Jan 9, 2017
Wilbur Ross, proposed by Donald Trump as the next secretary of commerce, made his millions buying bankrupt companies.
He turned these bankrupt companies into properties worth billions by laying off thousands of workers, refusing to pay into their pension funds, and ending medical coverage for retirees and their families.
Ross bought Bethlehem Steel in 2001, including the Sparrows Point plant on the outskirts of Baltimore, which had once employed 30,000. At the point Ross bought Bethlehem, it still had about 4,000 workers in Baltimore. Ross’s group spent about 450 million dollars to buy Bethlehem. Three years later, Ross sold it to another steel company for four and a half billion dollars – 10 times what they spent!
Bethlehem Steel continued its steep decline under Ross and subsequent management. Layoffs continued, pensions were cut and workers had to pay the medical costs they had once been promised in retirement.
Executives, of course, didn’t talk of the expensive debt accumulated when plants changed hands, nor the tremendous productivity gains that allowed one steelworker to produce as much steel as had three steelworkers a generation earlier. It was always easier for the bosses to blame “foreign” steel, with lower-paid workers.
Ross used the bankruptcy courts before other bosses did – in purchasing textile companies, steel companies and later coal companies, then shedding any obligation to laid-off and retired workers. That is how Ross and others like him became billionaires.