The Guardian June 6, 2001

Some hard lessons at "agony steel" in globalisation and class war

by Liz Rowley

Algoma Steel sought bankruptcy protection last month after a C$76.8 million 
loss in the first quarter of the year. It was the 10th straight quarter in 
which the company had posted losses.

"Algoma is the 19th steel company in North America to seek bankruptcy 
protection or be in it", said Leo Gerard, International President of the 
United Steelworkers of America, and former President of District 6 in 

US Steel and Bethlehem Steel are two of the biggies in trouble now. But 
steel producers face problems everywhere in North America because of 
capitalist globalisation.

In the new global division of labour, dictated by transnational 
corporations, Canada will no longer have a strong steel industry, or a 
strong auto industry or agricultural sector.

What counts today is corporate profitability on a global scale.

The so-called "dirty" industries are being exported to offshore producers, 
because in the former Soviet Union, Asia and Latin America, wages are low, 
unions are weak, and labour and environmental standards are ineffective.

The steel industry  like auto  is crucial to Canada.

For workers and their families in Sault Ste Marie, Algoma was the employer 
for decades. If you didn't work for Algoma, you worked for a supplier, or 
your father or brother did, and you hoped your sons might get in too.

Thirty years ago, a job at Algoma meant your future security was assured. 
The fact that the mill was the only job in town meant little in the boom 

But in the early '80s, production techniques changed, and so did markets. 
Neo-conservatives like Ronald Reagan and Margaret Thatcher arrived, to 
usher in the transnational corporations and their global agenda and 
structures such as GATT, now known as the World Trade Organisation.

In 1992, Algoma Steel fell into bankruptcy protection. The Rae Government 
stepped in to save the town, and the jobs of more than 5000 workers.

The deal was that the workers had to buy in, put up their pensions as 
venture capital. The union became a partner with a 30 percent share in the 
company. But the workers had to take a wage cut, and more than 1100 had to 
take permanent layoffs.

Today the pension funds of 12,000 Algoma steelworkers and former 
steelworkers are on the line. Two employee trusts hold 24 percent of 
Algoma's stock. Stock value has plunged from C$16 a share in 1993 to 33 
cents today.

Wages are stuck at C$22.70 an hour, including bonuses. And the current 
collective agreement allows for the elimination of another 450 jobs by next 

Workers have every reason to call it "agony steel". What they will call 
their union, if the company closes and their jobs and pension disappear, 
may not be printable.

In 1992, the deal was hailed as a lifesaver, an example of what social 
democratic governments could do for workers. "Bringing labour and capital 
together for their mutual benefit" was the main idea.

At the time the Communist Party of Canada (CPC) refused to condemn the 
deal, recognising that workers had pinned all their hopes on the Rae 
Government. But the CPC did warn that the deal gave the company all the 
advantages, while the workers took all the risks, and their union was co-

Now, the workers are getting a look at the real face of tri-partism. The 
notion of social partnership is well and truly dead in the face of this 

For workers, tripartism has been a colossal set-up that may cost them 

The USWA are rightly trying to make the fight for Algoma a part of the 
fight for Canada, and for Canadian sovereignty. But to succeed the fight 
will need to be broader, and it cannot be won on the basis of supporting a 
corporation  profitable or unprofitable.

In 1992 the CPC proposed that provincial government aid for Algoma had to 
buy equity in the mill. That was rejected. If it had been done, the 
province (and the public) would now be a part owner in Algoma.

Nine years later, the CP proposal stands on its merits as a solution. 
Federal and provincial governments should "bail out" Algoma, and use the 
resulting leverage to buy a controlling interest.

In the process, 3900 workers would keep their jobs, 12,000 workers would 
see their pensions protected, and the 80,000 citizens of Sault Ste Marie 
could breathe a sigh of relief about the future of their community.

A diversified economy, including secondary industry and manufacturing, as 
well as construction and a strong auto industry, depends on a strong 
domestic steel industry.

Clearly, this won't be won without a fight. In fact, it's a key part of the 
fight against capitalist globalisation, for fair trade, for Canadian 
sovereignty, and for defending and expanding democracy and labour rights 
and standards.

For all these reasons, this struggle needs to be taken on by the labour 
movement as a whole, and made a people's issue in the bigger fight for a 
better world, where people come before profits.

* * *
People's Voice, Canada's leading communist newspaper (abridged).

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