Socialist Action /December 2001
Supreme Court Snubs Steelworkers' Union
By CHARLES WALKER
If you're not a steelworker, you may have overlooked the few press reports
that the steelworkers union in November failed to get a hearing from the
U.S. Supreme Court on the union's constitutional challenge to the North
American Free Trade Agreement (NAFTA).
The United Steelworkers of America (USWA) intended to argue that since
NAFTA was not approved by two-thirds of the Senate (a constitutional requirement
for treaties), it was unconstitutional. The government opposed the Court's
even hearing the union's case. In the end, the Court turned down the Steelworkers
"without comment."
Why the union's leaders thought they had a chance to be heard, let alone
win their argument, was not reported. Nor did the press report the reactions
of rank-and-file steelworkers who face joblessness, as imports, mechanization,
mergers, bankruptcies and a slowing economy threaten the roots of their
security.
However, the Court's rebuff doesn't in itself immediately endanger the
700,000-strong union as an institution with a bureaucracy to provide for.
Dog-eat-dog competition
By the mid-1970s the war-ravaged national economies had been rebuilt.
When new, state-of-theart steel mills in Europe, Japan, and some of
the former colonial nations came on line, competitive price pressures grew
as the steel-making nations (given the nature of capitalism) were compelled
to export their growing surpluses. Last year, global steel production was
reported to have increased 7 percent to a record 747 million tons.
As postwar international competitive pressures grew, the U.S. steel bosses
and the steelworkers union combined to fight for protective legislation,
tariff increases, and government bailouts of failing steel companies.
The press recently reported, "Domestic companies and unions argue
that American firms can recover only if the Bush administration imposes
tariffs of between 30 and 50 percent and limits imports of foreign steel
to pre-1998 levels." On the other hand, companies that import steel
argue that tariffs could ignite a general trade war and simultaneously raise
prices on a wide array of consumer goods such as appliances and cars.
While the steelworkers union collaborated with the steel bosses to push
the government for tariffs and subsidies, the bosses successfully demanded
hundreds of millions of dollars in concessions from the union's tops. The
union officials praised the ranks for standing still while under the whip
of the industry's one-sided class warfare:
"Time and again our members have been asked to sacrifice on behalf
of this industry. And time and again, when necessary we have heeded the
call. Since 1980 we have worked with the companies to institute modern work
practices, often in the face of great skepticism of our members.
"And we have accepted extremely modest wage and benefit improvementsallowing
our standard of living to erode. [The "we" refers to actual steelworkers,
not the union officers who penned the statement.] Since 1980, real wages
(adjusted for inflation) for steelworkers have stagnated, while our productivity
has increased by 174%."
The forgoing is from a lengthy programmatic statement adopted by the
steelworkers union on Jan. 23, 2001. At that time the union said, "Without
immediate and comprehensive [government] action, we could easily witness
the permanent loss of millions of tons of domestic steel-making capacity,
tens of thousands of jobs, and pension and insurance benefits for hundreds
of thousands of retirees and their widows."
The same statement also contains some nominally brave, but actually hollow
words: "Steelworkers want our companies to succeed. But the reality
is that in today's environment, further lowering our standard of living
will not save the steel industry. Our concessions would simply line the
pockets of Wall Street financiers and the giant companies that buy steel,
doing nothing for steel companies or the job security of our members.
"We see no basis for re-opening our steel agreements. Companies
will always look for concessions, but concessions are not the answer and
most certainly are not the answer to the current crisis."
LTV gets fresh concessions
But just 10 months later, on Nov. 27, the United Steelworkers of America
announced that it had agreed to give the LTV steel corporation tens of millions
of dollars in fresh concessions, including "some wage cuts, deferred
wage increases, [and] additional efficiencies to be wrung from health costs,
and accelerated use by LTV of union-negotiated Voluntary Employee Benefit
Association (VEBA) funds."
The new concessions follow on the heels of contract concessions in July
that the firm's steelworkers have yet to vote on.
LTV filed for bankruptcy in December 2000. Afterwards, the company asked
a judge to annul all of its existing labor agreements-including those concerning
retirement benefits for already retired steelworkers- and to approve a 32
percent cut in wages for current employees. LTV also asked the judge to
induce a federal agency to approve a $250 million federally guaranteed loan
for the firm.
The USWA bureaucrats initially opposed the move, holding rallies and
threatening to strike if the company's proposal was imposed by the courts.
But by April 2001, the bureaucrats found themselves again at the bargaining
table, which resulted in the concessionary agreement of last July.
In a statement dated July 9, the company said, "The tentative agreement
allows for significant cost reduction and eliminates significantly more
steelworkers' jobs than the Company's original proposal. The new agreement
will enable LTV Steel, the nation's third largest integrated steelmaker,
to restructure as a lower cost competitor in the global steel marketplace....
"The tentative agreement reduces antiquated work rules and inefficient
practices. ... The Company also will gain the ability to reduce the permanent
workforce by 1300 people. ... [T]he tentative agreement, which expires on
Feb. 1, 2006, includes improved profit-sharing and equity ownership plans
that more closely link the personal financial benefits of its employees
with the profitable performance of LTV Steel."
Despite LTV's crowing, however, and while the details of the agreement
were still being worked out, the company went behind the backs of the union
and, on Nov. 20, filed a request in federal court to allow it to close all
of its steel-milling operations. This would entail closing down five facilities,
including plants in Cleveland and the Chicago area. In response, the steelworkers
union agreed to even more concessions.
Not only are the workers' jobs at risk, so are the pensions and health
benefits for retirees. The union is pressing the government to guarantee
new loans of at least $250,000,000 to keep LTV viable. The money would be
partly used to pay off LTV creditors, including investment banks.
Many major steel producers share LTV's problems. U.S. Steel and Bethlehem
Steel are proposing a consolidation of the U.S. steel industry. Like LTV,
the two steel makers are also looking to get out of contractual obligations
to their retirees.
"A merger could hinge upon the government's willingness to help
fund the billions of dollars worth of pension and retiree health costs that
have crippled many U.S. steel companies. The top five U.S. producers have
more than $10 billion of unfunded pension and health care obligations, said
Michael Gambardella, a metals analyst at J.P. Morgan" (Reuters, Dec.
5, 2001).
The steelworkers union says it will send a delegation of rank-and-file
members to Washington to lobby for the loan guarantees. But that's a last-ditch
effort, according to a top union official.
"We may obviously be on life support, but we're going to fight like
hell as long as we've got breath," said David McCall, director of the
USWA's Ohio-based District 1.
In a prepared statement, the union says that LTV Steel "has been
systematically undermined by its top management." If the loans are
approved, the union wants a new management team to take over. But if ever
the welfare of workers required that a basic industry be nationalized under
the democratic management of its work force, surely this is it.
The robbery of billions of dollars of pension and medical monies that
the steel moguls solemnly agreed to pay in "good-faith" bargaining
with its workers' certified representatives, the steelworkers union, is
more than enough indemnification for their holdings. In truth, it probably
would be next to impossible to find a jury of 12 fair-minded workers who
wouldn't want to jail the LTV thieves and confiscate the steel mills.
But calling for the nationalizing of the steel plants in order to save
the "investments" of a lifetime of toil by several generations
of steelworkers is something the union will not do. Instead, the union tops
will consider themselves fortunate if its members' security and its retirees'
health needs remain in the hands of investment banks.
Meanwhile, they'll pray that the next managers can meet the shareholders'
demands for "reasonable profits." And what if their prayers aren't
answered? More concessions!
Socialist Action /December 2001 |