Sparrows Point Steelworker historyUpdated September 10, 2012
Sparrows Point, a promontory jutting into the Chesapeake Bay, or the lower Patapsco River - depending upon your sense of geography-- east of Baltimore, MD, was named for Thomas Sparrow who received the land as a grant from Lord Baltimore in 1652. In 1887, Frederick Wood, working with an industrial combination of The Pennsylvania Steel Co. and the Bethlehem Iron Co., began the construction of the enormous works that would first become Maryland Steel and subsequently Bethlehem Steel. From its opening in 1890 until today, the works have been a major industrial producer and employer in the Baltimore area. In the 1950' s, Sparrows Point was the largest steel mill in the world, with a bargaining unit of more than 31,000 workers.
Constantly reworking their relations with the company, the steelworkers at Sparrows Point erected their own mighty civilization, spreading from the workplace into the families and communities around Sparrows Point. The company town of Sparrows Point grew as part of the original mill but was bulldozed over several decades until it finally closed in 1975 to provide room for the construction of the ' L' furnace. Local historian Elmer Hall has created a marvelous historical memory of the townWorkers also came to The Point from the Dundalk community (where one campus of The Community College of Baltimore County is located), into segregated adjacent neighborhoods like Turner Station. Watersedge, Edgemere and Fort Howard, into the eastern neighborhoods of Baltimore City, like Highlandtown, or into west Baltimore communities like Edmondson Village, eventually into the Baltimore suburbs, steelworkers and even into southern Pennsylvania, extended their workplace family over many generations. The increase of work at The Point also reflected many ' great' migrations, of black workers from the south and of white workers from rural areas or mining camps in West Virginia and central Pennsylvania.
Issues of company paternalism, unionism, civil rights, women's rights and political power were constant issues that this civilization had to deal with, especially after The United Steelworkers of America (USWA) were voted into Sparrows Point in September, 1941 and the workers developed collected power to challenge the company.The global economy, once such a triumph for the steelworkers at Sparrows Point who exported steel around the world, has become - as it has for so many US manufacturing workers - a catastrophe. In September, 2001, after reporting a loss of $ 1.2 billion for the year, Bethlehem Steel hired Robert ' Steve' Miller who promptly put the company into Chapter 11. On October 15, 2001, as part of the bankruptcy, the company dumped its pension liabilities on to the Pension Benefit Guaranty Corporation (PBGC), and cut off health insurance for all retirees and survivors, destroying a social contract that the union had created.
Eliminating these responsibilities - coldly called 'stranded costs' - made Bethlehem Steel an attractive prospect for corporate bottom-feeder Wilbur Ross, who created The International Steel Group (ISG) to scoop up a series of failing steel companies. In April 2003, Ross bought Bethlehem Steel for $1.5 billion, negotiating a controversial union contract with the USWA as part of the purchase agreement. This new union collective bargaining agreement
- gutted the Basic Steel agreement that had been in effect since the 1940's,
- collapsed 35 job classifications into 5,
- reduced vacation time,
- tightened discipline
- eliminated the defined benefit pension plan altogether,
- offered buy-outs to thousands of workers
True to form, however, Ross - described in The Baltimore Sun as 'a billionaire investor' (6/10/2006) flipped all of his steel companies within an 18-month period, and sold ISG in 2005 to global steel titan Lakshmi Mittal for a profit estimated at between $118-300 million. Mittal, the Indian president who lives in London and whose corporate headquarters is located in Rotterdam, was listed in 2006 as the world's fifth richest man by Forbes Magazine, Mittal now controls 40% of flat-rolled steel in the United States. In the summer of 2006, Mittal was desperately trying to stage a $23 billion hostile takeover the Arcelor Steel Company in Luxembourg.
True to form once again, Ross invested some of these profits into a new company, the International Coal Group (ICG), which bought up bankrupt coal companies, which had already - do you see a pattern? - dumped their pensions and health insurance for retirees. ICG owned the non-union Sago mine in Upshur County, West Virginia where, in January, 2006, 12 miners were killed by a cave-in while the nation stood a death watch, the worst mine disaster in West Virginia since 1968. Accident rates at the mine were 4.3 times the national average, despite Ross' claims that he never refused money for health and safety
Steve Miller also moved on, taking his special set of skills to the Delphi Corporation, an auto parts manufacturer, which he was trying in the summer of 2006 to head to bankruptcy as a method of dumping thousands of jobs in the United States.
The global economy has drastically changed the lives and expectations of the steelworkers at Sparrows Point. At one time, the USWA represented 90% of all steelworkers in the United States and had only one challenge: to be tough enough to beat the bosses in a mano a mano struggle. Now the Sparrows Point plant produces only 3% of Mittal's global steel production so bargaining is infinitely more complicated and dangerous as you see from this excellent article in The Baltimore Sun.
In 2006-07, a controversial law suit by the US Department of Justice directed Mittal to sell Sparrows Point to avoid a monopoly of tin-plated steel and in 2008. Russian steelmaker Severstal bought the mill for $810 million with promises for substantial investment and increased production and employment. It is a symbol for workers of life in the global economy that the plant, whose workers are intensely patriotic and whose union has supported the cold war for decades, was now owned by 'a Rooskie.'
Instead, the mill saw decreasing production, more outages and layoffs and was caught up in the global steel decline, as well as financial problems that Severstal encountered in Russia.
In March, 2011, RG Steel, a division of the Renco Group run by Ira Rennert, whose worth was listed by Forbes Magazine in March, 2012, at $5 billion, bought the mill from Severstal, also with loud noises about increasing production and employment. A little more than a year later, a year filled with bitter conflicts with the union, bad debts to hundreds of suppliers, and general mismanagement, RG Steel filed for bankruptcy and effectively closed the mill.
In August, 2012, the bankruptcy judge in Delaware approve the sale - often described as a 'liquidation' - of Sparrows Point, and several other RG-Steel properties, to a mysterious conglomerate of Hilco Trading and Environmental Liability Transfer for the incredibly low bid of $ 72 million. This company agreed with the Steelworkers not to begin to dismantle equipment so that a potential new steel company could be found to buy and reopen the plant. An article in The Baltimore Sun on September 9, 2012, however, described related manufacturers who wanted to dismantle and move their equipment on site at The Point, further jeopardizing a sale and possible restart. Official figures for employment at The Point were 1,975 and the future looked gloomy. Union meetings were held with state officials about benefits like unemployment and Trade Adjustment Assistance and each worker was making individual calculations about their futures - wait for a new owner and recall, look for other work, retire?
The global economy has drastically changed the lives and expectations of the steelworkers at Sparrows Point. The bankruptcy and sale of Bethlehem Steel in December, 2003, was a fault line in the life of every steelworker and retiree from Sparrows Point. Bethlehem Steel was the only employer most of these steelworkers ever knew, so its decline, bankruptcy, sale and revival threw their lives, the lives of their families and retirees, and the lives of the community, into depression and turmoil. Many of them compared their lives to a roller coaster ride.
The expectations of the workers were dramatically changed and the economy of the United States, and especially of eastern Baltimore County, will never be the same. The excellent story by Jamie Smith-Hopkins describes the ripple effect.
For current workers, it was easily possible to make almost $100,000.00 per year, since double-shifts and continuous work are common. Now the future - the ' roller coaster' as many workers call it - looks uncertain.
Life, they all say, as if in a refrain, will never be the same.
As the industry changes and the workers at Sparrows Point are tossed around, the most accurate current information can be found on the web site of Mark Reutter' s Making Steel, or in his blog at Baltimore Brew even if his opinions are often challenged by officers of the Steelworkers.The greatest controversy is: what happened to kill The Point? Was it Bad management by the various owners, especially the refusal of Bethlehem Steel to invest in new technology
- Greedy union members who took all they could get and were lazy and inefficient
- A lack of a national industrial policy in the US
- The growth of the global steel market so that many other countries, like China, Brazil and Russia, have high-tech steel mills
- The Consent Decree, which placed allegedly incompetent workers in higher positions
- The failure of local and state politicians to support The Point, advocating instead for high tech industries