'Buy-outs': No cure for steel shutdowns

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Staughton Lynd, Singlejack Books (San Pedro, Calif.), 1982, 244 pp., $9.00 As long as anyone in Youngstown, Ohio, can remember, steel has played a vital role in the life of the city. Young men and women worked in the area mills as their fathers and grandfathers had done before. Much of the other industry in the city was built to serve the steel industry.

Oldtimers proudly recall the struggles necessary to organize the United Steelworkers of America (USWA). They talk about the company murders and the feeling of accomplishment when the initial collective bargaining agreements were signed.

Not long ago, Youngstown was one of the centers for the dues protest movement in the USWA. A dissident group called Rank and File Team (RAFT) promoted rank-and-file ratification of contracts, supported civil rights gains, and opposed productivity clauses and no-strike clauses in the basic-steel agreement. Members of this group were elected as officers of area basic-steel locals. The sign at the entrance to the Local 1462 hall proudly proclaims: "Home of the Rank and File."

As Staughton Lynd explains in his book, The Fight Against Shutdowns: Youngstown's Steel Mill Closings, because steelworkers felt their jobs would always be there, "they put up with boredom, and danger, and humiliating harassment from supervisors every day, trading off these indignities for the fringe benefits which would come to them from long service at a particluar plant."

But for 10,000 Youngstown workers and their families, any hopes for a secure future were shattered during three consecutive years when three large steel plant closings were announced. In September 1977, Youngstown Sheet & BOOK REVIEW Tube closed its Campbell Works, throwing 5000 out of work. A year later, J& L announced the closing of its Brier Hill Works, permanently laying off 1500 workers. Then, in November 1979, US Steel stated its intention to shut down two facilities: Ohio Works and McDonald Works at a cost of 3500 jobs.

No one questioned that the steel mills of the Mahoning Valley were old, technologically obsolete, and in need of modernization. Most still used open hearths rather than basic oxygen or electric furnaces. A 1976 study of the American steel industry described these facilities as among the least economically viable in the United States.

For years, Youngstown steelworkers had watched the area mills deteriorate, as needed funds were diverted elsewhere. They had listened to repeated company threats to close the mills if they didn't cut costs and increase their productivity in order to make the mills profitable. Yet, steel was such a vital part of their community that no one in Youngstown really believed that the mills would ever shut down.

On Sept. 19, 1977, a tersely worded company statement from Youngstown Sheet & Tube announcing 5000 layoffs ended this belief. The announcement came without a warning. A short time before, the company had assured the union that there were no grounds for shutdown rumors.

Worker-community ownership

Lynd's book is a sympathetic account of how Youngstown steelworkers responded to this shocking news. He writes as a participant in many of the discussions on possible means of defending jobs and as one of the lawyers who represented the local unions in court.

Lynd valuable the many efforts Youngstown workers made to save their jobs. He describes their initial faith in the companies, the government, and the union, as they became convinced that all they had to do was explain the justice of their cause.

Lynd also describes their increasing disillusionment as these forces seemed to conspire against their efforts. He tells of various tactics employed: petitions, attempts to join with the religious community in purchasing the mills, demonstrations, occupations of corporate headquarters, pressure on the USWA leadership, National Labor Relations Board complaints, and court suits.

On Sept. 25, 1977, the proposal which has been identified with the fight against plant closings in Youngstownworker-community ownership-was first raised. Although many steelworkers questioned the possibility of establishing what was to be called Community Steel Inc., this proposal gained favor since no one had any other suggestions as to how to keep the plants operating.

As one steelworker later explained, "Of course we knew it wouldn't work, but you can't criticize people for trying something they think might help save their job-the only alternative is for them to give up without a struggle. You have to keep fighting."

Steelworkers studied other examples of worker buyouts and concluded that plans that exchanged ESOP's (Employee Stock Ownership Plans) for pensions—or didn't provide for a strong union-had to be avoided. Yet, they realized that for the plan to work, serious cost-cutting measures were necessary.

On March 12, 1979, a meeting of several hundred steelworkers voted to approve an approach to labor costs which included support of the Basic Steel Contract, but allowed for incentives and manning to be locally negotiated. It also drastically reduced vacation time during the first years of the contract, and offered the workers the option of taking part of their pay in stock.

The plan promised real wage cuts, job combination, hiring without regard to seniority, and reduced benefits. It recognized that the new company would be competing in a capitalist economy, and proposed steps to make it competitive.

The steelworkers at this meeting also recognized that the worker "owners" would have little say over production decisions or working conditions. The company would go on much as before, only now the workers would be expected to assume the cost of the previous owner's bad management and failure to modernize.

Yet, while expressing serious reservations, most workers went along, feeling the only alternative was unemployment or a minimum wage job.

USWA leadership defaults

A recurrent theme throughout Lynd's book is the total default of the International and district leaderships of the USWA. International President Lloyd McBride compared the closing of a steel mill to that of a corner grocery store, saying that both are regrettable, but there is nothing that can be done about them.

In fact, the International officers tried to direct discussion away from means of preventing the mills from closing (or restarting the ones that had already closed), into accepting the closures and discussing early retirements and other shutdown benefits.

During the two contract negotiations since the Youngstown shutdowns, many locals have urged the International to incorporate language preventing plant closings. Instead, language was added to the contract which explicitly recognizes the right of the company to unilaterally close departments or entire plants.

In 1978 and 1980, Youngstown steelworkers tried unsuccessfully to take their case to the USWA International convention. The final response of the International was to abolish District 26—dividing the former Youngstown district among the three adjacent ones.

Although the International claimed this was done because the number of steelworkers in District 26 was no longer tem. He suggests a Swedish model of plant-closing legislation as more humane than what happened in Youngstown.

Lynd continues to view the buyout option as a viable one, arguing that the problem was with the government policies that denied the necessary loans. However, if the loans had been approved and the mills sold to the workers, this would not have solved the problem. The reopened mills would have been forced to compete in a capitalist economy. As such, they would either go bankrupt or make the necessary modernizations at the expense of the workers involved. Workers would have had no choice but to submit to this blackmail.

Some of the workers drew more far-reaching conclusions. One of the leaders of Local 1462 said, "We don't want your old obsolete junk that you can't use anymore. We want your most modern mills and we don't want to be bothered by concerns over their profitability-let the government nationalize them. However, we do want a say in how they're run and what their products are used for."

Lynd is right in arguing that investment decisions must take human needs into account, but he is wrong in thinking that such a policy can be followed short of nationalization under workers' control.

The Youngstown buyout plan also called for modernization with resultant job elimination and combination. If jobs in the steel industry are to be saved, the union movement must begin the fight for a shorter work week with no cut in pay.

The Youngstown steelworkers put up a heroic fight to save their jobs. They tried to obtain solidarity from other unions. However, their struggle remained largely isolated to the point that the workers became demoralized over the possibility of saving their jobs, and decided that the only course was to negotiate the best individual benefits possible.

The Youngstown experience also points to the futility of relying on "friends" in the Democratic or Republican parties. In 1980, some Youngstown steelworkers discussed running Local 1462 President Ed Mann for Congress as an independent.

As long as the steel industry remains in private hands there will be more Youngstowns. Steel bosses will continue to take the profits from the Youngstowns and invest them in other areas— often outside the steel industry-which provide a higher rate of return. Whatever partial gains can be won will only be achieved though mobilizations independent of the companies, their courts, and their parties.