Bethlehem Steel Collapse Leaves Retired Workers Scrambling for Benefits (95,000 people)

Miami Herald ^ | Sun, Feb. 09, 2003 | DAVID B. CARUSO

[A Patriot Son]

Bethlehem Steel collapse leaves retired workers scrambling for benefits

(AP) Sun, Feb. 09, 2003 BETHLEHEM, Pa. - Some of them went to work in the blast furnaces when they were just 18, then spent half a lifetime handling molten slag and inhaling steel dust in some of the most dangerous jobs on earth.

But for the tens of thousands of Bethlehem Steel workers who stuck it out, retirement brought a rich reward: a hefty pension and a lifetime of almost free health care for themselves and their families.

"It was capitalism's version of socialized medicine," said James Van Vliet, a retired Bethlehem Steel vice president. "And it was an implied contract. It was the company and the workers saying, 'We are going to take care of each other.'"

It may go down in history as a promise unfulfilled.

Bankrupt and only a shadow of its former might, Bethlehem Steel on Friday announced it was seeking bankruptcy court approval to terminate health and life insurance benefits for 95,000 retired workers and their dependents on March 31.

The move, seen as essential to the company's bid to sell its assets to International Steel Group, followed news in December that Bethlehem Steel's pension plan was underfunded by $3.2 billion and would be turned over to a government agency.

Both pieces of bad news were expected. The American steel industry has been in decline for decades, and most of its former giants have been trimming pensions and benefits for retirees for years.

But the one-two punch is still a staggering blow for a generation that had been promised a lifetime of comforts in return for a career spent at one company.

Now, some are facing the prospect of seeing their monthly $6 payments for health insurance jump to between $200 and $300.

"That's a lot to swallow," said Len Christman, 67, who worked 39 years at Bethlehem Steel's sprawling plant in Bethlehem, about 40 miles north of Philadelphia. "It's a very tough position to be in at this stage in life."

Nearly all retirees will continue to enjoy some benefits. Pension payments, which are being taken over by the Pension Benefit Guarantee Corp., are expected to continue at about 90 percent of their former level. For workers over 65, the federal Medicare program will pick up some health care costs.

But Medicare, which covers hospital visits, but doesn't pay for medications, won't come close to covering all the health problems suffered by many retired steel workers.

Joe Pancoe, who worked for Bethlehem Steel for 31 years, said that at 81, he has asthma and a hacking cough, and uses a slew of pills and inhalers to soothe his battered lungs.

"We, the old timers, were part of the industrial revolution. And now, we are part of the medical revolution. We have the emphysemas, we have the cancers. We have everything," he said.

He isn't positive his illnesses were related to his work as a spray painter in the plant's fabrication division, where he said his spit turned red from inhaling fumes, or in the research lab where he regularly handled bags of asbestos.

But as he sees it, the country owes him something either way. His labor built propellors for battleships and girders for skyscrapers and bridges.

"We helped the country, and the people who helped to build the country should get the benefit of it," Pancoe said.

Almost all workers agree Bethlehem Steel is in little position to help. When it filed for bankruptcy in 2001, the company had about 12,000 employees, down from more than 300,000 during World War II. And most factories have been closed, including the one in Bethlehem. The company's board also voted Saturday to sell the company's assets to Cleveland-based International Steel Group, a deal that is subject to approval by the U.S. Bankruptcy Court in New York.

Bruce Davis, a retired Bethlehem Steel lawyer who now serves as legal counsel for the Retired Employees Benefit Coalition, said several labor groups are negotiating to at least temporarily extend health-care benefits.

The coalition has asked that the company continue health benefits until May 31, rather than March. It also anticipates that it will be able to offer Bethlehem Steel retirees a replacement health insurance package similar to ones offered to retirees at other bankrupt steel companies.

The hardest burden, Davis said, will be borne by retired workers who are under 65, and thereby unable to qualify for Medicare coverage.

"We need to find a way to get them to age 65 without bankrupting their financial portfolio," Davis said. "If we can do that, the pain of seeing this proud company walk away from them, after so many years, will be considerably lessened."

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On the Net:

Bethlehem Steel: http://www.bethsteel.com

[DoughtyOne]

Having been here for some time, I remember a bit of spamming from another squad that you're conveniently forgetting.

[hoosierskypilot]

fast nuclear war against China

That may not necessarily be true. If we were to go to war against another nuclear superpower, it might be limited to a protracted conventional war, purely to avoid a nuclear outcome.

[You Dirty Rats]

This is a tragic situation for these workers. It was the clear intention of the company and the union to provide for them. Unfortunately, intentions weren't enough.

The problem isn't the pending takeover. In a takeover, the new owners must assume the obligations of the old. For ecample, if you have a valid rental contract and the owner of the apartment sells the property, the new owner can't evict you without cause. This takeover, loke those of a lot of distressed companies, will happen AFTER bankruptcy discharges the obligations.

There are several problems in many of these old industrial companies. The basic problem is a decline in the worth of the assets. That forces these companies into bankruptcy.

Here's where the workers (unionized and otherwise)lose out. Pension plans are funded by the company -- the company puts money aside to earn investment income to provide for the retirees. Recently, the sharp decline in the stock markets has reduce the value of the pension plans and as a result, many are underfunded. However, the Federal Government insures the pensions, so the workers don't lose their benefits.

Medical benefits aren't funded and are not guaranteed by the Feds. If the company goes bankrupt, benefits stop since it is pay-as-you-go.

Why are pension plans funded and medical benefits not? Simple: the former are tax-deductable. That's why everyone's pension is funded and nobody's medical benefits are (in the corporate world, at least).

Unfunded promises may have been well-meaning, but they have been awful for a lot of good hard-working people. Lack of foresight on the part of company and union bosses have hurt everyone. Anyone who can't feel something for a hard-working tough old steelworker who has lost his medical benefits after a lifetime working in those hellish conditions has a tin can for a heart.

[sinkspur]

labor is such a small portion of the cost in steel that you would be a fool to believe what you just said.

Got any figures to back this up?

Labor is typically the largest cost in ANY industry.

[banjo joe]

When are conservatives going to realize that we have more in common with the worker-bees than the corporate beanbags that have no loyalty to the United States?

Excellent point. Part of the prob is that the corp elites hedge their bets by contributing (millions for tribute) to both parties within the framework of legal extortion employed by con-gress.

[DoughtyOne]

Agreed.

[lizma]

But we know that the real roots of these problems are our government's policies of allowing foriegn imports to come into our country tax-free while they tax, and regulate, and fine the living hell out of our American manufacturers, farmers, mining, and shipping concerns and other producers.

I think this only partially true.

I grew up in a steel mill family, constantly hearing stories of workers (very, very well paid worker) loafing off, sleeping through shifts and protected by the union.

I was just a kid when I figured out the stuff will eventually hit the fan. The union demanded/allowed high pay, poor productivity and eventually assisted in their own workers demise.

[hoosierskypilot]

Just wondering why the workers didn't ever put plans in place

Old timers like these lived in a time where there was such a thing as honor and integrity in America. Contracts were made with a handshake. You left your doors unlocked. They took pride in their work. And "made in the U.S.A." meant something.

[MonroeDNA]

"Having been here for some time, I remember a bit of spamming from another squad that you're conveniently forgetting. "

Having been here for some time, I'm not sure who you are referring to.

[Mulder]

The gov't taxes corporations at 30%.

They tax workers at 40%.

They tax investors at 20%-30%.

They tax imports at 0% or close to it. In those cases where it's not 0%, they want to pass laws to make it 0%. Not only that, there is a good chance they are subsidizing the foreign company in one way or another (technology transfer, direct foreign aid, loans, etc....)

The democrats tell us our tax rates should be 1% or 2% higher. The republicans tell us they should be 1% or 2% lower. But both parties (at the top) think there should be no taxes on imports.

What is wrong with this picture?

[codercpc]

Actually, I don't want to get into a flame war. I just wanted to point out that just because some jobs pay in benefits as opposed to extremely high wages, these people are not part of a socialized system. By the way, we have been married for 15 years, and the first year of our marriage, combined income we made just over $11,000.00.This was in 1987, not exactly the dark ages. You see my husband was a Private in the Army, and we lived in a town that was extremly hesitant to higher military wives (they tend to move) so I worked a couple of part-time minimum wage jobs.

Don't play who works harder. Have you ever lived for two weeks on Ramon Noodles (only 15cents a package on sale) because you couldn't risk even bouncing a check to pay for groceries. If my husband bounced a check he not only got in trouble at the bank, he had to face his seargent the next day.

So you see sir we all have our stories. All I am trying to say is that sometimes things like health insurance are part of a wage package and not a free ride.

[DoughtyOne]

Nothing if you want to kill the golden goose.

[DennisR]

Amen! There were two sets of idiots here: those running the company for thinking they could provide Utopia, and those thinking the world owes them a living. Whoever in their right mind would think that charging $6 a month for benefits which costs probably hundreds a month is reasonable?

Then there's the guy that says this is a tough position to be in at this stage of life. Cry me a river, dude. How much of your salary did you save for your retirement? If you planned ahead and saved a bunch, my commendations. But you should have done that anyway. Why would you depend on promises that may or may not be fulfilled and that depend on the continued financial success of any particular company? Companies--big ones--go out of business every day.

But whiner of the day in this article goes to Joe Pancoe, who apparently thinks the world owes him a living. (Odds are 100-1 that this guy votes for every Democrat/Socialist/Utopian/Communist that makes the ballot.) Joe, are you saying YOU did not benefit from all your years at a high-paying job given to you by a union that eventually destroyed the steel industry in this country? What percentage of your salary did you save every single month after your kids were grown and out of the house?

[banjo joe]

They are stuck shopping at Wal-Mart for the cheapest garbage they can afford.

Oh, man. Nailed it. ouch!

[TheSpottedOwl]

They should remember that assume begins with ass. They assumed they'd be taken care of by some one else. They assumed wrong. Pretty harsh post. Remember that Mr. Pancoe is 81 years old. Back in the day, someone's word was a bond. The workers were promised certain benefits in exchange for giving their productive years and loyalty to the company. Us youngsters know better...

[hoosierskypilot]

You're exactly right. This corporate cannibalism reached its zenith in the 80's when smaller corporations were taken over by larger companies. Then, often, the smaller companies were sold for parts and a tax break.

Thousands of workers lost jobs in that era.

[Mulder]

Nothing if you want to kill the golden goose.

Only by "killing the golden goose", can America be merged with the coming global goverment, which will be run by the elites in both government and corporations.

[DoughtyOne]

No it's not great if you a septigenarion. This government must remain solvent. And while you and I know that, it couldn't seem to care less. It's policies are preventing growth. It's stagnating our economy. It is driving capital away from our nation and setting us up for one hell of a fall. If don't turn things around, we are not going to be able to service our defense, welfare and debt. It's that simple. And if we're not careful, out elderly are going to be jetesoned into the no-healthcare zone without a prayer.

[A Patriot Son]

No....Bethehem closed down mills because the United States government spent billions of US citizen's money building modern steel plants with American technology for Japan and Germany and South Korea and Russia and other countries after World War II and beyond and allowing them to ship steel here tax-free or at very low tarrifs. And the US government transfered massive amounts of technology to these country(as it does with China an an ever-accelerated pace now). And the US government repeatedly allowed these countries to violate our anti-dumping laws in their successful attempts to put American producers out of various sectors of the steel market.

International Socialism by the US government is what has destroyed most our steel industry. And it continue to destroy what is left of it at the exztreme risk to our economy and our national security.

-----------------

**Last year the US government via Congress sent hundreds of millions of dollars to the Asian Export/Import Bank to build three massive modern new steel plants in China to help destroy our steel industry.

[Mulder]

Whoever in their right mind would think that charging $6 a month for benefits which costs probably hundreds a month is reasonable?

I wonder how many days these steelworkers worked for only $6 dollars an hour?

20 years ago, $6 dollars was a lot different than today.

If the company failed to put inflation measures into their plan, that's their problem, not the retired workers'.