Bethel Steel

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Category: Business and Industry

Date Submitted: 02/15/2011 01:38 AM

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Bethlehem Steel Corporation was one of the largest steel companies. Consider Bethlehem the Goliath of the country’s most powerful and historically important industries. Bethlehem Steel was founded the Lehigh Valley area of Pennsylvania by Robert Sayre and John Fritz. Bethlehem Steel was essential in the production of bridges, skyscrapers, dams, and railways nationwide.

The union had a major effect on Bethlehem Steel. The union was the median between laborers and managers and ultimately enhanced the work conditions, and increased benefits for laborers. President Nixon approved laborers to have a 41 cent wage increase, extensive pension packages, and ample vacation time. Bethlehem felt the cost of these benefits could be afforded through increasing the price of steel. This later on became a huge liability when paying out for retired workers pension, and medical benefits packages. However, while they increased their prices other companies developed less cost, inexpensive steel alternatives. The emergence of mini mills slashed the growth of Bethlehem. In the late 1960’s, the World Trade Center was built using foreign steel, and symbolized the beginning of the end of Bethlehem Steel. Many companies saw the success of this alternative and took advantage of it. Many factors led to the demise of Bethlehem Steel. The lack of investment in research and design disabled them from keeping current the newer more efficient operations practices. Upper management became complacent, gradually decreasing the amount of time, effort, money reinvested back into the company. Overall, nobody was solely responsible for the demise. A collection of management, unions, the declining market and changes in technology were imperative to their failure.

Bethlehem Steel could have survived much longer if they invested more into the company’s future, rather than relishing in the moment of success. Being an industry leader, their competitive advantage could have been used when developing newer,...

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