04) LOCKOUT: THE ATTACK MODE OF CORPORATE LABOUR RELATIONS
By Sam Hammond, Hamilton
In 2003 the largest steel producer in Canada began a debacle of legendary proportions, as a completely solvent manufacturer, Stelco, was put into bankruptcy protection by bottom feeding financial adventurers. The debacle that ran through court proceedings for years resulted in wiping out the shareholders and restructuring the company. It was seized by a consortium for $150 million, and resold (to US Steel) in 2007 for $1.1 billion.
In a classic plunder, a small consortium seized a company, and with the assistance of the courts pocketed huge profits. The workers, members of Local 1005 USW, conducted a courageous and successful battle in the courts, in negotiations, in the streets and in front of the Ontario Legislature. Unlike more than 60,000 of their US brothers and sisters, they managed to save their pensions, most of their conditions, and the pensions and benefits of retirees. Their struggle is living proof that resistance is the only defense.
In 2006‑2007 the Euro‑Asian conglomerate Arcelor‑Mittal, the world's largest steelmaker, bought their way into NAFTA with the purchase of Canada's second largest steel maker, Dofasco of Hamilton, with the accompanying access to cheap Canadian power, iron ore and water.
The battle for the Hamilton waterfront was on. The American stealers moved decisively to shut out the Russians and Brazilians, buying Stelco outright for $1.1 billion, and assuming a $760 million debt and about $1.3 billion pension and healthcare liabilities. US Steel boasted they would pump $100 million into the Hamilton and Lake Erie plants. To seal the deal under the Investment Canada Act, US Steel promised in writing to maintain the 3600 jobs at the two plants, maintain production levels and provide a "net benefit" to Canada (31 binding obligations). The entire agreement was never made public.
US Steel promptly broke all its promises. It laid off and reduced the workforce, cut back on production, locked workers out (three times in three years), attacked pensions and benefits, and generally exposed itself as an arrogant foreign corporate raider.
Under pressure from the Steelworkers Union, this was too much for the federal government, which finally took US Steel to court over its blatant violations of the agreement. US Steel lost, appealed, and lost again at the Supreme Court (November 24th, 2011). The ground was laid for the first time ever to levy fines of $10,000 per day, going back to 2007. Frightened out of their skulls at their success in the Supreme Court against US Steel, the Harper Tories moved quickly for an out of court settlement that took the corporation off the hook and left the workers out in the cold.
Here is the settlement, as reported in the newsletter of the business law firm, Stikeman Elliot, December 13, 2011: "The final settlement requires U.S. Steel to continue producing steel in Canada for at least another four years, and to make substantial capital investments in its Hamilton and Lake Erie plants, totalling C$50 million. These undertakings are over and above U.S. Steel's original commitment to invest C$200 million in the Canadian plants by October 31, 2012. In addition, U.S. Steel has committed to making financial contributions of C$3 million to local communities. In the Minister's view, these additional investments mean that "U.S. Steel will continue operations in Canada that provide economic benefit to the communities of Hamilton and Nanticoke". Minister Paradis praised the settlement as achieving "benefits that in all likelihood would not have been obtained through the court process". A spokesperson for the steelmaker says that "the resolution reflects our ongoing and long term interest in doing business in Canada"
The $3 million to local communities appears to skeptics as a unique slush fund to local politicians, a tax refundable stroke of public relations to silence local vocals and buy image in a compliant media. Why not to laid off workers, or an unstable pension fund? This agreement was made on the heels of an eleven month lockout, where workers of Local 1005 in Hamilton held tight against the concessionary onslaught of US Steel and still had to give some concessions. If the original agreement had been enforced, the present jobs would have been 3600 instead of less than 2000 at the two plants. There would have been no lockouts that violated the commitment to maintain production. That was in 2011. Since then, of course, they have violated the main points of the out of court settlement continuously and contemptuously.
On April 30, 2012, at precisely 9:00 am, US Steel locked out about 1000 workers at Lake Erie, a repeat of their eight‑month lockout that ended in April 2010. In the 2010 lockout, pensions, COLA, wages, benefits, etc. were all on the block and the company was in attack mode. Although solid and militant, the workers lost ground.
In 2013, even though the Union had offered to sign a "status quo" agreement for another three years, US Steel locked the gates again. The concessionary appetite the bosses developed in 2009‑2010 is even more voracious in 2013. Apparently, feeding the beast does not assuage its hunger or dull its appetite. This was no surprise. Months ago, the company had informed the union that it would be training salaried personnel in production jobs in case of the need to maintain production. Years ago, that probably would have provoked immediate retaliation.
There has been a shift in the role assigned by big capital to its administrative and ideological state apparatus. The days when the state could dress itself in the robes of neutrality, and achieve hegemony as an arbiter between labour and capital, are gone in Canada. The new hegemony will be achieved not as an olive branch to sections of labour, but as a steel rod to flay workers and organize society against their organized section, the trade unions. That is why corporations have the confidence to go into the "attack mode". Stephen Harper openly talks of intervention in the public sector to reflect private sector conditions. Put in street language, it goes like this: intervene in the strongest private sector areas (auto, transportation, etc.); declare an imaginary threat to the public interest to override the right to organize, bargain or strike; drive the cost of labour power down, take away the Rand Formula and destroy the closed shop. When this is fully underway (albeit not complete), start the same process in the public sector.
The corporate world obviously has adopted the "first strike" strategy for labour relations, with the state as the implement. The trade unions are restless, but have so far not achieved anything approaching a united front against the attack. If the victims of the US Steel lockout at Lake Erie do not seem to have a tactical response, please do not blame them. Look instead at the Canadian Labour Congress in its rather long sleep since the offensive of capital escalated in 2008. If the general staff is asleep, what are the troops to do?
The long overdue need for labour unity and for a strategic tactical defense and counter‑attack that includes the national labour centres of Quebec is so far not on the horizon. Unity is no longer needed to win a bigger piece of the pie, or to win a better imaginary status in the illusion of pluralism or even a beggars' role at the corporate table. The achievement of unity now must be for the very future existence of an independent trade union movement, for a Charter of Rights for Labour.
(The above article is from the May 16-31, 2013, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)