National Steel Corporation Declares Bankruptcy


DULUTH, Minn.-In early March, National Steel Corporation filed for Chapter 11 bankruptcy protection. National Steel is the fifth largest steel company in the country, and its bankruptcy comes on the heels of that of Cleveland Cliffs-which is the nation’s number one iron ore producer.

Both corporations have blamed their financial difficulties on cheaper foreign-made steel imports. Together with the United Steel Workers of America, they have been fighting to get the government to set a tariff on steel imports to make them more expensive, and therefore lessen the ability of foreign steel companies to compete with U.S. producers.

President Bush recently responded to this campaign by setting a tariff, but at levels far lower than lobbied for.

In a previous issue of Socialist Action, we talked about why we opposed this alliance between the iron and steel companies and the steel workers union-pointing out that nationalist protectionism wrongly pits American workers against workers abroad. Developments coming out of the recent bankruptcy of National Steel, however, illustrate another reason why labor needs a different strategy to save workers’ jobs, and to keep the mines and mills open.

Following National Steel’s declaration of bankruptcy and its attempts to restructure its debt, an interesting article appeared in the March 2002 issue of Business North newspaper. Apparently, United States Steel (USX) has now signed an agreement with Japan’s NKK steel company (which is the company that holds the majority of shares in National Steel Corp.) granting USX the option to buy control of National Steel.

This would result in a significant consolidation of the U.S. steel industry, and USX appears poised to act on the option agreement-if, they say, the federal government intervenes to help with “restructuring and lowering National Steel’s employee/retiree legacy costs” and in getting a “progressive new labor agreement” that would contain dramatic reduction in workers’ wages and benefits.

Some may remember USX as the steel company that claimed it needed a government bailout to modernize its Pennsylvania and Ohio steel mills back in the 1980s to keep up with foreign competition, but then shut down the same mills when they got the money and invested it instead in shopping malls and oil fields!

The crisis in steel is indeed very real, as the 400 workers at National Steel’s taconite plant in Keewatin, Minn., will readily testify to.

These corporate wheelings and dealings are a direct threat to their livelihoods.

But to save the jobs of the Keewatin workers, and of iron and steel workers nationwide, labor needs to break from its alliance with the self-serving corporations whose only concern is making a profit, and instead fight for the nationalization of the mines and mills under control of the workers.

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[Editor’s note: We reprint this article by the Committee for the Abolition of Illegitimate Debt (CADTM). In 1989, the Bastille Appeal was launched, inviting popular movements throughout the world to unite in demanding the immediate and unconditional cancellation of the debt of the so-called developing countries. This crushing debt, along with neo-liberal macro-economic reforms imposed on the global South, has led to an explosion of worldwide inequality, mass poverty, flagrant injustice and the destruction of the environment.