Redistribution of wealth ? one man?s poison, another man?s food

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Usha Nellore
Remember Bethlehem Steel, a hoary American manufacturing giant in its heyday whose heartbreaking downfall ruined so many hard working people in the Baltimore region? My mind fixates on Bethlehem Steel and Sparrows Point as commentators trade barbs over Barack Obama’s “redistribute the wealth” comments.

I know a lot of people who worked for Bethlehem Steel. They grew up breathing the toxic fumes at Sparrows Point, content with a job that provided health care and retirement benefits. They trusted it would provide for them until they died. Their trust was not irrational because for decades the company kept its promise to hundreds of men who dedicated their lives to running its furnaces and shipyards. But the fateful year of 2001 was different.

That was when Bethlehem Steel declared Chapter 11 bankruptcy, tearing into the blue-collar fabric of the Baltimore region. The company that supplied girders for the Golden Gate Bridge and steel for the outer shell of Rockefeller Plaza, the company that built the ships that fought in two world wars, buckled on its knees, defeated by cheap imported steel and mismanagement.


The first people to be hit hard by this catastrophe were Sparrows Point retirees. Their lives were thrown into chaos, their years of work in ashes, when bankruptcy court allowed Bethlehem Steel to eliminate its health and life insurance obligations. The federal Pension Benefit Guaranty Corporation intervened to make up for Bethlehem Steel’s chronically underfunded retirement fund. Retirees saw their checks slashed and that was only the beginning.

Many workers sick with chronic occupational diseases may never have been compensated for their work-related injuries if not for Maryland’s Injured Workers Benefit Fund. Bethlehem Steel defaulted on these payments, too.

Though the retirees suffered terrible blows, the Sparrows Point plant survived. International Steel Group of Cleveland bought Bethlehem Steel’s assets and kept the steel mill running until a billionaire from India, Lakshmi Mittal of ArcelorMittal, acquired International Steel Group in 2005.

Lakshmi Mittal, who lives in London, is a much vaunted figure in my native India. He is a rags to riches story. Born in a village in Rajasthan, he is not the man you would expect to guide the wheel of a steel juggernaut. He has spent most of his adult life acquiring and merging steel companies across the globe.

Considered blessed by goddess Lakshmi, the goddess of wealth, Mittal is known to be a shrewd operator with an eagle eye for increasing his wealth and status. His management style is lean, mean and efficient to maximize returns. But in his personal life he is prone to ostentation. Among his excesses, best remembered, is the wedding party he threw his daughter Vanisha in 2004.

The wedding is said to have cost about $60 million. One thousand guests were flown in at Mittal’s expense. I don’t think one blue-collar worker from Sparrows Point attended. The invitations, 20 pages long, went out in silver boxes. More than 60 chefs plied the guests with Epicurean delights. Across France the party went on for almost a week, at several magnificent and historic sites. At the time Mittal was calculated to be the fourth richest man in the world.

Contrast the Mittal extravaganza with the plight of the Sparrows Point retirees. Granted, Mittal had nothing to do with the devastation that accrued to the retirees. But I doubt he expends one minute wondering if those who fatten his pockets receive salaries commensurate with the risks they take or the skills they use. And when he downsizes his work force to steer his steel empire into profitable waters, I don’t believe his heart breaks for those who may be left out in the cold with meager severance.

The $60 million Mittal blew at his daughter’s wedding rightfully belongs to the workers at his numerous steel plants. The man should cut back on his lavish lifestyle and fund generous benefits for his workers. But this being unlikely, the governments in the countries where he operates should increase his taxes and get from him the money necessary to guarantee workers their health care, pension and compensation for injuries. The same goes for other moguls. And why not? When private companies fail, governments are expected to come to the rescue of workers. Increased taxes on corporations should be used as an insurance against this burden.

Is that redistribution of wealth? Go talk to the guys who sacrificed their entire lives at Sparrows Point and got nothing to show for it except government checks. They’ll tell you that’s justice.
  
Usha Nellore is a writer living in Bel Air. Reach her at unellu@gmail.com.
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