Complete History Part 4 Pittsburgh Steel Company Monessen Works, Monessen Pennsylvania
The honeymoon years of the Wheeling-Pittsburgh merger lasted from 1968 to 1974. The company completed its modernization program at Wheeling, and profits, if not large, were respectable. The Voluntary Restraint Agreement, renewed for two more years in 1971, provided some protection against imports. However, the real boost to steel came from the Vietnam War, which, along with a world-wide increase in demand, increased prices and strained the capacity of U.S. mills. An additional advantage came from the devaluation of the dollar, which, in effect, made foreign steel more expense. Even more heartening to steel's prospects was the signing of an innovative labor pact with the USWA in 1973, the Experimental Negotiating Agreement (ENA). Under ENA steelworkers and management agreed to forsake the strike and lockout and submit their differences in upcoming negotiations to arbitration. ENA guaranteed at least one year of uninterrupted operation, eliminated the de-stabilizing practice of hedge-buying, and promised to bring peace to a strike-prone industry.
Yet another piece of good news for Wheeling-Pittsburgh and the steel industry came in 1974, when the Cost of Living Council eliminated price controls on steel. For over a decade, steel executives, including former Wheeling-Pittsburgh president Allison Maxwell, had criticized federal cost controls—Nixon's outright regulation or "jaw-boning"—as a primary cause of the industry's weak competitive position. In 1964 Maxwell had warned that controlled prices, along with rising labor costs and imports, would strangle profits and prevent the industry from making the investments necessary to remain competitive. Heralding the change in federal policy, R. E. Lauterback, Wheeling-Pittsburgh's chairman, explained, "Now we're breathing clean air. This is the really the first time since 1962 we don't have some form of price control." Immediately, Wheeling-Pittsburgh, along with National and Armco, announced plans for expansion/modernization projects. Wheeling-Pitt disclosed that it had secured $108 million in financing for modernization, $60 million of which the company planned on spending on a new battery of Koppers coke ovens at Follansbee, West Virginia.
With full order books and pricing freedom, optimism was higher among steel men in 1974 than it had been in years. Yet, the anticipated prosperity and plant modernization did not take place. A global recession, triggered by OPEC-imposed increases in oil prices, began in 1975, shrinking the steel market, freezing prices, and leading to a revival of the import problem.1 Despite a profitable showing in 1975, the eight major steel companies reported combined losses totalling $230 million in 1976. It was the first time since the depression years of the 1930s that the industry had dropped into the red. Pittsburgh Steel's performance followed this trend. After reaping a small profit in 1975, the company lost $25.6 million in 1977. The problem was not sales volume, which remained constant, but higher costs. According to its new President and Chairman of the Board, Dennis J. Carney, the company was caught in a cost-price squeeze. In a public presentation before "Mon Valley Community Leaders," Carney, who had come to the corporation from U.S. Steel in 1974, outlined the steps the company had taken to combat increasing costs. It had reduced employment costs by decreasing the work force from 18,000 in 1972 to 14,500 in 1977, improved productivity per manhour to a level above that of the industry as a whole, and eliminated high-cost, non-profitable operations, such as the rod and wire mill at Monessen. Yet, these measures were not enough to offset rising costs caused by severe weather, coal and ore strikes, and unanticipated expenditures for environmental quality control. As a result, the company's costs had increased in 1977 by twelve percent, while prices—held down by imports and the flat market—had increased by only seven percent.
In the talk Carney was particularly vocal in his criticism of state and federal environmental regulations. The company had recently averted a shut-down of the Monessen plant because of violations of air pollution regulations. On March 22, 1978 it reached an agreement with the Pennsylvania Department of Environmental Resources to settle the agency's forty million dollar suit. The agreement provided schedules for the installation of air pollution controls at Monessen costing $28.5 million, but it was contingent upon the company receiving federal loans for the investment. According to Carney, these expenditures increased costs and diverted money from "productive and profitable investment into non-productive facilities that are costly to maintain and operate." Since 1974, the company had spent nearly one-half of its total capital expenditures—$103 million—for pollution-abatement facilities. In these same four years, the company's gross profit was only $51.6 million. "Yet, we are told that's not enough," complained Carney. What the company needed were additional agreements with federal and state authorities to provide a "stretch-out" in spending for environmental installations.
Carney was even more critical of government policy in regard to capital formation in the steel industry. Steel was a capital intensive industry, and government price controls, along with foreign competition, had made it impossible to accumulate capital. His company needed a massive infusion of capital, but without profits it was impossible to attract investments. Moreover, the depreciation allowances set by the federal government were not adequate to replace worn-out equipment. The situation appeared even more difficult when compared with that of foreign competitors. In Western Europe and Japan, governments offered guaranteed loans and even grants for modernization and expansion. steel makers in the United States not only lacked government support of this nature, but found their tax dollars (nearly five billion) being contributed through foreign aid and loans to the expansion of their foreign competition. Now, the products of these foreign mills were being imported, reducing the size of the domestic market and causing unemployment. Carney summed up the situation: “We are like a boxer with one arm tied behind us (lack of capital), while our opponent is fighting us with both hands. And under the rules, he can hit us below the belt (dumped imports), but we can't hit him back the same way. Even the world's greatest champion can't win a fight with odds like that fixed against him.”
Carney still thought it possible to continue the bout, however. He outlined a plan to rehabilitate the company. Interestingly, each of the five steps envisioned in the plan would entail some form of political action. First, the company would diversify its products by installing a new rail mill at Monessen. Also, it would obtain a "stretch-out" in environmental spending for additional facilities. To improve the cost-price relationship for sheet products, the company would increase sheet prices "in accordance with free market competition and with less government interference." The fourth and fifth steps involved lobbying and direct political action. The company would continue its efforts to reduce unfair competition from imports and apply pressure on Washington to discontinue foreign aid; and it would work to mobilize support for elected officials who would represent the company and the steel industry in coping with environmental problems, price controls, foreign competition, and gaining government loans.
Like Allison Maxwell, whose "Program for Profits" program rehabilitated Pittsburgh Steel in the 1960s through employee concessions, Carney realized that such an ambitious plan would have to start at home. In an effort to raise capital and give employees a personal stake in Wheeling-Pittsburgh, the company offered a sale of preferred stock to each of its approximately ten thousand employees in April, 1978. By April 24, seventy percent of the workforce had signed payroll deduction authorizations or made lump-sum payments to purchase $8.6 million of the stock issue. In a press release, Carney called the response an "overwhelming demonstration of ... loyality and dedication." He stated that the sale would provide reassurance to other stockholders, customers, the financial community, and government officials that the company would "resolve its problems and regain profitability."
With the support of employees, Carney launched a broad-based program to make the company profitable once again. He repeatedly pled his case before community groups, USWA officials, and federal and state government officials. After consolidating the Monessen and Allenport plants under a single management in September, 1978, Carney convinced Allenport employees and District 15 USWA officials to accept deferrals of "runaway" incentives at the Allenport plant in 1979 and 1980. Carney enlisted the support of Senator John Heinz and Congressman Joseph M. Gaydos in a campaign to cut foreign aid and obtain federal loans for steel industry modernization. Although little was accomplished in regard to foreign aid, Carney scored a major coup in 1978 by securing from the Department of Commerce's Economic Development Administration (EDA) and the Farmers Home Loan Administration a guarantee for ninety percent of a $150 million loan. Part of a Carter administration plan to prop-up the ailing steel industry, the EDA loan guarantee was the largest in its fifteen years of existence. It was to be used for the installation of a rail mill and the rebuilding of two batteries of coke ovens which had become inoperable because of pollution problems.
The new rail mill and coke ovens were seen as the economic salvation of the company, as well as the Monessen community. The coke ovens, rebuilt from the pad up, were completed in 1979 and 1980. As the rail mill neared completion, Carney exuded optimism, asserting that the company's "next ten years will be better than the last. We have a great potential to make one hell of a lot of money ... ." Based, in part, on Japanese technology, the new mill was one of the finest in the world. It was the first rail mill built in the United States since 1921. It incorporated two new technologies: the universal rolling process, in which all four sides of the rail are shaped simultaneously, and a computer-controlled production line. Once in production, it would diversify the company's product mix, shifting about twelve percent of its steel production into rails. With some new construction and retrofiting, the rail mill could be modified to produce structurals. Carney felt that the country would soon have to rebuild its infrastructure—its railroads, bridges, dams, and highways—and that Wheeling-Pitt would be well positioned to take advantage of the demand for rails and structurals. With these investments and an improved earning performance since 1979, the company's stock doubled from 1980 to 1981. Carney announced that the company would spend $155 million for two continuous casters, one at the Monessen plant to produce blooms for the rail mill, as well as for the seamless pipe mill at Allenport, and the other at the Steubenville plant to produce slabs for the hot-strip mill. The company purchased the casters from the Mitsubishi Corporation, which also financed the venture. Wall Street analysts announced that they were "bullish" on Wheeling-Pittsburgh, and one expert declared that Carney's modernization program would "soon thrust Wheeling-Pittsburgh ahead of a number of its competitors in the integrated steel business." Another analysis noted that the company had the "most leverage" of any of the major steel companies.
The rail mill and continuous caster at Monessen were completed in 1981. The rail mill had a capacity to produce 400,000 tons of high-quality rails in lengths up to eighty-two feet. At the time of its completion, it was one of four in the United States producing rails; the others were CF&I Steel's plant at Pueblo, Colorado, Bethlehem's plant at Steelton, Pennsylvania, and U.S. Steel's plant at Gary, Indiana (which closed in April, 1984) . These four mills had an aggregate capacity in excess of 1.5 million tons. This was more than enough capacity to produce the 907,000 tons of rails required by the railroad industry in 1981. This excess capacity in rails would soon threaten the successful operation of Wheeling-Pittsburgh's Monessen plant.
Designed and installed by Mitsubishi, the continuous casters at Monessen and Steubenville reflected the effort of Wheeling- Pittsburgh to duplicate Japanese practices. Carney claimed that they were "as good or better" than those of the Japanese. With approximately eighty percent of its production continuously cast in 1982, Japan led the world in the use of this post-World War II technology. Casters have several advantages over the conventional ingot-mold method. In the continuous-casting process, the steel is tapped from the furnace into a ladle, then poured directly into the caster. It solidifies as it passes through and emerges as a slab, billet, or bloom. The process bypasses several steps in the conventional production of steel, eliminating the pouring of steel into ingot molds, stripping the molds, placing the ingots in soaking pits, and, most importantly, rolling the ingot into semifinished form. The elimination of these steps cuts labor and energy costs, and improves the yield from the raw steel by about ten percent. Since only twenty percent of American steel was produced with casters in 1980, the installation of casters at Monessen and Steubenville placed Wheeling-Pittsburgh at the forefront in American steelmaking technology.
These technological improvements would have little impact on the company's financial performance, however, because of the monumental crash of the steel industry in the early 1980s. According to John P. Hoerr, whose And The Wolf Finally Came documents the decline of the steel industry in the Pittsburgh region, this was the most devastating business slump since the Great Depression. Due to a worldwide drop in demand and the financial policies of the Reagan administration, which produced a rapid rise in the value of the dollar and a commensurate decline in the price of imports, steel prices dropped nearly ten percent between 1982 and 1985. American steelmakers found themselves losing money and holding excess steelmaking capacity. As a result, the industry contracted nationwide. Steelmaking capacity was reduced by over twenty-one million tons between 1981 and 1984. Corresponding reductions in employment took place: from 509,000 in 1973, the peak year, the number of employees in the industry shrank to 243,000 in 1983. This dramatic collapse had the most pronounced impact on communities in the Upper Ohio and Monongahela valleys. Youngstown, Ohio lost virtually its entire steel industry. The closure of J&L's Pittsburgh Works and U.S. Steel's Homestead, Duquesne, National, and Donora plants in the early 1980s devastated the Pittsburgh region, transforming it from the nation's leading steel center to a industrial graveyard. In light of this permanent loss of plants and jobs, Hoerr's assertion that the 1980s depression was the most devastating since the Great Depression should be modified. In fact, the 1980s depression was the most devastating in the entire history of the American steel industry.
As the depression set in, steel companies looked to labor for relief. Wheeling-Pittsburgh led the nation's major steel companies in the effort to gain concessions from organized labor. The company's aggressive modernization program left it with a $359 million debt, and it was having trouble making interest payments. The company's precedent-setting departure from industry-wide bargaining actually began in 1980, when it was expelled from the Coordinating Committee of Steel Companies (CCSC). Formed in 1956 and composed of the nation's major steel companies, CCSC had negotiated industry-wide wage agreements with the USWA. The group ejected Wheeling-Pittsburgh because it negotiated an allegedly substandard agreement with the USWA, the deferral of "runaway" incentives at the Allenport plant. In January, 1982 Wheeling-Pittsburgh negotiator, Joseph L. Scalise, began meetings with USWA officials, Jim Smith of District 15 (Monessen and Allenport) and Paul D. Rusen of District 23 (Wheeling area) to consider concessions. Although McLouth Steel and Penn-Dixie Steel had previously gained concessions from the USWA, these two small companies were in bankruptcy. If the union agreed to accept the company's "take-aways," it would set a precedent. As would be the case in subsequent negotiations, the union decided to rescue the firm and save as many jobs as possible. In April an agreement was announced. To reduce a scheduled increase in labor costs by thirty million dollars, the union gave up two weeks of vacation and thirteen paid holidays over a nineteen month period, as well as a twenty-three cent per hour wage increase scheduled to take effect August l. Since Wheeling-Pittsburgh labor costs had been about one dollar per hour higher than other steel companies, these reductions - which totalled about one dollar per hour - did not give the firm a competitive advantage. In this agreement, the USWA introduced a new concept, proposed by Smith. To represent the wage cuts as "investments" on the part of workers, the company agreed to give each worker preferred stock equal in value to the wage and benefit "give-backs." This meant that each employee would receive about four thousand dollars in preferred stock. The ownership idea was backed by a new worker-participation program which would give the worker-owners more of a say in production decisions.
The innovative efforts of Carney and Wheeling-Pittsburgh to modernize its facilities and save the company did not escape the notice of industry analysts. In 1983 the Pittsburgh Business Times announced that Wheeling-Pittsburgh was one of two winners of its first annual Enterprise Awards, which were given to Pittsburgh area companies which "believe in the vision of the entrepreneur and the building of a fine company through hard work, team spirit, and the desire to contribute to the betterment of our community." The award was based on the company's achievements in getting the new rail mill, its successful negotiation with the UMWA for concessions, and its employee stock ownership plan. Carney accepted the award for Wheeling- Pittsburgh, and noted that the company had been successful because it was not afraid to do things differently than other steel companies. The success with the USWA came because his company opened its books to union officials, fostering workers1 willingness to moderate labor costs. Workers were willing to take cuts because they knew that Wheeling-Pittsburgh was devoted to its steel operations: it would not use its savings to invest in other industries as had U.S. Steel when it acquired Marathon Oil in 1982. Stressing the uniqueness of his company's approach to labor, Carney termed the expulsion of Wheeling-Pittsburgh from the CCSC as the "best favor they ever did me." Carney also presented himself as an industrial statesman, announcing that his "next big project" was to "get the government to do something of a protectionist nature for steel, auto, electronics - a lot of industries now in danger."
In 1983 Carney got another cost-cutting agreement with the USWA. On December 30, 1983 Wheeling-Pittsburgh employees ratified a settlement reducing labor costs by $2.85 an hour, including a $1.53 wage cut. Wheeling-Pittsburgh's hourly employment costs went down to $20.65, or $3 to $5 below the industry average. The company agreed to put ninety cents an hour into a fund to help the unemployed. It also guaranteed that "any saving resulting from a moderation of its labor costs will stay in the steel industry."
Meanwhile, in an effort to repair the company's finances and continue the modernization effort, Carney had initiated negotiations with several off-shore steel companies. In 1983 he approached Siderbras, the Brazilian steel-holding company, to purchase several hundred thousand tons of slabs on an annual basis in return for a major investment in Wheeling-Pittsburgh. Negotiations were discontinued, however, mainly because of USWA opposition. Carney's talks with Nisshin Steel of Japan, the smallest integrated company in that country, for a cooperative venture were more fruitful. On February 7, 1984 he announced that an agreement had been reached whereby each company would purchase the other's stock and engage in a joint venture. They would build a fifty million dollar steel-coating plant in Follansbee, West Virginia to serve the automobile and appliance industries. This venture capped-off the company's modernization effort and provided it with much needed working capital.
Despite the agreement with Nisshin, by 1985 Wheeling- Pittsburgh was a troubled steel company. Since Carney had become president in 1974, the company had spent $806 million for new equipment and facilities, yet it had also reduced its workforce from 18,300 to 8,600. Rather than strengthening the company the expenditures had weakened it. Nearly all of the money had been borrowed, and due to the continuing downturn in the industry, it was growing more difficult to repay investors. In 1985 Wheeling- Pittsburgh had a long-term debt of $509 million. As a result of the debt, one analyst called Wheeling-Pittsburgh "one of the most leveraged steel companies in the United States." Paine Webber called the company "particularly weak" and "quite close to bankruptcy."
The most eventful year in the history of Wheeling-Pittsburgh Steel Corporation, and its antecedent, the Pittsburgh Steel Company, was undoubtedly 1985. Not only was the company forced into bankruptcy, but it also underwent a ninety-eight day strike/lockout—the first in the industry since 1959—and shutdown the Monessen plant, ending its campaign as an integrated steel mill. For Wheeling-Pittsburgh—and particularly the Monessen plant—1985 was the year in which the "wolf finally came." Utilized by John Hoerr in his important work on the decline of the American steel industry, this phrase characterizes one of the principal causes of the 1980s debacle—distrust between labor and management. In the book, Hoerr uses the events at Wheeling-Pittsburgh in 1986 to illustrate how such distrust exacerbated the economic collapse and led to disaster. In analyzing the strike at Monessen in July of 1985, Hoerr asked why union employees had struck the company while it was in bankruptcy proceedings. It appeared senseless because the workers had no guarantee the company would survive the strike. Hoerr believed that the answer lay in the tactics employed by Dennis Carney. In gaining the approval of a bankruptcy court to nullify an existing labor agreement and impose an eighteen percent cut in pay and benefits, Carney had tried to "make people do things by management decree."
Only a brief outline of the events which led to the closure of the Monessen plant can be provided in this paper. On January 10, 1985 "concession negotiations" were opened between union and management officials to save the company from imminent collapse. Paul Rusen, Director of District 23, and Andrew "Lefty" Palm of District 15 headed the USWA team while Joseph L. Scalise was management's negotiator. Both union and company negotiators recognized that the company needed financial relief in order to survive, but could not agree on how to provide it. Rather than taking the large concessions requested by management, the union proposed the creation of an escrow account funded by the contributions of workers which the company could draw upon if needed. Management rejected this offer. Then, in April an agreement was reached on a $19.50 labor rate—a concession of nearly $1 an hour. This accord was shattered later in the month, after Wheeling-Pittsburgh filed for a reorganization of the corporation under chapter 11 of the federal bankruptcy laws on April 16. Wheeling-Pittsburgh officials announced a first quarter loss of $25.7 million.
On May 8 management officials made what was apparently their last offer: a $15.20 total hourly rate and a five-year contract. USWA officials balked. Citing high costs, inefficient operation, and the lack of demand, management temporarily shut down the Monessen plant on May 29, though the rail mine continued to operate. The union received another shock on May 31, when management filed a motion with the bankruptcy court to reject the existing collective bargaining agreement with the USWA. Carney intended to impose an eighteen percent cut in pay and benefits in order to save the company. This move alienated many employees who had been sympathetic to the company's plight. To gain support from employees and the community, management began a public relations campaign, issuing bulletins explaining why the motion was filed and what impact their proposal would have on pension and health benefits, holding community meetings and sponsoring television spots with company spokesman Jack Fry. Both management and union officials went before bankruptcy Judge Bentz during June to argue their cases. On July 17, Bentz ruled that Wheeling-Pittsburgh had the right to reject the collective bargaining agreement. On the same day, management presented a new proposal for a $17.50 per hour package, but it was rejected by USWA officials. A strike was now imminent.
At 12:01 a.m. on July 21, 1985 Wheeling-Pittsburgh's hourly employees at its Monessen, Allenport, steubenville, Mingo Junction, Yorkville, Follansbee, and Beech Bottom plants went on strike. It was the first in the steel industry since 1959. Management "locked-in" supervisory personnel, hoping to continue limited operations at the plants with skeleton crews. The strike proved to be rancorous. Strikers at Monessen blamed Carney for the impasse; picketers carried signs which read "If you like Hitler, you'll like Carney" and "Carney Must Go." Throughout the next three months picketing continued at the plants, and several violent confrontations occurred. The USWA held numerous "solidarity rallies," including one on August 26 at the union's Pittsburgh headquarters. At the rally Paul Rusen said that "removing Carney is the key to a settlement. Dennis the Menace has got to go."
Despite persistent attempts by the Federal Mediation and Conciliation Service to get the two parties back to the bargaining table, the strike continued through September. A break came on September 20, when key members of the board of Wheeling-Pittsburgh resigned. For their resignations Carney and two key officials, Joseph Scalise and George Raynovich, received "golden parachutes." They were paid a total of $2.3 million for their resignations; Carney received nearly $1.5 million and the two others $400,000 each. Allen E. Paulson was elected as the company's new chairman, and George A. Ferris was named chief negotiator. With this change in management, negotiations soon got underway; on September 24 Ferris met with USWA negotiators and Federal Mediation and Conciliation service officials. Several meetings followed over the next month, and on October 15 a tentative strike settlement agreement was reached. After Judge Bentz upheld the right of the management and the union to enter into the agreement without court approval on October 25, the strike was ended on October 26, when steelworkers ratified the agreement by a vote of 5,924 to 789.
The terms of the contract, the third concession package since 1982, indicate that steelworkers sacrificed to reach agreement. The contract slashed wages from a pre-strike level of $21.40 an hour to $18 per hour and benefits from $12 per hour to $10.05 per hour. Workers lost one week of vacation and the possibility of raises through the cost of living adjustment provision. There were, however, provisions which were favorable to labor. It was agreed that if steel prices rose by five percent, steelworkers would get an additional $1 per hour. It also set aside $1.05 for the troubled pension plan. But what was truly innovative in the contract was a "cooperative partnership" plan which involved the union in the active management of the company. Through this provision, a union official would become a voting member of the board of directors. Overall planning and direction for operations would be provided by a Joint Strategic Decisions Board, consisting of four management and four union representatives. In addition, each plant would have a Board of Production composed of union and management officials which would make operational decisions on a plant-wide basis. This cooperative management arrangement was lauded by Senator Jay Rockefeller of West Virginia in a speech on the Senate floor on November 19. Later, it was included in agreements between USWA and other steel companies.
With this agreement, the company's plants went back into operation. "Jane" blast furnace at Monessen was blown-in on November 4, 1985, and all operations were resumed. This campaign was short-lived, however, because on December 14, 1986 "Jane" was banked, and all operations except for the rail mill were halted. Later in the month, management and union officials met to consider proposals for the Monessen plant. Bank creditors were included in later meetings. The bankers, it was later learned, urged officials to "do something about the Monessen facility" because it was a "money-losing operation." On January 21, 1986 the decision was made to close permanently the 46", 30", and 18" rolling mills and sintering plant at Monessen, along with the hot strip mill and tube division at Allenport and some facilities at Steubenville. The remainder of the Monessen plant operated at limited capacity until June, when it was shut down temporarily, idling the remaining 870 employees working there. Company officials explained that the inventory of steel was sufficient to supply the rail mill, which was scheduled to reopen in August, for the remainder of the year. Ernie Reppert, president of local 1229 of Monessen, announced that USWA would present a proposal to management for the installation of an electric furnace to replace the unprofitable iron and steelmaking facilities. Reppert said that without an electric furnace, "it is possible [the plant] will never open." Later, a feasibility study for the installation was conducted, but nothing ever came of it. On June 4, the company announced the permanent closure of the blast furnace and BOF at Monessen and laid off six hundred steelworkers. Because of the ninety-day notification period required by the union, the official shut-down date was September 2. With the temporary closure order in effect, the company was able to close the metal shops earlier, however. The iron and steel furnaces at Monessen shut down cold on June 28, 1986.
Despite the closure of the hot metal facilities, Wheeling- Pittsburgh still had plans to operate the rail mill and coke ovens at Monessen when market conditions improved. The rail mill was slated for start-up in August, and the ovens were kept warm so they could be restarted. More bad news came in the following months, however. In August, the headquarters of the company, which had been in Pittsburgh, was moved to Wheeling, mainly because of the "sweetheart" tax and incentive package put together by Governor Arch Moore. With the Wheeling area plants operating at nearly full capacity, this move was seen as part of a "West Virginia domination." It was later alleged that Paul Rusen, the former president of District 23 who was given a seat on the board of directors, had led the effort to make Wheeling the center of the company. With the glut in the rail market, the rail mill was operated intermittently during the remainder of the year. It was permanently shut down in March, 1987 and turned over to the Economic Development Administration, which had a $65 million lien. Subsequently, EDA put the mill up for sale. The two major bidders were the Monongahela Valley Metals Retention and Reuse Committee, a local group which wanted to reopen it, and Bethlehem Steel Corporation, which regarded the mill as potential competition to its Steelton plant. After a period of negotiation, Bethlehem purchased the rail mill and a fifty-acre parcel nearby (where shops and finishing facilities stood) for twenty million dollars; the deal was approved by Judge Bentz and finalized on December 30, 1988. Since the purchase, Bethlehem has made no attempt to restart the mill.
The Monongahela Valley Metals Retention and Reuse Committee also made an effort to acquire the remainder of the mill. Based in Donora, this group was formed by, and under the aegis of, the Monongahela Valley Progress Council, which had provided a ten million dollar loan for the construction of the rail mill. This group wanted to reopen the plant. They commissioned a study to examine this possibility. Without the restraints of debt and bankruptcy and with a world-class rail mill and coke plant, the experts they hired believed that the mill could still be operated at a profit. The group secured financial commitments of nearly one hundred million dollars from federal, state, and private investors for the purchase. The effort fizzled after the sale of the rail mill, however, in part because of uncooperative EDA officials.
The Monessen plant was destined to be sold in bits and pieces rather than a single unit. Rebuilt in 1980, the coke ovens remained a viable facility. After the shutdown in 1986, they were kept warm to avoid damage, the cost being shared by Wheeling-Pittsburgh, one of the creditors, and a prospective buyer. In April, 1988 Sharon Steel Corporation, which was itself in chapter eleven bankruptcy proceedings, expressed an interest in the coke ovens, as well as the remaining hot metal plant, particularly the continuous caster. The company intended to remove the caster for reuse at its plant in Farrell, Pennsylvania, but it would operate the coke ovens. The company offered $18.1 million and purchased the facilities and a sixty eight acre parcel in mid-April. Sharon set up a new company, Monessen, inc., to operate the ovens. However, the Environmental Protection Agency would not allow the ovens to operate because of excessive emissions from the quencher. After the installation of a scrubbing system, the coke ovens were restarted in February, 1989. They were operated only for a short period, however, because of another environmental problem. The ovens leaked gas into the atmosphere, a condition known as bleeding. Sharon was unable to repair the ovens, and in 1995 sold them to Koppers Industries, Inc. With the help of a grant from the Commonwealth of Pennsylvania, Koppers made the necessary repairs and put the ovens back into production in late 1995.
The remainder of the mill property was eventually purchased by the Westmoreland County Industrial Development Corporation (WIDC). In January, 1992 Bethlehem announced that it would sell the rail mill, which it had never operated, and the fifty-plus acre parcel surrounding it. In June, 1994 WIDC reached agreement with Bethlehem to purchase the parcel, but not the rail mill. In October, 1994, WIDC purchased Sharon Steel's sixty-eight acres of mill property for $1.1 million. At this juncture, WIDC owned all of the mill property except for the rail mill and coke works. Based on a 1993 study by Mullin and Lonergan, Associates, WIDC planned to demolish most of the mill structures and turn the property into a riverfront industrial park. Some of the existing buildings, particularly the brick shops and office buildings, were slated for rehabilitation and reuse as business incubators. After the award of a $5.5 million grant from the state in November, 1994, demolition for the project began in March, 1995. As the first phase of demolition began on March 10, 1995, the Valley-Independent noted that this was "history in the making." Indeed, a significant chapter of Monessen's history had drawn to a close.