by $1 billion. (207) Yet Trautlein felt that even
that was not enough, moving on to many headquarters services. Cafeteria
workers were replaced by temporary help and the chauffeurs who were always
ready and waiting for the beckoning of top executives were removed.
The companyís prize-winning photography department was eliminated, along
with departments responsible for banking, travel, and newspaper clipping.
Subsidies to the many country clubs were stopped, except for the exclusive,
company-owned Weyhill club, which would be sold in the late Ď80ís.
Even remaining executivesí families were affected when Trautlein stopped
the company-paid security that guarded executive homes. (152)
Employment dropped exponentially from 115,000 at
the Steelís peak in 1975, to 83,800 at Trautleinís takeover in 1980, and
then down to 48,500 by 1984. (158) These were tens of thousands
of Lehigh Valley residents who lost their jobs, many of whom knew no other
work beside that at the Steel.. Jim Ross was given the job of creating
an outplacement service for these ex-employees. This temporary project
grew into a model for modern job counseling. As Time magazine noted
in its August 8, 1983 issue, Bethlehem was "the first major U.S. corporation
to develop a comprehensive program to deal with the emotional impact of
permanent layoffs." (155) Ross estimated that 50-60% of dismissed
steel employees found jobs within 90 days, though nearly all of them were
for less money. (158) In 1986, Walter Williams followed Trautlein
as chairman. He continued the cost cutting trend by selling non-productive
operations, quarries, coal mines, jet planes, and ore boats. (ix)
On the positive side, labor relations with the United Steelworkers Union
improved, as they worked to protect the rights of over 200,000 displaced
steel workers across the country. (xi)
By the mid-eighties, the people of Bethlehem were
well aware of the possibility that they could lose their steel mills.
The once constant roaring from the plant was reduced to a mere murmur,
and over half of the 5 mile long complex lay in abondonment. (224)
As an ex-Steel worker observed, "the days when you could say to your kids,
'Well, you can always get a job in the Steel Company,' thatís gone." (201) The company and the city finally realized what an ex-Steel
chairman confessed in 1982: "We now realize that American industry has
no manifest destiny to be always first, always right, always best." (204)