Bethlehem Steel

Bethlehem Steel Corporation is the second largest steel producer in the United States, with control of supply sources, production, and distribution, from raw materials to a wide variety of steel mill products. Also a long-time repairer of ships and offshore drilling platform businesses and manufacturer of forgings and castings, Bethlehem had curtailed many of these activities during the late 1990s. The company is the nation's number one supplier of steel to the domestic construction industry, as well as a major supplier for railroads and automobile companies. It manufactures almost ten million tons of steel annually, a tenth of the nation's supply. The company began operations in 1857 as the Saucona Iron Company in South Bethlehem, Pennsylvania. Its primary business was the rolling of iron railroad rails. In 1899, after broadening the product line to include heavy forging for electric generators, tool steels for metal cutting, and armor plate for U.S. Navy ships, the company's name was changed to the Bethlehem Steel Company. Bethlehem Steel was incorporated in December 1904 by Charles M. Schwab, a former Andrew Carnegie disciple and first president of United States Steel Corporation (U.S. Steel). Schwab left U.S. Steel over difficulties that he felt inhibited his freedom to run that company properly. At its incorporation the company included Bethlehem Steel, a Cuban iron ore mine, and several shipbuilding concerns in California and Delaware. Schwab became president and chairman of the board. Soon after the formation of the company, Schwab hired an electrical engineer, Eugene G. Grace, whose management skills allowed the more entrepreneurial Schwab the freedom he needed to plan the growth of the company. Together, the two men became the team that built Bethlehem from a small producer with an ingot capacity of less that one percent of the national total in 1905 to the world's second-largest producer in fewer than 35 years. In 1908 the two men staked the company's future on a new type of mill invented by Henry Grey. It was capable of rolling a wide flange structural steel section that was stronger, lighter, and less expensive than the fabricated steel sections that were being used at the time. The gamble paid off for Bethlehem. The wide-flange section made it possible to build skyscrapers and modern cities. In the years preceding World War I, the company acquired an interest in a Chilean iron ore mine with ore of a higher quality than available from the U.S. upper Great Lakes region. As a result of the acquisition, the company built a fleet of ore carriers and entered the ocean transportation business. With the outbreak of the war, Bethlehem became a business of international scope, building warships for Great Britain at the company's shipyards. Bethlehem also filled orders for guns and munitions, armor, and ordnance placed by the British, French, and Russian governments. In the process of contributing to the Allied cause in Europe, Bethlehem created a financial base that would help in expanding the company's steelmaking facilities. Grace was named president of the company in 1916, with Schwab staying on as chairman of the board. In that same year, bolstered by wartime profits, Bethlehem acquired American Iron and Steel Manufacturing Company, Pennsylvania Steel Company, and Maryland Steel Company. In the years following World War I, the company continued its growth with the acquisition of Lackawanna Steel & Ordnance Company, Midvale Steel and Ordnance Company, and Cambria Steel Company. In the years preceding the Great Depression, the company boosted its steelmaking capacity to 8.5 million tons and employed more than 60,000 people. During the 1930s Bethlehem acquired steelmaking plants in Los Angeles and San Francisco, California, and Seattle, Washington. McClintic-Marshall, a large fabricator and builder of bridges, was also purchased, enabling Bethlehem to participate in the construction of San Francisco's Golden Gate Br