Lackawanna Steel Company - Closure and Aftermath

Closure and Aftermath

In the 1970s and 1980s, Bethlehem Steel allowed the Lackawanna Steel plant to become obsolete. Foreign competition made it financially impossible to continue to manufacture most of the products produced at Lackawanna. Bethlehem Steel also disliked the high tax rates of the state of New York, and did not want to spend the millions of dollars in air and water pollution abatement which were required by state and federal authorities. The company built a new facility in Burns Harbor, Indiana, and stopped investing in new steel production methods at Lackawanna.

In 1982, Bethlehem Steel announced the closing of nearly all production at the Lackawanna Steel plant in New York. Bethlehem Steel, like many American steel companies, was encountering significant financial problems. Although the company made several public attempts to reassess the plant' viability and keep the plant open in the late 1970s, closure was a foregone conclusion for many. On June 25, 1982, Bethlehem Steel announced it would close the Lackawanna facility and lay off its remaining 10,000 workers in six weeks. The news meant the laying off of an additional 8,000 workers in Lackawanna, West Seneca, and Buffalo. An attempt was made to interest the Buffalo-based Gibraltar Steel Corporation in the plant, but this effort failed.

The Lackawanna Steel Co. plant closed on October 15, 1982. The company laid off workers in waves before the final closure, and transferred many others. On the day the plant closed, more than 6,000 workers lost their jobs (most of them high-paying). The city of Lackawanna's 22,700 people faced extremely large tax increases just to maintain basic services, as the amount of taxes paid by Bethlehem Steel fell from 66 percent of the city's revenue to just 8 percent. In addition, the city owed the company more than $5 million in tax overcharges. The United Steelworkers later successfully sued Bethlehem Steel for prematurely terminating the fringe benefits of the laid-off steelworkers.

The Lackawanna Steel Co, site was declared a Superfund site by the Environmental Protection Agency (EPA) in 1988 after the EPA conducted a Resource Conservation and Recovery Act (RCRA) Facility Assessment of the plant. The state of New York subsequently declared it a Class 2 Inactive Hazardous Waste Site, indicating the site poses a significant potential threat to human health and the environment. In August 1990, Bethlehem Steel (operating as Tecumseh Redevelopment, Inc.) and the EPA entered into an administrative consent order requiring Bethlehem Steel to identify the nature and extent of any releases of hazardous waste and mitigate any emergency situations that might be discovered during the course of the investigations. Bethlehem Steel and its successor corporations have been submitting RCRA Facility Investigation (RFI) reports since then. Although the RFI was due to be completed in 2004, it still was not complete as of June 2008. The site was also declared a brownfield in 2003 under the Small Business Liability Relief and Brownfields Revitalization Act of 2002. While this made the city of Lackawanna eligible for federal assistance money to redevelop the site, a cooperative agreement had not been signed as of May 2006.

The city of Lackawanna redeveloped some of the former Lackawanna Steel Co. land into small business zones, bringing about 700 jobs back to the town in the late 1980s. In 1993, Veritas Capital, Inc., purchased one of the bar, rod and wire plants on the old Lackawanna site and added another 250 jobs (the workers made automobile steering columns). Bethlehem Steel ended coke production at the Lackawanna site in 2001, and as of 2008 only a galvanized steel finishing plant employing about 250 people remained.

Steel Winds, an eight-windmill wind farm owned by BQ Energy, opened on the old plant's slag heaps in September 2006.