It was soon clear that the industry's problems went far beyond imports. Trautlein had closed dozens of plants, trimmed the work force by more than 50,000 people and tried to replace a culture of entitlement with one of productivity.
He tried to modernize the plants and diversify the company by buying nonsteel operations, such as Kusan Manufacturing Co. of Nashville, Tenn., a plastics maker that could help boost Bethlehem Steel when steel faltered. He cut The Steel's payroll by 40 percent, while nearly doubling the tonnage production per worker.
The company still lost $1.7 billion, and its future looked even more tenuous than when he arrived. By his sixth year at the helm, Trautlein was worn out and despised by many of his workers. His predecessors had moved about Bethlehem like royalty commanding police escorts to daily golf outings and setting off the panic of workers ordered to have the elevator waiting for them but Trautlein was no longer even comfortable at the Saucon Valley Country Club, an institution for The Steel's executives since the early 1920s.
In 1986, Trautlein and Bethlehem Steel's board decided it was time for a change. It was time to try to end an era of pain and begin a new one of healing. On the same unseasonably hot April day that Bethlehem Steel posted a record 14th quarterly loss in four years this one $91 million it announced that Trautlein would step down as chairman in May.
He had already turned over day-to-day control of the company to President Walter Williams, and this would complete the transition. Wall Street barely acknowledged the change, as the company's stock remained level, but on the plant floors where 37,000 workers were trying to hang on to their jobs, there was widespread celebration.
Williams had dutifully worked closely with Trautlein, supported his moves and defended his cuts as necessary, but in the eyes of the workers, he was the anti-Trautlein. Unlike his predecessor, Williams had arrived at Bethlehem Steel in 1951 as a member of its ''Loop Course'' for management trainees and spent more than three decades moving up in the company. Unlike Trautlein, the numbers man, Williams was a straight-talking, roll-up-your-sleeves engineer who spent virtually all of his career in operations or shipbuilding. He'd helped design Burns Harbor, Bethlehem Steel's most profitable plant.
He knew steel, the workers rejoiced. He was the perfect medicine for a demoralized work force.
''When the surgery is over and the cancer has been removed, the patient usually goes back to their general physician,'' says Davis, the former company assistant vice president who went on to represent The Steel's Retired Employees Benefit Coalition. ''The surgeon's work was done. It was time for Walt Williams to guide the patient through recovery.''
That meant returning to its core product, Williams declared almost immediately. With the company cash-strapped and facing bankruptcy, he continued an asset sell-off started months earlier by Trautlein and expanded it by deeming everything that didn't involve making steel even the vaunted Martin Tower for sale.
Within months, the company raised $386 million with the sale of several Bethlehem Steel subsidiaries, including Georgia-based steel product distributor J.M. Tull Industries and plastics maker Kusan, which together netted $16 million in an otherwise dismal 1985.
Almost as if Bethlehem Steel's new chief executive had waved a magic wand, the red ink turned to black. The fourth quarter of 1986 brought net income of $34 million and was the first of what would be four consecutive years of profits. Williams, the guy who knew the sweat that goes into making a steel beam, was a hero to some workers.
By 1987, nearly a decade of payroll trimming, more efficient production and the end to extravagant spending, such as funding Suite 310 and lump-sum golden parachutes for executives, was starting to improve the bottom line. The continuous casters Trautlein built at Burns Harbor and Sparrows Point for $500 million were beginning to pump out profit-making steel. The state-of-the-art casters allowed workers to shape steel directly from its molten form, eliminating the need for large, expensive mills for rolling ingots into slabs and bringing Bethlehem out of the dark ages of steelmaking. Even the bankruptcy rumors that had dogged the company for nearly a year were starting to wane.
But Bethlehem Steel's fleeting resurgence also was the result of a strong national economy and the misfortunes of its competitors.
The nation's largest steel producer, U.S. Steel, wasn't producing steel during a six-month work stoppage. LTV, which acquired Republic Steel and Jones & Laughlin Steel and toppled Bethlehem as the second largest producer in 1984, was struggling to reorganize under Chapter 11 bankruptcy. Wheeling-Pittsburgh and Kaiser Steel companies were also mired in bankruptcy.
The national economy was picking up. People were buying cars again, investors were building office complexes and demand for steel was rising after a sharp decline in the first half of the decade.
Most important, a weak dollar compared to foreign currency was making American steel a better buy internationally. What government trade quotas and tariffs couldn't do, a strong economy and a weak dollar did almost overnight. Imports that made up 26 percent of the steel consumption through the mid-1980s plummeted to under 18 percent in the late 1980s and early '90s. Steel prices spiked by 10 percent, and Bethlehem was profitable once again. Between 1987 and 1990 the company recorded $830 million in profits, including a record $403 million in 1988.
Forging America: The History of Bethlehem Steel - Chapter 8
Bethlehem Steel Graphic Banner: Chapter 8