International Steel Group (ISG) Seeks United Team to Compete Globally

Two acquisitions since the fall of Bethlehem Steel in April 2003 are a bit daunting. But, with a capacity to annually produce more than 1.2 million tons of differing types of steel products, Steelton has value. The plant’s 44-inch / 28-inch rolling mill makes semi-finished blooms and rail used for freight lines. Its 20-inch mill makes flats and special sections, for companies such as Caterpillar. The facility, more than 150 years old, had at its high point in the 1940’s more than 16,000 workers. Having been a marginal facility since the late ‘80s, ISG’s acquisition in 2003 helped the organization return to profitability through some very drastic measures.

“You may remember that Bethlehem Steel was trying to remain profitable with 130,000 retirees taking pensions and only 13,000 employees making steel,” said Roy L. Cross, division manager, rolling mills, ISG. “That, as we all found out, was impossible. Our identity crisis was based on the fact that on Friday, May 8, 2003, we were owned by Bethlehem Steel, and the next Monday, by ISG. No plant shutdown, no immediate layoffs. Just an outright takeover of one company over another’s assets. But, right off the bat, we made money with ISG, although the struggle for profit margins continues with the increased cost of our No. 1 raw material, scrap iron.”

Having worked in steel making for more than 39 years, with 21 years served at the Steelton location, Cross is fiercely loyal and abundantly knowledgeable about the dangers and opportunities in this rugged, highly competitive industry. “We survive by taking on more and more with fewer resources,” he said. “Yet, under ISG, the autonomy to let us succeed has helped up sustain profitability. Every single employee is making decisions critical to success. There is no longer anyone else to ask, to blame, to seek permission from. We have the work ethic to do it, and we are.

“Our state-of-the art steelmaking and rail- finishing capabilities, our highly productive work force and the good relationships forged between management and United Steelworkers Union Local 1688 have been critical to implementing the mill upgrade plan that set the stage to better utilize our capabilities,” he continued. “We have what it takes, but our culture is still not at a level where we can tap into and maximize our employees’ skills.”

“Today, the union contributes ideas and initiates a lot of the management decisions,” said USW Local 1688 President Greg Bowers, a Steelton employee for 30 years. “The fact is, there are less management layers. Our coordinators supervise each turn and are providing leadership on the floor. And, the fact is, they are making more money than they had in the past as well. But it is a big challenge to get consistent contributions from the whole work force.”

The Start of Skill-Building, for New and Old Employees

From a human resources standpoint, Steelton has some challenges:

• Its work force has high seniority, and its culture is engrained;
• New hires for steel-making practices come without requisite skills;
• Decentralization and reduction in management personnel require more skills from less experienced employees, no matter the seniority.

“Our work force age is pretty high and business has increased,” said Cross. “So we’ve had to start hiring, with new employees helping with the cultural change. Today we seek out individuals who may not have steel-making skills per se, but they are oriented in being a part of a solution-oriented work force team.”

The process begins with hiring through the state, utilizing new, flexible job descriptions, testing, an interview process and the offer to join a “family sustaining job initiative.”

“We do this to see if the individuals are the right fit for us,” said Pat McHugh, Steelton’s training coordinator, with 28 years of service. “We want them to be sure that they know what they are getting into, and that there are no surprises.”

New and old employees, with limited skills and experienced practices. With some old work habits in a new flexible culture. With less management and more hands-on decision-making. And a no-longer-acceptable philosophy: it’s not my job. Where to go from here?

Enter Northampton Community College’s Center for Business and Industry.

Continuous Training for Continuous Motivation

“I hooked up with Northampton Community College (NCC) when exploring the WEDnet PA funding programs offered by the state, knowing that NCC administered the program,” said McHugh. “We were also aware that Don Robertson and Donna Goss, who had been part of Bethlehem Steel’s senior training development team, had joined NCC’s Center for Business Industry, heading up its new Leadership Development Institute.”

Continued Pat, “The question was fundamental: ‘What were we going to do now that we were not Bethlehem Steel, but rather ISG, with significantly less management levels?’ We knew it was going to take all the leadership awareness training we could find, with individually offered lessons if need be to have our employees take on initiatives to control their work environment. People had to learn how to solve problems together and how to communicate two-ways.”

"The work conducted at ISG-Steelton is a great example of the power of partnerships," says Donna Goss, co-driector of NCC's Leadership Development Institute. "Not only did we design the program with input from management and union, both parties were active participants in helping facilitate the classroom sessions. It is gratifying to work in an organization such as ISG-Steelton which supports training by budgeting time and money toward it, but more importantly views training as a process not as an event."

“ISG encouraged local decision making,” said Cross. “The only time they seek approval is when we are doing something that will have a financial impact. Our training and development for the most part is grant-funded, so we are providing motivation and inspiration as funding reveals itself.”

“Working with Steelton is both a challenge and a satisfying opportunity,” opines Don Robertson, co-director of the Leadership Development Institute at NCC’s Center for Business & Industry. “The leadership of the union and management lends itself to finding ways to help the business be successful. That opens the door for doing training in a two-way fashion avoiding issues that hinder implementation of what is being presented.”

At Steelton, training and development translates into seven different critical support programs:

• Dislocated workers’ program – administered at Harrisburg Community College through a $500,000 grant by the Department of Labor and Industry to 250 of Steelton’s former employees;
• Steelworkers’ Institute for Career Development – at 53 locations, career development courses are offered and funded through $.15/hour per employee contributions going into an educational fund that was negotiated in the 1989 labor contract;
• Leadership development training – From May through July 2004, NCC’s Leadership Development Institute offered six, half-day workshops on “Enhancing Team Effectiveness” to more than 60 ISG Steelton employees, promoting the skills needed for more accountability on the job and better communication amongst employees; funding was provided through a Wednet grant and through a $400,000 Department of Community and Economic Development grant; “Incentive Communication Teams” have been formed with leadership roles and profit-sharing incentives defined; consultation is ongoing and more employees are scheduled to participate in this training; goal setting is a future priority;
• Industrial-related training – with a proposed project start of January 2005, this training is a three-year comprehensive maintenance training project for ISG Steelton, Dura Bond Corp. in Steelton and U.S. Steel in Fairless Hills, covering hands-on electrical, mechanical, HVAC, programmable logic controllers and welding areas, all delivered on-site; it will benefit more than 110 employees in maintenance mechanical areas; the needs assessment is completed and a training application has been filed by NCC’s Center for Business & Industry to receive $524,000 in Customized Job Training funding from the Department of Labor and Industry in order to carry out the training;
• College tuition – through tuition reimbursement benefits offered by Career Development and ISG;
• Quality control training – ongoing and being upgraded;
• Safety training – ongoing, required programming.

The Rail Ahead

“I’ve never seen anything like the changes we are seeing,” said Bowers. “Although we have a long way to go, with approximately 10 percent of the work force in these training programs, we have begun to listen to one another. We’ve been fortunate that what we have been working to achieve, ISG management is allowing us to make happen.”

Said McHugh: “NCC has been a godsend for us. They helped us get our managers in the mills and our employees to think like managers. Employees are grasping the notion that they are the experts, to take responsibility in making decisions. We are creative working teams that represent steel making and rewarding them with incentives for their success.”

“ISG has allowed the stakeholders at Steelton to take control of their destiny,” concurs NCC’s Robertson. “That has sent a very different signal about working together and the local leadership has stepped up to it. Roy, Pat and Greg have specific outcomes they are seeking and are holding us accountable to help achieve those outcomes. That's the kind of partnership we seek in working with clients. Training needs to be viewed as a tool to help accomplish a result; not the result.”

Added Cross: “Training like this was seen as soft, immeasurable stuff in the past. We therefore did not take full advantage of the educational resources as much as we needed to be successful. Today we know that this continuous support is critical to our survival.”

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