Socialist Action /April 2002
National Steel Corporation Declares
Bankruptcy
By ADAM RITSCHER
DULUTH, Minn.-In early March, National Steel Corporation filed for Chapter
11 bankruptcy protection. National Steel is the fifth largest steel company
in the country, and its bankruptcy comes on the heels of that of Cleveland
Cliffs-which is the nation's number one iron ore producer.
Both corporations have blamed their financial difficulties on cheaper
foreign-made steel imports. Together with the United Steel Workers of America,
they have been fighting to get the government to set a tariff on steel imports
to make them more expensive, and therefore lessen the ability of foreign
steel companies to compete with U.S. producers.
President Bush recently responded to this campaign by setting a tariff,
but at levels far lower than lobbied for.
In a previous issue of Socialist Action, we talked about why we opposed
this alliance between the iron and steel companies and the steel workers
union-pointing out that nationalist protectionism wrongly pits American
workers against workers abroad. Developments coming out of the recent bankruptcy
of National Steel, however, illustrate another reason why labor needs a
different strategy to save workers' jobs, and to keep the mines and mills
open.
Following National Steel's declaration of bankruptcy and its attempts
to restructure its debt, an interesting article appeared in the March 2002
issue of Business North newspaper. Apparently, United States Steel (USX)
has now signed an agreement with Japan's NKK steel company (which is the
company that holds the majority of shares in National Steel Corp.) granting
USX the option to buy control of National Steel.
This would result in a significant consolidation of the U.S. steel industry,
and USX appears poised to act on the option agreement-if, they say, the
federal government intervenes to help with "restructuring and lowering
National Steel's employee/retiree legacy costs" and in getting a "progressive
new labor agreement" that would contain dramatic reduction in workers'
wages and benefits.
Some may remember USX as the steel company that claimed it needed a government
bailout to modernize its Pennsylvania and Ohio steel mills back in the 1980s
to keep up with foreign competition, but then shut down the same mills when
they got the money and invested it instead in shopping malls and oil fields!
The crisis in steel is indeed very real, as the 400 workers at National
Steel's taconite plant in Keewatin, Minn., will readily testify to.
These corporate wheelings and dealings are a direct threat to their livelihoods.
But to save the jobs of the Keewatin workers, and of iron and steel workers
nationwide, labor needs to break from its alliance with the self-serving
corporations whose only concern is making a profit, and instead fight for
the nationalization of the mines and mills under control of the workers.
Socialist Action /April 2002 |