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Closing up bars and closing up shop on Monongahela.

David Ignatius, who wrote a pioneering article in the Monthly on the fall of the steel industry in 1979, wrote this summary of his findings in 1988

Steel in the old days wasn't simply an industry, It was an entire culture, an all-American social system that produced an utterly disastrous outcome in which workers didn't work, managers didn't manage, and an entire industry slid year by year toward disaster.

On the union side the tragedy began with the United Steelworkers's first president, Philip Murray, whose views were conditioned by the bitter struggle to organize low-paid steelworkers in the 1930s. Though he was initially interested in labormanagement cooperation schemes, Murray decided that the union's job was to raise wages and fringe benefits, rather than to participate in the larger task of running the enterprise for the good of all.

The union succeeded beyond Murray's wildest dreams. By the early 1980s, American steel workers were the best-paid industrial workers in the world. From 1967 to 1979, total hourly employment costs in the industry rose at an annual rate of 12.1 percent-while the industry's production grew barely 2 percent a year. When this cozy, anticompetitive world was punctured by lower-cost foreign steel, the union had only one answer: import barriers.

Managers made a series of foolish strategic decisions: they continued to build huge open-hearth furnaces in the late 1950s, after other countries began to adopt the more modern oxygen-furnace technology; they spent vast sums to produce "pelletized" iron ore from their North American mines (which were no longer producing high-grade ore), rather than import foreign iron ore at about half the cost; and they vastly overestimated (by as much as 100 percent) the demand for American steel during the 1980s.

Worst of all, says John Hoerr, author of And the Wolf Finally Came, was the poisonous relationship that developed between workers and management, especially at the industry's largest company, U.S. Steel. He quotes one steelworker explaining the decline in morale: "In the 1950s, it was a pleasant place to work. . . .The people in the personnel office spent their lives there and knew workers personally." Then, in the 1960s, "the company brought in college grads as supervisors and sometimes paid them more than the general foremen who had come up the old way. This helped destroy working relationships. In the early 1970s, they began hiring attorneys to run personnel services. Most of them used it as a stepping stone and became tough bastards. 'If you want something, arbitrate!' they told us."

In this climate of bitterness, workers lost any remaining concern for the efficiency of the enterprise. Recalling his own summer jobs in the mills as a young man, Hoerr notes that "on the night turn, 11 p. m. to 7 a. m. , more people may have been sleeping in National Tube than in all the hotels of McKeesport. It was a mark of esteem, the 'macho' thing of the day, to brag about sleeping on company time."
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Article Details
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Title Annotation:Making America Work; steel industry
Author:Ignatius, David
Publication:Washington Monthly
Date:Feb 1, 1989
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