Steel industry boosting profits, squeezing labor

by Herb Kaye

This article was reprinted from the August 3, 1996 issue of the People's Weekly World. For subscription information see below. All rights reserved - may be used with PWW credits.

In a prominent front page article in the July 18 Wall Sreet Journal, steel industry executives bemoan declining profits and seek to blame the "usual suspects" - the high cost of labor, price wars, and high fixed costs.

To a great extent, this is part of the companies' strategy to generate public opposition to the demand of the Steelworkers Union (USWA) for a $1.50 an hour wage increase and an additional two weeks of vacation.

Some 60,000 members of the United Steelworkers of America who work in the nation's huge integrated steel mills are involved in compulsory arbitration hearings with five of the nation's largest companies - Bethlehem, Inland, National, LTV and USX.

In these hearings the arbitrator must choose either the proposal of the union or that of the company. In most instances only "economic" issues are open for negotiation. However, in the case of National, this can fashion a compromise. As this is written, the arbitrator has ruled in favor of Bethlehem, granting a first year increase of 50-cents-per-hour and 25 cent raises in each of the next two years. Hearings at Inland will begin Aug. 12, National Steel on Sept. 17, with the dates for LTV and USX Steel as yet unannounced.

Wage reopeners are provided after the third year of the six year contracts signed between the union and the major steel companies in 1993. During these three years, company profits have risen by 43 percent with USX raking in $574 million; Bethlehem - $284.8 million; Inland - $254.2 million; and LTV - $326.2 million.

At National, the union proposed improvements in health insurance and in health care plans for retired members. It is also seeking language to prevent National from participating in non-union joint ventures such as LTV is attempting with TRICO,its joint venture with British Steel and Sumitomo now under construction in Decatur, Alabama.

Precedent for such an agreement was established by the more than 11,000 members of USWA locals 2176 and 4382 at Gulf States Steel based in Gadsen, Alabama. There the union won a contract that requires the company to"card check recognition" in any new facility if the union can show that a majority of the workers desire union recognition. The agreement also calls for health insurance for retirees and for wage increases added to base pay rather than given in the form of bonuses. With Inland, the union also proposed improvements in pension benefits to bring them in line with other major steel companies.

Productivity in the steel industry is at an all time high - and a workforce barely half the size of 10 years ago. Nor have the wages of U.S. steelworkers kept pace with inflation or the wages of their counterparts in Germany, Japan, Sweden and other industrialized countries.

The same Journal article raises an interesting question: "What if demand dwindles?"

This is not a question out of the blue by a writer who may get paid by the word. Far from it. It is a serious question, made even more urgent by the more than 20 percent decline in construction of apartment buildings in June and the announcement that the Whirlpool Corp. is planning to cut 550-800 jobs at its Evansville, Ind. plant by the first quarter of 1997 because of reduced demand for home refrigerators.

A lot of steel goes into the production of houses and the appliances that go into them, and the jobs of many steelworkers are affected by these cuts in the steel market.

This points to the importance of the 1996 elections for steelworkers and their union. Defeat of the ultra right in this years elections will offer new opportunities to win living wage legislation at the local and state level and legislation such as HR-1591, the public works jobs bill authored by Rep. Matthew Martinez (D-Calif.).

Passage of federally-funded jobs legislation would mean that steelworkers and other workers and unemployed people could buy more houses, refrigerators, washing machines and thus increase the need for steel.

Public works projects such as are called for in the Martinez Bill means providing jobs and training for hundreds of thousands of unemployed and putting them to work at decent wages, building or rebuilding the housing, bridges, sewers and water systems of our cities that are falling apart - and this, too, requires lots of steel and would create lots of jobs for steelworkers.

Contract negotiations and union conventions that take place in an election year are always watched closely by pundits and pollsters alike as they attempt to gauge their impact on the voting public. This is particularly true this year when the entire labor movement is engaged in a united campaign to prevent a right-wing takeover of the White House to reinforce its control of Congress and the Supreme Court.

Steelabor, official organ of the USWA, put it plainly in a recent issue: "The USWA and all workers and unions have a two front war to fight," the editors said, adding that "front one" was the mobilization of members in every local union to track anti-worker bills in Congress and state legislatures and "mount quick response campaigns to defeat them."

The article said the 1996 elections are "front two" and urged the USWA "to charge into the campaign with the goal of keeping anti-worker candidates out of the White House and ousting right-wing legislative majorities."