Dot-coms rate A-1 headlines when they die; smokestack stocks expire more modestly, in one-paragraph items buried deep in the business section. That's where you found the obituaries for Bethlehem Steel last week when it was booted from the New York Stock Exchange, where its "BS" ticker had adorned the Big Board for almost a century.
It's a sad end for the venerable stock and a sobering reminder for tech-stock enthusiasts (those few who remain) that one day the Oracles and the Sun Microsystems will end up on the scrap heap. For Bethlehem was a high-tech wonder in its day, when it made a famous plutocrat of a visionary entrepreneur named Joseph Wharton, who now suffers the obscurity that eventually will claim Oracle's Larry Ellison and Sun's Scott McNealy.
Wharton was a Philadelphia Quaker whose piety did not inhibit his pursuit of the main chance. Among his triumphs: He cornered the U.S. nickel market, then persuaded Congress to adopt the "nickel," a new five-cent piece made exclusively with metal from Wharton's mines. Later, as principal stockholder of Bethlehem Iron, he pushed for upgraded technology that allowed the firm to supply the U.S. Navy with armor plate in the 1880s, thus giving birth to America's military industrial complex. By the time Wharton died in 1909, the company now known as Bethlehem Steel was one of the nation's foremost industrial concerns.
Even today Bethlehem remains a Fortune 500 company, thanks to its still-considerable revenue. It has 13,000 employees who make millions of tons of steel that are sold to actual customers such as General Motors—yet the stock market effectively values Bethlehem at zero. Shorn of its NYSE ticker, Bethlehem Steel is now banished to that Wall Street limbo where "bulletin board" stocks trade over the counter for pennies. Nobody was surprised, given that the firm filed for Chapter 11 bankruptcy protection last October. But this has been a stunning fall for a stock that as recently as 1997 was still a component of the blue-chip Dow Jones Industrial Average. Bethlehem is not yet dead, but the delisting means its glory days are officially over. Even if it emerges intact from bankruptcy proceedings, this is not a stock that will be generating interest on Wall Street. When the "BS" was deleted from the Big Board, hardly anybody paused to mourn.
Perhaps a tear or two was shed in Bethlehem, Pa., where the firm is headquartered but where it no longer makes anything. The town's enormous steel plant, which once employed 30,000 people, now produces nothing but irony: It will house the Smithsonian's proposed National Museum of Industrial History, if funding can be found. It's a great idea, actually, since Bethlehem Steel supplied the raw material for such landmarks as Rockefeller Center, the Golden Gate Bridge, Chicago's Merchandise Mart, and the U.S. Supreme Court Building, not to mention Madison Square Garden and millions of beer cans. Why tear down that dark satanic mill if people will pay good money to see the furnaces where modern America was forged? (The gift shop can sell Bethlehem Steel over-the-counter shares as cheap souvenirs.)
Bethlehem fell into decline in the 1960s, hampered by complacency and high-cost labor contracts that made it difficult to compete with cheap imported steel. The situation would have enraged Wharton, who was the nation's foremost advocate of the high steel tariffs. Protectionism was Republican orthodoxy in those days, and it made Wharton rich—so rich that he could afford to endow the nation's first business school, at the University of Pennsylvania, and give it his name. Later he was mightily displeased when some Wharton School professors embraced the free-trade heresy. A century later, free trade is the national dogma, and the many Wharton alums on Wall Street presumably pursed their lips in disapproval last March when President Bush said he would raise steel tariffs to help firms like Bethlehem.
On Wall Street, the demise of Bethlehem Steel as a listed stock is seen as the logical result of inexorable market forces. And it's true that in the long run the invisible hand will smite this firm, no matter what the World Trade Organization decides about Bush's controversial tariffs. But at least Bethlehem Steel will leave behind some impressive monuments: the bridges and skyscrapers built with its steel. When a modern software firm like Oracle finally passes from the scene, what physical evidence will remain? Perhaps Larry Ellison should write a check to the Smithsonian to get that National Museum of Industrial History built in the old Bethlehem plant. That way he'll at least earn himself a sturdy bronze plaque by the front door.
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