Program of the National Labor Commission of the Communist Party USA

The crisis facing our steel industry is potentially deeper and more severe than the devastation that swept through the steel industry in the 1980s.

Steel is faced with a national and worldwide crisis of overproduction and underutilization that threatens to crush our steel industry. At last count, 16 steel companies had filed for bankruptcy relief. Economists and industry analysts are touting the "need" to shut down up to 40 million tons of production capacity nationwide. Banks are withholding loans until the industry adopts "restructuring" plans. Imports now fill over 40 percent of the home market.

The United Steel Workers of America (USWA) immediately responded to the crisis and put forward a plan for a Steel Revitalization Act to save the industry and jobs and benefits of steelworker families, adopted at the Basic Steel Conference.

Included in this initiative are some important new proposals, including:

Establishment of a $10-billion loan guarantee fund to be administered by a federal oversight panel, including the USWA, which will oversee tax monies that are loaned to the steel companies;

A 2 percent surcharge on steel tonnage, including imported steel, to guarantee pension and health benefits;

End all non-essential overtime and contracting out;

No contract concessions.

Worldwide crises

A World Steel Dynamics study shows worldwide steel capacity exceeds utilization by 275 million tons annually. Yet U.S. banks are investing billions of dollars in third world steel mills to exploit unorganized low-wage workers. The fight to save our steel industry has worldwide implications and steelworkers know the importance of solidarity with workers in Japan, Europe, South America and Africa, in winning battles to save their union at Ravenswood, Bridgestone-Firestone and other strikes and lockouts.

The impact of world solidarity against manipulation of the world economy by banks and corporations was dramatically shown in the "Battle in Seattle" against the World Trade Organization.

Protests will escalate as April demonstrations are being prepared against the Bush administration's proposal for a Free Trade Area of the Americas (FTAA), an extension of NAFTA to the entire western hemisphere. South American union leaders will explain that U.S. companies are guilty of lowering living standards and fighting unions in every country where they build plants.

Despite increasingly strict controls over steel imports imposed by the government, there was a glut in which steel imports reached half of all steel used in the United States the first half of year 2000. Why?

The 1998 crisis in Asian and South American economies threatened the loss of billions of dollars in investments for U.S. banks. The International Monetary Fund ordered a fire sale of Asian and South American manufactured goods, which resulted in a flood of steel imports into the U.S.

A vast industry has been set up in the United States to import, or "procure," this foreign steel and sell it in the U.S. as domestic steel. This procurement industry was built up to import unfinished and semi-finished steel slabs as blast furnaces were shut down nationwide, with only 40 still operating.

There is opposition in the steel industry to imposing import restrictions on anything except finished specialty steel. The steel companies themselves are responsible for the loss of thousands of jobs on the Minnesota iron range and in mills throughout the country.

Increase demand for steel

Far more has to be done if the U.S. steel industry is to be saved. By the end of last year, the industry was operating at less than 65 percent of capacity, the lowest operating level in more than 14 years.

Prices for steel products have fallen below their lowest point in the Asian crisis; 8,400 steelworker jobs have been lost in the last six months, 1,500 the last year.

Matters were brought to a head when LTV declared bankruptcy, coming on the heels of 15 other bankrupt steel companies. An Ohio Steel Caucus, including nearly the entire political structure in the state, came together to map out plans to save the industry.

The Congressional Steel Caucus introduced the USWA's Steel Revitalization Act with a ten billion dollar loan guarantee fund, and banks are being pressured to make loans available to the steel industry.

It is clear that failure to utilize present U.S. steel capacity is a major problem that has to be faced. Wall Street and the banks have their solution and are ordering a restructuring of the U.S. steel industry as was done in the 1980s. They're demanding steel companies merge, small companies be pushed out and plants closed, with the loss of thousands of jobs.

A far better answer

Loss of steel orders is growing as a result of a slow-down in the economy. The industry most affecting steel is the auto industry. Ford reflects industry trends with an announcement that output for 2001 will be 10 percent lower than 2000. Automotive production accounts for almost half of the output by some steel companies. In addition to automotive, demand for housing, farm machinery, appliances, transportation equipment, engines and turbines is falling.

If steel was being produced at a level needed to meet the needs of our country, there would not be enough steel capacity to meet the demand. The steelworkers estimate that only 80 percent of steel demand could be met with current capacity if our country's real need for steel was being fully utilized.

Rebuild nation's infrastructure

Our country's entire infrastructure is sorely in need of repair and rebuilding, with some sectors in a crisis state. Schools falling apart, the spreading energy crises, vast urban sewer systems crumbling, more and more homeless needing housing, farms wiped out by the thousands. Past studies have shown that 80 percent of our bridges are sorely in need of repair.

A policy paper issued by the Levy Institute decries the growing decline in public investment in the nation's infrastructure, showing that decline in maintenance and improvement in infrastructure not only jeopardizes public services and health, but contributes to an overall decline in the economy such as we are now experiencing.

The Institute proposes the establishment of a Federal Bank for the Infrastructure to provide $50 billion of interest-free loans to state and local governments for infrastructure repair, saying that this is a "means to assure the nation's economic future."

A comprehensive infrastructure repair and rebuilding program would not only utilize fully the present capacity of the steel industry but would require the rebuilding, modernizing, and retooling of old mills and/or the building of new modern high-tech mills. The transition to a new, modern steel industry would take place in phases with the protection of jobs and communities a major consideration, rather than the slash-and-burn tactics used in the 1980s.

Also in the bill would be a provision that only domestically produced steel be used. The USWA's demand for protection of jobs and communities in the Steel Revitalization Act is helpful.

Government's responsibility

There should be no illusions as to what the banks and steel corporations will do if left to their own devices. J.P. Morgan's bank owns U.S. Steel. Their concept of restructuring is to keep profits flowing into bank coffers with no consideration of jobs and communities.

Immediate action is needed by Congress to stop the destruction of steel capacity being demanded by Wall Street and the banks. This means federal action to keep mills from closing, including loans from the Federal Emergency Steel Loan Guarantee program (FESLG).

This fund has already been used to keep some mills afloat. However, Congress needs to overhaul the FESLG and all existing agencies responsible for granting loans to private corporations. Government panels to oversee loans are needed, as the USWA has proposed.

Our elected officials, not Wall Street, should be dictating the terms under which our tax monies will be loaned out and how they will be used. When private ownership of a vital industry such as steel fails to provide for the security and general welfare of working families and communities and the vital needs of our country for a robust steel industry, then those responsibilities fall on government.

If this means public ownership of the steel industry through the establishment of a Federal Steel Authority, so be it. Public ownership and control of basic industries such as steel and energy are far preferable to the economic anarchy and profit-gouging going on today.

Congressional responsibility for saving our steel industry and keeping the mills open extends also to protecting the pensions and health benefits of tens of thousands of retired steelworkers and their families.

The Federal Pension Guarantee program is good as far as it goes, but needs to be improved to fully cover the pensions of all retired steelworkers, with health benefits added. The USWA's proposal for industry-wide sharing of legacy costs through a 2 percent surcharge on all steel shipments would require the entire steel industry to share the cost of maintaining full pensions for retired steelworkers and their families.

Adding to problems of steel and all other industries is the escalating cost of energy in an industry infected with deregulation. Government is going to have to act to bring energy prices under control, as is being done in California with a growing demand for state ownership of electrical facilities.

How to win?

Steelworkers and their families are confronting a crisis of unparalleled magnitude with the virtual collapse of the steel industry occurring at a time when the reins of government power have been seized by extreme right-wing political forces beholden only to their corporate sponsors.

Only a fully united trade union movement can confront this concentration of corporate power. Labor, in turn, needs to be the organizing center for a people's coalition embracing every sector of the population victimized by the Bush administration.

Fortunately, building coalitions of labor, faith-based organizations, minority communities and pro-labor political leaders has been a centerpiece of trade union policy. Powerful forces have already united and are coming to the aid of the embattled steelworkers.

The steel crisis exposes the very nature of the capitalist system. Corporate owners and bankers have dictatorial control over the steel industry and make decisions based only on their profit margins, with no consideration whatsoever for the hardship, exploitation and misery forced on steelworkers, their families and communities.

Many of our trade unions and leaders called for socialism as the solution in years past. It is time for a serious discussion of an alternative to capitalist exploitation and greed.

We advocate Bill-of-Rights socialism based on the revolutionary and democratic traditions of our country, a system which is based on the idea that the democratic majority who create our nation's wealth should own it and determine how that wealth is used for the common good.