Ghosts in the Machines

Magazine: Photo Essay

By Emily Singer
January/February 2012

Bethlehem Steel, once a symbol of American industry, went bankrupt in 2001. These photos help us imagine its glory days.
Photographs by Jeremy Blakeslee

Bethlehem Steel was once a symbol of American prowess in industrial manufacturing. One of the country’s largest steel producers, it supplied ships and guns for wartime, created steel beams for the first skyscrapers, and ushered in an age of mass production. Steelmaking at its main plant in Bethlehem, Pennsylvania, continued for nearly 150 years, until 1995.

In the heart of the Lehigh plant, in Bethlehem, Pennsylvania, five blast furnaces smelted iron from ore in the first phase of the steelmaking process.

145 Days Ago
12/28/2011

US Steel Industry

The demise of the US steel industry started back in the 1960's from several directions. When the economy was growing management did not invest in new technologies that Japanese, German and other firms were doing; therefore, they dropped behind on the technology front. Second, unions jumped on the opportunity to obtain increased wages and benefits from the increased profits which management was not using to upgrade its plants. And third is that Congress gave industry accelerated depreciation which helped to create inflated profits which should have been used to replace depreciated technologies rather than to pay higher wages and benefits and dividends.

Therefore, we can see that with unnecessary tax incentives both management and labor acted in very short term manners. One would think that a 150 year old facility would have been wrecked and a new facility using updated technology would have been built if not for government interference with tax intervention. Let's take the tax code out of financial and other corporate decision making. The market is a much better way of determining which companies and industries will survive.

145 Days Ago
12/28/2011

Just for the record, I believe that a tax incentive like accelerated depreciation is reflected on a corporations tax records, but NOT the GAAP Income Statement. It would also increase a companies cashflow but it would not result in higher earnings.

This is very common accounting practice which results in the deferred tax liability you see on most balance sheets.

140 Days Ago
01/02/2012

@ DrZookzook

If your comment reflects the kind of thought process that is guiding mainstream economic thinking in the US then its no wonder the economy is in crisis. Your evidence contained in the first paragraph identifies short termist thinking by industry and unions, exacerbated by Government measures (I expect lobbied for by the same short termists in industry). It is the unfettered market which drives short termist thinking and contributed greatly to our current troubles, yet your conclusion is to free the market further. Markets left to themselves implode, because long term, sustainable practices are not sufficiently rewarded in the present, in fact are often actively disincentivised. The right regulation is necessary to compensate for this flaw.

137 Days Ago
01/05/2012

The point I was making is that accelerated depreciation is for taxes and doesn't inflate profits. This is a mute point since the company was bleeding money anyway, which is the real reason they couldn't invest in new facilities. Your blaming of short-sighted management is also absurd. Steel is a commodity industry. The only strategy that works is to be the low cost producer of the commodity. In this case foreign steel was cheaper even with shipping. The industry structure doomed the steel business in that era. No management team could have suceeded.

96 Days Ago
02/15/2012

Blast Furnace A

The photo shows a furnace that was built in 1915, and is described as the only remaining furnace of its kind in the United States. I don't know how unique its design is, but it looks remarkably like the furnace I've seen and photographed at Sloss Furnaces in Birmingham, AL. Today Sloss is a national historic landmark, a museum and a popular site for community activities such as concerts. See www.slossfurnaces.com for more info.