Wilbur Ross, the billionaire "king of bankruptcy" whom Trump officials say is in line to head the U.S. Department of Commerce, was a big beneficiary of five bankrupt steel companies shedding retiree benefits for 190,000 former and current workers onto a federal government rescue fund more than a decade ago.
Ross bought the bankrupt steel companies, packaged them together under his International Steel Group Inc. and sold them to Europe-based Mittal Steel Co. NV for more than $4 billion in stock and cash.
While Ross and his investors made huge profits, steel company retirees faced lower pensions and the government rescue fund, the deficit-ridden Pension Benefit Guaranty Corp., wobbled under the weight of $6.4 billion in new unfunded liabilities.
No one accused Ross of wrongdoing and Ross told The Inquirer in 2005 that the restructuring of the steel companies, including Bethlehem Steel, effectively saved U.S. factories and thousands of steel jobs.
"Those companies were failing," Ross said in an interview. "They would have been shut down. Bethlehem was days away from shutting down." In addition to Bethlehem, Ross acquired LTV Corp., Acme Steel Co., Weirton Steel Co. and Georgetown Steel Co.
Ross called the legacy steel company retiree benefits "crushing" and said the restructuring boosted competitiveness of the U.S. steel factories.
A steelworkers union leader said in 2005 that it was "good arranagement for Wilbur Ross and his return on investment, and it's been a good deal for us."
But other observers noted the "huge gap in fortunes" between long-time steelworkers and Ross and his investors.