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U.S. Steel and Gary, West Virginia

Corporate Paternalism in Appalachia

Ronald G. Garay

Publication Year: 2011

The company owned the houses. It owned the stores. It provided medical and governmental services. It provided practically all the jobs. Gary, West Virginia, a coal mining town in the southern part of the state, was a creation of U.S. Steel. And while the workers were not formally bound to the company, their fortunes—like that of their community—were inextricably tied to the success of U.S. Steel. Gary developed in the early twentieth century as U.S. Steel sought a new supply of raw material for its industrial operations. The rich Pocahontas coal field in remote southern West Virginia provided the carbon-rich, low-sulfur coal the company required. To house the thousands of workers it would import to mine that coal bed, U.S. Steel carved a town out of the mountain wilderness. The company was the sole reason for its existence. In this fascinating book, Ronald Garay tells the story of how industry-altering decisions made by U.S. Steel executives reverberated in the hollows of Appalachia. From the area’s industrial revolution in the early twentieth century to the peak of steel-making activity in the 1940s to the industry’s decline in the 1970s, U.S. Steel and Gary, West Virginia offers an illuminating example of how coal and steel paternalism shaped the eastern mountain region and the limited ways communities and their economies evolve. In telling the story of Gary, this volume freshly illuminates the stories of other mining towns throughout Appalachia. At once a work of passionate journalism and a cogent analysis of economic development in Appalachia, this work is a significant contribution to the scholarship on U.S. business history, labor history, and Appalachian studies.

Published by: The University of Tennessee Press

Contents

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pp. vii-

Acknowledgments

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pp. ix-x

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Introduction

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pp. xi-xxii

Gary, West Virginia, did not exist as the nineteenth century gave way to the twentieth. In its place was nearly untouched wilderness, yet elsewhere much of America was booming. The misery and displacement occasioned by the Civil War was nearly two generations in the past, and as much of rural America became urbanized...

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Chapter 1. Origins and Settlement

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pp. 1-6

Darkness shielded their presence as the Shawnees quietly advanced across the open field. They moved initially on tiptoe and then, as though choreographed, began a slow, rhythmic run. A small Indian band like this usually was led by a fellow warrior skilled in the hunt. But this band was different. At its head was none other...

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Chapter 2. Iron and Steelmaking Science and Manufacturing

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pp. 7-20

Jordan Nelson probably would have preferred his privacy and quiet life to what lay ahead. But because of where he happened to be, Nelson was destined to be both participant and observer of an industrial revolution that had been transforming much of western Europe and the northeastern United States but that only lately had arrived in southwestern Virginia...

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Chapter 3. Pocahontas Coalfield and the N & W

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pp. 21-34

Jordan Nelson was the first to actually exploit the splendid resource of Pocahontas coal that lay all around him, but he was not the first to know of its presence. Dr. Thomas Walker had written about the coalfield over a hundred years before. Thomas Jefferson, possibly drawing from Walker’s journal, even referred to the coal rich area of western Virginia...

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Chapter 4. Gary at the Beginning

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pp. 35-48

Among the crazy quilt of companies gathered beneath the U.S. Steel umbrella, Illinois Steel took initial lease of the newly acquired McDowell County property. The connection with Illinois Steel was logical, since most coke produced in the county would be destined to Chicago area steel plants (and later to steel plants in Ohio), and Illinois Steel officials...

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Chapter 5. Labor Issues and Labor Organization

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pp. 49-60

Labor and management during much of the early days of corporate growth in both the steel and coal industries seldom were at ease with one another. This was especially true among the builders of massive enterprises such as Andrew Carnegie and Henry Clay Frick, both of whom historian Matthew Josephson called “robber barons.”...

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Chapter 6. Coal Power and Town Life

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pp. 61-72

During the twentieth century Gary assumed the mantle of industrial powerhouse in the hollows of southern West Virginia. Gary mines were crucial to steelmaking in World War II, furnishing over 28 million tons of high grade metallurgical coal (called “met coal”) to U.S. Steel. Gary’s contribution accounted not only for roughly one-quarter of the entire coal...

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Chapter 7. Steel Industry in Decline

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pp. 73-92

Today Pittsburgh is a vibrant, modern metropolis shaped by mountains and the Allegheny and Monongahela rivers, which merge at “the Point” to form the Ohio. Home to world-class universities and museums, Pittsburgh features culture in its highest (and sometimes lowest) forms, as well as scores of ethnic neighborhoods that add flavor, color, and texture...

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Chapter 8. An Era Begins to Close

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pp. 93-104

The fortunes of U.S. Steel during the 1960s and early 1970s paralleled those of the American integrated steel industry in general. To many, in fact, U.S. Steel was the steel industry. Since its beginning, the company had played a dominant leadership role in the affairs of the industry. That role began to decline during the 1960s...

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Chapter 9. The Signs Are All Around

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pp. 105-116

“Rationalization” was the operative word for what was happening at U.S. Steel beginning in the 1970s. In fact, a business dictionary definition of “rationalization” illustrates precisely where U.S. Steel was headed: a “reorganization of a firm, group or industry to increase its efficiency and profitability. This may include closing some manufacturing units...

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Chapter 10. Tough but Hopeful Times

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pp. 117-136

Charles Davis noted in his well-researched study of McDowell County coal mining that “the 1970s began with a generally downward trending of coal production in southern West Virginia.” However, several factors had combined by the end of the decade “to make the coal production picture look rather...

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Chapter 11. U.S. Steel, Marathon Oil, and Depression

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pp. 137-156

U.S. Steel’s 1989 annual report was crafted as a ten-year retrospective of a decade of change. One of the most obvious was the company’s 1986 name change to USX Corporation. But that cosmetic makeover did not even approach the significance of other changes. Over the span of ten years, noted the annual report, “USX acquired about $10 billion in assets...

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Chapter 12. A Bleak Year

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pp. 157-168

New Year’s Day 1982 in Gary Hollow probably was like New Year’s Day in many places across America. Folks were sleeping late, having stayed up the night before, partying, drinking a little too much of the stiff brew, popping firecrackers, and hugging and kissing to welcome the New Year. The day quite likely was filled with football games on television...

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Chapter 13. U.S. Steel and Asset Redeploymen

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pp. 169-178

“Rationalizing” was one of U.S. Steel’s favorite euphemisms for several years. Of late, U.S. Steel’s rationalization program as part of the company’s strategic plan had evolved into its asset redeployment program. And by 1983 the company’s euphemism lexicon included a facility reconfiguration program as part of its asset redeployment program...

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Chapter 14. The New U.S. Steel

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pp. 179-188

U.S. Steel had a good year—not a great year—in 1984. The company reversed its $1 billion loss from the previous year into a nearly $500 million income. The downward trend in overall sales also was reversed, as was income recorded for each of U.S. Steel’s industry sectors. The steel sector rebounded from its $610 million loss in 1983 to earnings...

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Chapter 15. Muted Optimism

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pp. 189-194

Storms always signal their approach. Winds increase, temperatures fall, and dark clouds gather on the horizon. When all of these occur at the same time and in the same place, there is no mistaking what is on the way. If changing business and economic conditions carried the same kind of forewarnings as nature, then U.S. Steel executives certainly would have been aware...

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Chapter 16. Disengagement

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pp. 195-204

In 1986 conditions aligned to create the perfect storm. Foreign trade, labor unrest, industrial retrenchment, transport costs, and consumer demands all managed to converge at once, and U.S. Steel was at the center of the resulting economic deluge. Ironically, while U.S. Steel felt the brunt of this economic perfect storm, the company had played a major role in seeding the storm...

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Chapter 17. Prosperity and Uncertainty

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pp. 205-212

The year 1987 would be good for U.S. Steel—in fact, very good. Company management would carefully and successfully exploit U.S. Steel’s strongest assets while continuing to rein in and divest its weakest liabilities. Company executives and stockholders alike would be happy to see the word “profit” describe U.S. Steel’s financial performance...

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Postscript

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pp. 213-216

U.S. Steel’s departure from Gary Hollow was not a departure from the company’s coal mining business. The company, after all, continued to maintain coal mines, like the ones in Wyoming County, whose reserves amounted to a roughly 400-year supply of coal. Even so, U.S. Steel was mining less and less of that coal each year while continuing to pay heavy...

Notes

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pp. 217-254

Index

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pp. 255-265


E-ISBN-13: 9781572337978
E-ISBN-10: 1572337974
Print-ISBN-13: 9781572337305
Print-ISBN-10: 1572337303

Page Count: 288
Illustrations: 1 halftone, 1 map
Publication Year: 2011