Restructuring of steel industry

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CLEVELAND—A little over a year ago, the United Steelworkers of America (USWA) signed an agreement with the basic steel companies which resulted in wage and benefit concessions that will cost the average steelworker a minimum of $11,745 over the course of the contract.

Although the old agreement hadn't yet expired, top union officials had been pushing for months to reopen the old contract and grant concessions to what they described as an ailing industry. These union officers argued that the well-being of steelworkers is integrally tied to the profitability of steel companies.

Two previous concession agreements were voted down by the basic steel local presidents. The second agreement had been pushed by the top union bureaucracy as the best possible deal under the circumstances.

The final agreement wasn't much better than the one that was turned down a few months before. Reflecting the disintegration of the organized opposition in the USWA following the 1977 defeat of the Sadlowski campaign, local union presidents who opposed concessions weren't able to organize to effectively explain their views.

USWA members in basic steel don't have the right to vote on their contracts. Therefore, this concession agreement was never presented to the membership for approval or rejection. The presidents weren't even allowed time to take the proposed agreement back to discuss with members of their locals as many had pledged to do. Although there was widespread dissatisfaction over the provisions of this agreement, some steelworkers felt that, bad as it was, it might help protect their jobs and put some laid off steelworkers back to work.

Business of making money A year under this concession agreement has made it clear that these concessions didn't put people back to work or lead to investments to modernize existing facilities and prevent plant closings.

Instead, these concessions provided the necessary capital to allow companies to diversify outside the steel industry. US Steel Chairman David Roderick summed up the steel bosses' position when he said, "US steel is not in the business of making steel. It is in the business of making money."

Big business economists assert that there is still too much steel capacity in the world and that much of this excess capacity is in the United States. In 1977, U.S. steel capacity stood at 160 million tons. Now, it's down to 136 million tons-a 10 percent drop in the last year alone. 8 Socialist Action April 1984 The results of these corporate decisions to scale down steel capacity in order to increase profitability have been devastating on steelworkers. In the past three years, the membership of the USWA has declined from 1.4 million to 725,000. Basic steel employment has suffered a similar decline. In 1953, there were 571,000 basic steel workers. By March 1982, this figure had dropped to 234,000. In 1981 alone, 78,000 lost their jobs. In November 1982, there were 152,000 working basic steel workers—a decline of 150,000 from peak 1981 employment. Of these 150,000, it's estimated that 90,000 will never return.

Despite an upturn in the economy and modest business recovery, the outlook for 1984 remains uncertain at best for 60 62 '64 '66 '68 Socialist Action/Joe Ryan slated to be closed by US Steel.

the average steelworker. In fact, despite a 3.8 percent increase in shipments during the first nine months of 1983, as compared to a similar period in 1982, there was an 18.9 percent decrease in employment. Now, with the "recovery" in full swing, only 252,000 steelworkers are still on the job.

Conditions for these working steelworkers have steadily worsened as the bosses play on workers' fear of job loss to force through speedup, job combinations, and wage and benefit concessions.

Republic-J & L merger On Sept. 28, 1983, Jones and Laughlin (a subsidiary of LTV Corp.) and Republic Steel announced their intention to merge. They plan to form a new steel company called LTV Steel which will be the second largest in the United States.

This $770 million proposed merger would result in a company with 24.2 million ton capacity, controlling 15.8 percent of the U.S. market. (US Steel, the largest American steel company, controls 16.4 percent of the U.S. market.) The new company would employ 64,500— including 17,000 currently on lay-off.

Once this merger goes through, thousands more steelworkers will lose their jobs as the new company combines its facilities to keep only the most efficient and profitable operations from both 2282 100 '70 '72 '74 '76 "78 '80 '82'83 companies. Even before the merger was completed, Republic announced plans to permanently close its Buffalo mill.

The bosses are trying to take advantage of workers' confusion over the effects the merger will have on their lives by using blackmail techniques to increase productivity. In Cleveland, a large J & L mill is adjacent to a large Republic mill. J & L workers were told they can expect to lose their jobs if they don't give up their better incentives. Republic maintenance workers were threatened with J& L's practice of contracting out more work. Workers at both mills were advised they'd better give up such local working conditions as lunch breaks and wash-up time if they wanted to continue working.

Similarly, workers at Republic's Warren, Ohio, mill were told they need to become more productive than the Cleveland facilities, or their jobs will be lost.

Republic's Gadsden, Ala., facilities are generally regarded as among its least modern. The work force has been cut from 3000 to 1800. The company demanded a number of local work-rule concessions which the union granted Although the mill has turned a profit, the company has refused to invest in needed capital improvements-instead demanding additional wholesale gutting of work rules before even considering the investment.

"fair-minded policy"

On Feb. 15, 1984, Assistant Attorney General J. Paul McGrath announced that his investigation found that the proposed merger violated provisions of the Clayton Anti-Trust Act by causing too great a concentration of two steel product lines. Lest anyone get the impression that the Justice Department had suddenly become concerned about the interests of working people, McGrath, in addressing the National Association of Manufacturers, explained: "We plan to pursue an active, vigorous and fairminded enforcement policy—one that recognizes the contribution that mergers make to the free-market system but that also recognizes the economic threat posed by some mergers."

Lawyers for J & L and Republic immediately began working out a new deal to meet the objections of the Justice Department. At the same time, Commerce Secretary Malcolm Baldridge and U.S. Trade Representative William Brock criticized the Justice Department decision. Even President Ronald Reagan and Vice President George Bush got in the act, expressing their pro-merger feelings.

Finally, to no one's surprise, McGrath announced that a merger plan answering his original objections had been worked out. This involved an agreement that Republic would divest itself of its Gadsden, Ala. mill and its Massillon, Ohio, stainless mill. McGrath insisted these facilities are to be sold, not shut down. There has been considerable speculation as to who the final buyers will be, but one real possibility is that the workers will be finagled into buying the plants.

US Steel blackmail

In December, US Steel announced its plans to permanently close a number of facilities, laying off 15,400 workers. F several months before this announ ment, the company presented the wor ers with various blackmail schemes.

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MERGERS AND BANKRUPTCIES - At the US Steel Lorain-Cuyahoga