An article in the July 4th New York times “Today’s Titans Can Learn From Fall of U.S. Steel” includes the following:
“This week the decline in importance of U.S. Steel was illustrated by the fact that it went all but unnoticed when the company was unceremoniously removed from the Standard & Poor’s 500-stock index. By the time it was kicked out, U.S. Steel’s stock market value was lower than that of any of the other 499 companies. That value, $3.8 billion, was about 30 percent less than in 1959 — and that does not take inflation into account.
“The United States economy is no longer so dependent on heavy manufacturing, a development that would have taken place even if the men running U.S. Steel had far more foresight than they did. But they might have coped with it far better than they did. They might have found a way to better use newer technology that enabled companies like Nucor, which remains in the S.&P. 500 and whose market value is four times that of U.S. Steel, to prosper making steel.”
Arlen Specter had been elected to his first term in the U. S. Senate (he ultimately served five terms) in November, 1980. I had been his statewide finance chair and played a prominent leadership role in his campaign. We stayed in touch on matters of public betterment and on Field family social occasions. I sought no political or business benefits from the relationship…then or ever.
In November of 1981 Arlen approached me with a request: Would I research the future of the steel industry in Pennsylvania and submit a paper containing prognostications and recommendations.
Although laden with business responsibilities, I was pleased to take on such an assignment. I decided that our family vacation at a Club Med in St. Moritiz , Switzerland would be an ideal time to work on the matter while wife and three teenagers were out on the ski slopes. (One broken leg had been enough to dissuade me from downhill skiing although I did do cross country.)
The St. Mortiz vacation was by far the most interesting and enjoyable of a life time. The resort hosted convivial adults from the four corners of the world. Moreover, unlike Americans, in large part they were well educated and interested in world events.
I vividly recall introducing a young couple from Lebanon to a young couple from Israel and the Lebanese male requesting of the Israelis: “Would you please get your soldiers out of my country.”
I had the extraordinary good fortune to meet an economist who had recently retired from a high position with the World Bank. We discussed the world wide steel and coal industry about which he was very knowledgeable. With his tutoring in addition to independent research I was able to produce a paper of about twenty pages and early in the new year I presented it to Senator Specter.
Among the observations were: The major steel companies in Pennsylvania were in accelerating decline due to depletion of iron ore deposits in Michigan, the introduction of micro-steel mills with new technology and concentrating on highly profitable specialty steels, and growing competition from cheaper imports.
The paper included several recommendations, including turning national policy from trying to sustain the over bloated, multi- purpose mills such as U. S. Steel, National Steel and Bethlehem Steel in Pennsylvania to encouraging development of much smaller, more modern, and specialized steel producers.
Of course it would be naïve to expect the junior senator from Pennsylvania to embrace such an approach. It is not that surprising that I never heard back from Arlen concerning the paper… Not even a word of appreciation for all the time and effort I had put into the project.
