Jun 6, 2016
This article is reprinted from issue 73 of Workers’ Fight, the newspaper of the British revolutionary workers group of that name.
The possible closure of Tata Steel’s main operations means that up to 40,000 workers are under threat –15,000 employed by Tata and 25,000 by its suppliers.
This is the latest attack on steel jobs in a long series. Already, in the run-up to privatization, in 1988, almost 2/3 of the industry’s 156,000 jobs had been cut. And, by the time Tata Steel bought most of what remained of the privatized steel industry, in 2007, the workforce was down to 29,000.
Then, between last October and January, SSI, Caparo, and Tata Steel laid off more than 6,100 workers. If this new round of closures goes ahead, there will only be about 9,000 steelworkers left.
Today, almost everyone – from Labor Party leaders to union leaders – blames the steel industry’s crisis on China, which is accused of dumping its excess steel onto the world market at bargain-basement prices.
The real cause, however, is linked to the workings of the capitalist system itself. For a long time already, there has been a worldwide overproduction of steel, partly due to massive speculation on commodities and partly due to the consequences of the banking crisis. Today, production capacity is estimated to be 600 million tons a year more than actual demand. Compared to this, China’s exports of just over 100 million tons a year are hardly decisive!
This overproduction creates cut-throat competition between the steel giants. In order to protect their profits, they cut investment to the strict minimum while cutting the wage bill to the bare bone. And when, despite this, a plant does not produce enough profits to their liking, they just close it down.
The reality is that the capitalist economy is in the middle of an on-going crisis. Being based on the permanent competition between rival capitalists, its inability to plan its production according to need is already, in and of itself, a cause of chaos. But the fact that, in addition, the capitalists are able to make huge profits by speculating on everything that can be bought and sold – thanks to the sophisticated tools made available by financial markets – only results in increasing this chaos on a colossal scale.
The response of the steel unions was to present a plan to make the steel industry “viable.” They demand that “the government must invest in our steel industry to give it a future.”
As if it was in the steelworkers’ interests to make this industry “viable” – that is, profitable for the capitalists! As if offering to make an industry “viable” wasn’t volunteering to be more exploited!
If the Tata Steel workers lose their jobs, it will be a disaster for them – and a devastating blow for their communities. But does this mean that the only prospect they can be offered is to hang on, at all costs, to their dangerous jobs?
Instead of begging the government to bail out Tata, as the union leaders do, why shouldn’t Tata pay its debt to the workers who made its profits? And, with more than seven billion dollars in profits on assets worth 119 billion, it could easily pay all its workers their full wages for as long as it takes for them to find another job or retire on a generous pension!