Supreme Court Snubs Steelworkers’ Union



If you’re not a steelworker, you may have overlooked the few press reports that the steelworkers union in November failed to get a hearing from the U.S. Supreme Court on the union’s constitutional challenge to the North American Free Trade Agreement (NAFTA).

The United Steelworkers of America (USWA) intended to argue that since NAFTA was not approved by two-thirds of the Senate (a constitutional requirement for treaties), it was unconstitutional. The government opposed the Court’s even hearing the union’s case. In the end, the Court turned down the Steelworkers “without comment.”

Why the union’s leaders thought they had a chance to be heard, let alone win their argument, was not reported. Nor did the press report the reactions of rank-and-file steelworkers who face joblessness, as imports, mechanization, mergers, bankruptcies and a slowing economy threaten the roots of their security.

However, the Court’s rebuff doesn’t in itself immediately endanger the 700,000-strong union as an institution with a bureaucracy to provide for.

Dog-eat-dog competition

By the mid-1970s the war-ravaged national economies had been rebuilt. When new, state-of-the­art steel mills in Europe, Japan, and some of the former colonial nations came on line, competitive price pressures grew as the steel-making nations (given the nature of capitalism) were compelled to export their growing surpluses. Last year, global steel production was reported to have increased 7 percent to a record 747 million tons.

As postwar international competitive pressures grew, the U.S. steel bosses and the steelworkers union combined to fight for protective legislation, tariff increases, and government bailouts of failing steel companies.

The press recently reported, “Domestic companies and unions argue that American firms can recover only if the Bush administration imposes tariffs of between 30 and 50 percent and limits imports of foreign steel to pre-1998 levels.” On the other hand, companies that import steel argue that tariffs could ignite a general trade war and simultaneously raise prices on a wide array of consumer goods such as appliances and cars.

While the steelworkers union collaborated with the steel bosses to push the government for tariffs and subsidies, the bosses successfully demanded hundreds of millions of dollars in concessions from the union’s tops. The union officials praised the ranks for standing still while under the whip of the industry’s one-sided class warfare:

“Time and again our members have been asked to sacrifice on behalf of this industry. And time and again, when necessary we have heeded the call. Since 1980 we have worked with the companies to institute modern work practices, often in the face of great skepticism of our members.

“And we have accepted extremely modest wage and benefit improvements­allowing our standard of living to erode. [The “we” refers to actual steelworkers, not the union officers who penned the statement.] Since 1980, real wages (adjusted for inflation) for steelworkers have stagnated, while our productivity has increased by 174%.”

The forgoing is from a lengthy programmatic statement adopted by the steelworkers union on Jan. 23, 2001. At that time the union said, “Without immediate and comprehensive [government] action, we could easily witness the permanent loss of millions of tons of domestic steel-making capacity, tens of thousands of jobs, and pension and insurance benefits for hundreds of thousands of retirees and their widows.”

The same statement also contains some nominally brave, but actually hollow words: “Steelworkers want our companies to succeed. But the reality is that in today’s environment, further lowering our standard of living will not save the steel industry. Our concessions would simply line the pockets of Wall Street financiers and the giant companies that buy steel, doing nothing for steel companies or the job security of our members.

“We see no basis for re-opening our steel agreements. Companies will always look for concessions, but concessions are not the answer and most certainly are not the answer to the current crisis.”

LTV gets fresh concessions

But just 10 months later, on Nov. 27, the United Steelworkers of America announced that it had agreed to give the LTV steel corporation tens of millions of dollars in fresh concessions, including “some wage cuts, deferred wage increases, [and] additional efficiencies to be wrung from health costs, and accelerated use by LTV of union-negotiated Voluntary Employee Benefit Association (VEBA) funds.”

The new concessions follow on the heels of contract concessions in July that the firm’s steelworkers have yet to vote on.

LTV filed for bankruptcy in December 2000. Afterwards, the company asked a judge to annul all of its existing labor agreements-including those concerning retirement benefits for already retired steelworkers- and to approve a 32 percent cut in wages for current employees. LTV also asked the judge to induce a federal agency to approve a $250 million federally guaranteed loan for the firm.

The USWA bureaucrats initially opposed the move, holding rallies and threatening to strike if the company’s proposal was imposed by the courts. But by April 2001, the bureaucrats found themselves again at the bargaining table, which resulted in the concessionary agreement of last July.

In a statement dated July 9, the company said, “The tentative agreement allows for significant cost reduction and eliminates significantly more steelworkers’ jobs than the Company’s original proposal. The new agreement will enable LTV Steel, the nation’s third largest integrated steelmaker, to restructure as a lower cost competitor in the global steel marketplace….

“The tentative agreement reduces antiquated work rules and inefficient practices. … The Company also will gain the ability to reduce the permanent workforce by 1300 people. … [T]he tentative agreement, which expires on Feb. 1, 2006, includes improved profit-sharing and equity ownership plans that more closely link the personal financial benefits of its employees with the profitable performance of LTV Steel.”

Despite LTV’s crowing, however, and while the details of the agreement were still being worked out, the company went behind the backs of the union and, on Nov. 20, filed a request in federal court to allow it to close all of its steel-milling operations. This would entail closing down five facilities, including plants in Cleveland and the Chicago area. In response, the steelworkers union agreed to even more concessions.

Not only are the workers’ jobs at risk, so are the pensions and health benefits for retirees. The union is pressing the government to guarantee new loans of at least $250,000,000 to keep LTV viable. The money would be partly used to pay off LTV creditors, including investment banks.

Many major steel producers share LTV’s problems. U.S. Steel and Bethlehem Steel are proposing a consolidation of the U.S. steel industry. Like LTV, the two steel makers are also looking to get out of contractual obligations to their retirees.

“A merger could hinge upon the government’s willingness to help fund the billions of dollars worth of pension and retiree health costs that have crippled many U.S. steel companies. The top five U.S. producers have more than $10 billion of unfunded pension and health care obligations, said Michael Gambardella, a metals analyst at J.P. Morgan” (Reuters, Dec. 5, 2001).

The steelworkers union says it will send a delegation of rank-and-file members to Washington to lobby for the loan guarantees. But that’s a last-ditch effort, according to a top union official.

“We may obviously be on life support, but we’re going to fight like hell as long as we’ve got breath,” said David McCall, director of the USWA’s Ohio-based District 1.

In a prepared statement, the union says that LTV Steel “has been systematically undermined by its top management.” If the loans are approved, the union wants a new management team to take over. But if ever the welfare of workers required that a basic industry be nationalized under the democratic management of its work force, surely this is it.

The robbery of billions of dollars of pension and medical monies that the steel moguls solemnly agreed to pay in “good-faith” bargaining with its workers’ certified representatives, the steelworkers union, is more than enough indemnification for their holdings. In truth, it probably would be next to impossible to find a jury of 12 fair-minded workers who wouldn’t want to jail the LTV thieves and confiscate the steel mills.

But calling for the nationalizing of the steel plants in order to save the “investments” of a lifetime of toil by several generations of steelworkers is something the union will not do. Instead, the union tops will consider themselves fortunate if its members’ security and its retirees’ health needs remain in the hands of investment banks.

Meanwhile, they’ll pray that the next managers can meet the shareholders’ demands for “reasonable profits.” And what if their prayers aren’t answered? More concessions!

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