PGHIMC - Pittsburgh Independent Media Center

US Steel chairman makes millions from dumping Marathon stock
by John Lacny Thursday, Mar. 06, 2003 at 12:49 PM

Usher makes millions while steelworker retirees get screwed

Twenty years ago the steel companies systematically abandoned the Pittsburgh region, producing a crisis that led to the loss of some 120,000 jobs in manufacturing (which included not only steel but related industries, as well as electrical manufacturing, which around here meant Westinghouse). That's a hit from which this region has never fully recovered. Many people have responded by simply leaving, which is a major reason why the state of Pennsylvania is second only to Florida in the percentage of its population over the age of 65 -- there are lots of retirees who can collect Social Security and (for now!) relatively secure union pensions from the days of the steel mills, but there are few opportunities for younger people. And even though the worst of the crisis was in the early to mid-1980s, it continued into the 1990s.

Allegheny County, which contains Pittsburgh, lost 54,783 people between the 1990 and 2000 census -- the third-highest loss in absolute terms of the 3,141 counties in the country. Yet looking at Allegheny County alone masks just how serious the ongoing regional stagnation is. If, instead, one looks at the Greater Pittsburgh Metropolitan Statistical Area (MSA), which inludes Allegheny County and the surrounding counties of Beaver, Butler, Fayette, Washington, and Westmoreland -- all of which were once not only national but world centers for either steel production or for the related industry of mining -- we see that the aggregate regional population loss was 36,116 people, which is the worst of 280 MSAs around the country and in fact twice as large as the next-closest MSA in population loss (which is Buffalo-Niagara)!

In other words, not a pretty picture. Twenty years ago, when it was all happening, there were efforts like that of the Tri-State Conference on Steel to employ eminent domain power to keep steel production here by taking over some of the abandoned mills and running them in the public interest, but eventually municipal governments rejected the idea as unfeasible given the difficulties of obtaining suppliers and customers and otherwise competing with the giants like U.S. Steel. The USWA and rank-and-file steelworkers also demanded that the company at least reinvest in its ageing plants in places like the Mon Valley rather than abandoning the area altogether, but were only able to extract promises from the company with regard to a couple of places -- specifically, the Edgar Thomson Works in Braddock and the more high-tech Irvin Works in West Mifflin. But while those mills stayed open, there were far fewer jobs at both, not to mention the fact that thousands of jobs were lost at the outright closure of plants like US Steel's Homestead works or the J&L (now LTV) works on the South Side of Pittsburgh.

Instead, US Steel signaled that they weren't much interested in the steel business anymore anyway, and embarked on diversification efforts, chiefly by buying Marathon Oil. Especially after the union had agreed to concessions in the hopes of keeping the plants open, this was the ultimate symbol of the company's betrayal in the eyes of many steelworkers.

Last year, US Steel -- which had changed its name to USX after acquiring Marathon -- became US Steel again by dumping Marathon. What with the widespread crisis in the steel industry in the USA, US Steel chairman Thomas Usher took a pay cut. An article in today's Pittsburgh Post-Gazette, however, points out that Usher made up for that by the money he pulled in by unloading his Marathon stock and stock options.

Meanwhile, US Steel is reluctant to buy up failing smaller steel companies (for which it is competing with other "lean and mean" steel companies like the vile AK Steel) unless it does not have to pick up "legacy costs" -- which in practice means that retirees who put in decades in the "dark satanic mills" are now losing their health benefits.

By the way, I heard that the rest of the world hates us because of our freedom.

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