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The American economy of the late twentieth century is in a state of transition [1]. Basic manufacturing industries, long the centerpiece of U. S. business, are giving way to the service sector and newer high technology industries [2]. In many respects, the U. S. steel industry is representative of the general state of basic industry in the U. S. in the 1980s and 1990s and, by extension, stands as a symbol of the common concerns about the global competitiveness of the American economy. Both the large integrated steel firms (eg: United States Steel (also referred to as USS and The Corporation) and the United Steelworkers of America (USWA) participated in this transition from an industry which built new capacity to meet increased domestic demand in the 1940s and 1950s, to an industry which in the 1980s faced continual plant closings and a decline in union membership in the 1980's from 1.5 million to approximately 700,000 members [3].This paper explores why the U. S. steel industry changed from being the largest steel industry in the world in 1945 to a condition of near extinction in 1985. In the early to mid-1980s, the popular business press was filled with stories about the decline of American manufacturing, particularly the decline of the once-great American steel industry [4]. During the same period a number of academics, particularly those in the areas of management and economics, were writing about the "decline" of the American steel industry [5]. The approach taken in most of these studies was one of attempting to discover where management went wrong, and why managers did not foresee "environmental changes". This form of explanation provides an external analysis of what went wrong, as well as the ability to recognize that a certain course of action works well in certain conditions. In analyzing and explaining the current state of basic industry in the U. S. this approach is able to place blame for "mistaken" decisions and to point out what went wrong and when [6]. The models developed from this form of explanation provide an analytical framework, but do not provide guidance in how to avoid the mistakes of the past. Knowing that the current state of basic industry is the result of a series of mistaken decisions

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