Jump to content

Lackawanna Steel Company

From Alfawiki
Lackawanna Steel Company
Company typeSubsidiary (after 1922)
IndustrySteel production
Founded1840
FounderScranton family
Defunct1983
FateBecame subsidiary of Bethlehem Steel in 1922; ceased operations in 1983
Headquarters
Scranton, Pennsylvania (until 1902); West Seneca, New York (from 1902)
,
United States
Area served
United States
Key people
William Walker Scranton, Edward A. Clarke
ProductsSteel, pig iron, rails, coke (via subsidiary)

The Lackawanna Steel Company was a prominent American steel producer that operated independently from 1840 until 1922, after which it functioned as a subsidiary of Bethlehem Steel until 1983. Established by the Scranton family, it grew to become the world's second-largest steel manufacturer and the largest entity outside the U.S. Steel monopoly. Initially headquartered in Scranton, Pennsylvania, the company’s 1902 move to a suburb of Buffalo led to the creation of Lackawanna, New York.

History

During the early 19th century, Pennsylvania's Lackawanna Valley was abundant in anthracite coal and iron ore. In 1840, brothers George W. Scranton and Seldon T. Scranton settled in this region to launch an iron forge focused on pig iron production via blast furnace technology. They were innovators in applying anthracite coal with the hot blast process—a technique developed in Scotland in 1828 that involved preheating air for smelting, thereby lowering fuel consumption.

Together with William Henry, Seldon Scranton’s father-in-law, they established Scranton, Grant, and Co. in 1840 to build a hot blast furnace utilizing anthracite coal. Although initial operations were fraught with challenges such as furnace inefficiencies and water supply problems causing financial setbacks, by 1843 the company had begun producing substantial quantities of pig iron. The firm expanded its capabilities by adding rolling mills and nail manufacturing machinery but continued to struggle with quality control due to ore variability.

By 1846, aiming to secure funding amid the rapid expansion of U.S. railroads—which demanded large volumes of rails previously imported from Britain—the company reorganized as Scrantons and Grant. Investors like Benjamin Loder of the New York and Erie Railroad and industrialist William E. Dodge contributed $90,000 to finance a rolling mill for rail tracks.

Later that year, after further restructuring, the company was renamed Scrantons and Platt and became the first American enterprise to mass-produce T rails beginning in August 1847. This strategic development eliminated reliance on British rail imports and accelerated domestic railroad construction, securing significant contracts such as those with the Erie Railroad. The workforce numbered over 800 employees drawn from Welsh, Irish, and German immigrant communities.

In acknowledgment of its influence, Slocum's Hollow was renamed Scranton in 1851 after its founders. The town’s population grew dramatically from several hundred residents in 1850 to approximately 35,000 by 1870, fueled by industrial expansion around the ironworks.

Growth years

In 1853, the enterprise reorganized as Lackawanna Iron and Coal Company, doubling its capital investment. Within twelve months, its assets encompassed three furnaces, a puddling mill for steel production, foundry facilities, blacksmith and carpentry shops, sawmills and gristmills, a company store, housing for 200 workers, boarding accommodations, iron ore and coal mines, as well as a tavern and hotel.

That same year marked the company’s entry into railroad ownership to ensure market access and reduce transportation costs. It acquired controlling stakes in the Delaware and Cobb's Gap Railroad and the Lackawanna and Western Railroad, merging them into the Delaware, Lackawanna and Western Railroad—thereby initiating vertical integration.

During the 1860s, leadership passed to William Walker Scranton, born in 1844 to Joseph Scranton. By age 23 he was superintendent of a steel mill. Following Joseph’s death in 1872, William assumed control over the family’s industrial holdings including coal and iron mines, a bank, along with Scranton’s gas and water utilities.

In the 1870s American railroads increasingly imported European steel rails produced via the Bessemer process (invented in 1855), which reduced costs while enhancing steel quality. William Scranton studied Bessemer steelmaking methods in Britain and Germany but initially failed to persuade partners to adopt this technology.

Industrialist Moses Taylor aimed to connect his railroads with Scranton’s Delaware & Lackawanna system and advocated for adopting Bessemer steelmaking to manufacture finished steel products. Together Taylor and W.W. Scranton convinced investors to implement Bessemer technology in 1875; their railroads merged in 1881. The first Bessemer steel casting occurred on October 23, 1875.

The economic downturn of the 1870s brought labor unrest. In 1870 coal miner wages were cut by thirty percent by the company, triggering a strike by the Workingmen's Benevolent Association in January 1871. William Scranton personally led strikebreaking efforts which resulted in violent confrontations causing fatalities and necessitating state militia intervention.

The strike collapsed by April as replacement workers resumed operations amid hunger among strikers. Violence erupted again in May before order was restored. Scranton faced arrest twice for his involvement but was acquitted both times.

A significant strike recurred during the Long Depression in 1877 when workers demanded a twenty-five percent wage increase on July 23; strikes spread throughout company operations. Local authorities requested state and federal troops due to escalating violence including arson attacks and mine flooding. Negotiations produced a tentative agreement that was rejected by an angry mob which violently assaulted Mayor Robert McKune on August 1. Gunfire exchanges between posse members and strikers caused casualties before federal troops imposed martial law. The strike ended weeks later without achieving its objectives.

By 1880 Lackawanna Iron had become America’s second-largest iron producer; however internal disputes over expansion plans prompted William Scranton to depart in 1881 and establish Scranton Steel Co. alongside his brother Walter. Within ten years Scranton Steel’s success led to merger discussions culminating on January 9, 1891 when they combined into Lackawanna Iron and Steel Company. Despite nearly $1.2 million debt incurred from this merger, robust financial performance allowed full debt repayment within a year.

Relocation to West Seneca, New York

As the 20th century approached, the Lackawanna Iron and Steel Company encountered escalating labor expenses and logistical difficulties, which led to considerations of moving its operations. By 1899, driven by growing union activities and rising transportation costs, the firm shifted its facilities to West Seneca, New York, drawn by the strategic advantage of Great Lakes shipping routes and extensive railway networks. To acquire the necessary land quietly and prevent speculation, Lackawanna enlisted John J. Albright, president of the Ontario Power Company, who secured almost all the required property for $1.1 million by April 1899.

Construction on the new steelworks commenced in July 1900, with machinery transported from Scranton arriving within nine months. The company established key infrastructure such as a ship canal and rail links to facilitate the delivery of iron ore and coke. In December 1900, the Lackawanna Coal & Coke Company was formed as a subsidiary to supply coke; however, its coal mining operations at Wehrum, Pennsylvania became unprofitable and were discontinued by the 1930s.

On February 14, 1902, the firm reorganized under the name Lackawanna Steel Company, emerging as the world’s largest independent steel manufacturer. It issued $60 million in stock, allocating $20 million toward completing the mill’s construction. The first shipment of iron ore arrived in December 1902, with steel production beginning in early 1903. Subsequently, the Scranton site was sold off and dismantled.

Despite these achievements, William Walker Scranton was replaced as chief executive officer in late 1904 by Edward A. Clarke. The company pursued growth through acquisitions including the purchase of the J.W. Ellsworth coal mining company in 1906.

Lackawanna Steel’s relationship with West Seneca was often tense; while demanding municipal infrastructure upgrades, the company did not contribute financially despite its substantial resources. The increasing workforce caused overcrowding and public health challenges in local housing. Responding to these issues and financial strain during the Panic of 1907, Lackawanna agreed to incorporate the area surrounding its plant as the city of Lackawanna in 1909.

The creation of U.S. Steel in 1901 surpassed Lackawanna as America’s largest steel producer. In response, several independent firms explored mergers to remain competitive; Lackawanna came close to merging with Cambria Steel, Newport News Shipbuilding, Youngstown Sheet and Tube, and Inland Steel between 1915 and 1916, but these plans were thwarted by opposition from banking interests.

During World War I, the company’s financial results were volatile; profits doubled during 1917–18 but dropped sharply by late 1918 and throughout 1919.

Although relocation partly aimed at reducing union influence, labor organizing efforts soon followed. In 1919, the Amalgamated Association of Iron and Steel Workers initiated a significant union campaign at Lackawanna. Backed by Democratic Mayor John Toomey—who received financial support from the company—the union drive faced harsh anti-union measures including dismissals and accusations of communist sympathies. Strikes began on September 22 and escalated into violent confrontations between strikers and company security personnel resulting in two fatalities. The plant temporarily ceased operations; black strikebreakers were employed to continue production. While the national strike ended in early 1920, some local workers remained on strike until June. Although unsuccessful, this effort set a foundation for later unionization under the Steel Workers Organizing Committee during the late 1930s.

Following these events, earnings continued to fluctuate unpredictably. Merger rumors emerged amid losses in 1920–21; nevertheless, Lackawanna expanded by acquiring a pig iron producer and a steel bridge manufacturer.

Physically extending over more than two miles along Lake Erie’s shoreline into Hamburg village, the plant grew substantially. Lackawanna Steel contributed roughly three-quarters of city tax revenues, wielding considerable influence over local governance.

By 1922, outdated machinery at the New York facility led to significant financial deficits.

Bethlehem Steel era

In 1922, Bethlehem Steel Company purchased Lackawanna Steel Co., bringing an end to its 62 years of autonomy. Discussions about merging among the "Little Steel" group—seven prominent firms competing alongside U.S. Steel—had intensified during late 1921 and early 1922 as a strategic effort to challenge U.S. Steel's market supremacy. By April 1922, company leaders and creditors conducted thorough assessments of each firm’s assets and financial conditions, including the Lackawanna plant located in New York.

On May 11, 1922, Bethlehem Steel revealed it had acquired Lackawanna in a $60 million transaction that resulted in a billion-dollar corporation. Bethlehem pledged $10 million to upgrade the Lackawanna mills, which had suffered from insufficient investment. This merger brought approximately 10% of U.S. steel production under Bethlehem’s control, compared to U.S. Steel’s 45%.

The deal prompted a major antitrust inquiry. Following the announcement, the Senate requested investigations by the Federal Trade Commission (FTC) and the Justice Department. The FTC concluded on June 5 that the merger violated the Sherman Antitrust Act; however, Attorney General Harry M. Daugherty overturned this ruling on June 22. The merger was officially completed on October 10, 1922. Analysts later observed that Bethlehem likely acquired Lackawanna for less than half its true value. Over the next decade, Bethlehem invested more than $40 million to modernize the Lackawanna facility.

For much of the twentieth century, Lackawanna remained a vital steel production center. By the 1940s, its mill employed over 20,000 workers and was recognized as the largest steel manufacturing plant worldwide.

Decline

During the 1970s and 1980s, Bethlehem Steel allowed the Lackawanna plant to fall into obsolescence amid increasing foreign competition and high state taxes in New York. The company chose not to invest heavily in pollution control systems or advanced steelmaking technologies, instead prioritizing a newer facility located in Burns Harbor, Indiana.

By 1982, confronting severe financial difficulties common across the American steel sector, Bethlehem Steel announced plans to shut down nearly all operations at Lackawanna, resulting in layoffs of approximately 10,000 employees within six weeks. This closure also affected an additional 8,000 workers employed in related industries throughout Lackawanna, West Seneca, and Buffalo. Attempts to sell the plant to Buffalo-based Gibraltar Steel Corporation were unsuccessful.

Most activities ended on October 15, 1982, with more than 6,000 well-paying jobs eliminated. The shutdown caused Bethlehem Steel’s tax contributions to plummet from covering 66% to just 8% of Lackawanna’s revenue base, forcing significant tax hikes locally and leaving the city with over $5 million in contested tax overcharges. The United Steelworkers union successfully litigated against Bethlehem Steel for prematurely terminating fringe benefits owed to laid-off employees.

This downturn represented a pivotal decline in Bethlehem Steel’s operational strategy and financial health, mirroring wider industry struggles and strategic errors in responding to global market challenges.

Steel manufacturing post-1982

After the workforce reductions in 1982, Bethlehem Steel sustained a limited operation in Lackawanna, ceasing coke production in 2001 while continuing to operate a galvanized steel finishing facility employing roughly 250 personnel. Following Bethlehem Steel's bankruptcy in 2003, the plant was sold to International Steel Group, which merged with Mittal Steel Company in 2004. Subsequently, the site became part of ArcelorMittal's portfolio in 2006 before its closure in 2009.

In 1993, Veritas Capital acquired a bar, rod, and wire manufacturing plant from Bethlehem, repurposing it for automobile steering column production through its subsidiary Bar Technologies. This facility was later managed by Republic Steel, producing hot rolled bars and coils and providing jobs for approximately 270 workers as of 2018. Representing the final steelmaking activity at the former Bethlehem site in Lackawanna, this plant ceased operations in 2023.

Additionally, Canadian company Welded Tube established a new steel tubing production facility on the western section of the property in 2013.

Fire incidents

From 2014 to 2016, three minor fires occurred at a mulch processing operation owned by Zoladz Construction on the former steelworks site.

A major fire erupted on November 9, 2016, at the Industrial Materials Recycling facility located within the old galvanizing and mill buildings. The blaze was initiated by a lightbulb explosion near combustible materials and involved over one hundred firefighters from Lackawanna, Buffalo, and Hamburg. The fire caused several explosions, collapse of the roof, extensive structural damage, and necessitated evacuations of surrounding neighborhoods along with school closures due to smoke exposure concerns. Environmental authorities from federal and state agencies monitored potential health impacts as debris spread across Lackawanna and Hamburg. The fire continued burning into November 10, prolonging evacuations and road blockages.

Site redevelopment

In 1988, the EPA designated the Lackawanna Steel plant as a Superfund site following a Resource Conservation and Recovery Act (RCRA) Facility Assessment. New York State also classified it as a Class 2 Inactive Hazardous Waste Site, indicating considerable environmental hazards. By 1990, Bethlehem Steel—then operating under Tecumseh Redevelopment, Inc.—entered into an administrative consent order with the EPA to investigate and remediate hazardous waste contamination. RCRA Facility Investigation reports have been ongoing since that time, with completion extending beyond the initial target year of 2004. The location was further designated as a brownfield site in 2003 under the Small Business Liability Relief and Brownfields Revitalization Act to facilitate federal redevelopment support; however, formal agreements had not been finalized as of 2006.

In the late 1980s, the city of Lackawanna converted portions of the former steelworks into small business districts, generating nearly 700 employment opportunities.

The Steel Winds project—a wind farm consisting of eight turbines owned by BQ Energy—commenced operations on slag piles at the site in September 2006 and expanded by adding six more turbines by 2012.

By 2018, Erie County had acquired ownership of 240 acres within the complex, with remediation completed on approximately 140 acres that were partially transformed into recreational spaces including bike trails.

Historic sites

The original stone furnaces of the Lackawanna Steel Company, located near Scranton, Pennsylvania, were added to the National Register of Historic Places in 1991.

Additional company-related structures also hold historic designation, such as:

Lackawanna Steel in popular culture

In 2001, Tony Award recipient and playwright Ruben Santiago-Hudson created Lackawanna Blues, a solo theatrical piece portraying a dramatized account of his upbringing in Lackawanna, New York. The production, which earned two OBIE awards, includes characters linked to the Lackawanna Steel Company facility and emphasizes the company's influence on the local community.

See also

  • Bethlehem Steel topics
  • Ironworks and steel mills in Pennsylvania
  • Companies portal
  • Pennsylvania portal

References

  • A History of the City of Buffalo. Buffalo, N.Y.: The Buffalo Evening News, 1908.
  • "Announces Plans of New Steel Merger". The New York Times. December 9, 1915.
  • "Bankers Abandon Steel Co. Merger". The New York Times. February 6, 1916.
  • "Bethlehem Denies Merger Breaks Law". Associated Press. June 9, 1922.
  • "Bethlehem Is Apathetic". The New York Times. September 30, 1919.
  • "Bethlehem Merger Approved". The New York Times. May 17, 1922.
  • "Bethlehem Steel Settles Lawsuit Over Benefits". Associated Press. March 13, 1985.
  • "Bethlehem Steel to Buy Lackawanna, in $60,000,000 Deal". The New York Times. May 12, 1922.
  • "Bethlehem Steel to Recall 1,600". Associated Press. August 19, 1982.
  • "Bethlehem to Shut Plant by Oct. 15". Associated Press. August 25, 1983.
  • "Big Independents Out of Steel Merger". The New York Times. November 3, 1921.
  • "Big Steel Concern Formed". The New York Times. February 15, 1902.
  • "The Bitter Battle". Time. October 19, 1962.
  • Bodsworth, C. Sir Henry Bessemer: Father of the Steel Industry. London: Maney Publishing, 1998. ISBN 1-86125-054-1.
  • Brody, David. Labor in Crisis: The Steel Strike of 1919. Urbana, Ill.: University of Illinois Press, 1987. ISBN 0-252-01373-5.
  • Brody, David. Steelworkers in America: The Nonunion Era. New York: Harper Torchbooks, 1969. ISBN 0-252-06713-4.
  • Brownfields 2006 Grant Fact Sheet: Lackawanna, NY. U.S. Environmental Protection Agency. May 2006.
  • "Business Digest". The New York Times. December 28, 1982.
  • "Close 2 Plants At Buffalo". The New York Times. September 23, 1919.
  • "Closing Imperils 8,000 Employed in Related Work". United Press International. December 29, 1982.
  • Dublin, Thomas and Licht, Walter. The Face of Decline: The Pennsylvania Anthracite Region in the Twentieth Century. Ithaca, N.Y.: Cornell University Press, 2005. ISBN 0-8014-8473-1.
  • Dubofsky, Melvyn and Van Tine, Warren R. Labor Leaders in America. Urbana, Ill.: University of Illinois Press, 1987. ISBN 0-252-01343-3.
  • Federal Writer's Project. Pennsylvania: A Guide to the Keystone State. Murrieta, Calif.: U.S. History Publishers, 1940. ISBN 1-60354-037-7.
  • Foner, Philip S. History of the Labor Movement in the United States. Vol. 8: Postwar Struggles, 1918-1920. New York: International Publishers, 1988. ISBN 0-7178-0652-9.
  • Freudenheim, Milt. "Bethlehem Is Selling Some Mills". The New York Times. December 28, 1993.
  • Goldman, Mark. High Hopes: The Rise and Decline of Buffalo, New York. Albany, N.Y.: SUNY Press, 1984. ISBN 0-87395-734-2.
  • Hillstrom, Kevin and Hillstrom, Laurie Collier. The Industrial Revolution in America: Iron and Steel. Santa Barbara, Calif.: ABC-CLIO, 2005. ISBN 1-85109-620-5.
  • Hodas, Daniel P. The Business Career of Moses Taylor: Merchant, Finance Capitalist and Industrialist. New York: New York University Press, 1976. ISBN 0-8147-3374-3.
  • Hollister, Horace. History of the Lackawanna Valley. New York: Lippincott, 1885.
  • Jensen, Oliver. "'We Are All Descended from Grandfathers!'" American Heritage. June 1964.
  • Kashuba, Cheryl A.; Miller-Lanning, Darlene; and Sweeney, Alan. Scranton. Mount Pleasant, S.C.: Arcadia Publishing, 2005. ISBN 0-7385-3859-0.
  • Kilborn, Peter T. "The Twilight of Smokestack America". The New York Times. May 8, 1983.
  • Kurek, Albert S. The Troopers Are Coming: New York State Troopers, 1917–1943. Bloomington, Ind.: Rooftop Publishing, 2007. ISBN 1-60008-035-9.
  • "Lackawanna Bid Said to Fail". Associated Press. August 16, 1983.
  • "Lackawanna Fears Violence". The New York Times. September 22, 1919.
  • "Lackawanna Steel Deficit". The New York Times. October 12, 1921.
  • Lamoreaux, Naomi R. The Great Merger Movement in American Business,1895–1904. New York: Cambridge University Press,1985.ISBN0-521-35765-9.
  • Laurie,Cole.RoleofFederalMilitaryForcesinDomesticDisorders1877–1945.DarbyPa.:DIANEPublishing1999.ISBN0-7881-7747-8
  • Lewis,W.David."EarlyHistoryofLackawannaIronandCoalCompany:AStudyinTechnologicalAdaptation".PennsylvaniaMagazineofHistoryandBiography.October1972
  • Lowman,M.Dempsey."LivingOurLegacy".ScrantonTimes-Tribune.March302004
  • Press,Eyal.AbsoluteConvictions:MyFather,aCity,andtheConflictthatDividedAmerica.NewYork:Macmillan2006.ISBN0-8050-7731-6
  • Serrin,Williams."EconomicScene".TheNewYorkTimes.December221981
  • Staba,D."AnOldSteelMillRetoolsToProduceCleanEnergy".TheNewYorkTimes.May222007

External links

Retrieved from "https://www.alfawiki.org/index.php?title=Lackawanna_Steel_Company&oldid=7005"