Jan 20, 2003
While the sharks of the steel industry are busy gobbling up each other, they are also trying to gobble up all of the steelworkers' pension plans.
Early this month, U.S. Steel (USS) bought the bankrupt National Steel, with its subsidiary Great Lakes Steel. And International Steel Group (ISG) proposed to buy bankrupt Bethlehem Steel. ISG used to be LTV Steel, before LTV went bankrupt and changed owners.
Among the new owners' very first words were, "we can't afford to pay these pensions and health care plans."
It wasn't the workers who bossed these companies into bankruptcy! It wasn't the workers who drained off profits into their personal accounts, while riding the companies into the ground. Yet the workers, who made all the steel that made all the profits, are the first to be attacked.
How do these companies go bankrupt? When they can't hope to repay their debts any more. And why do they have these debts? Because in their drive to reduce competition, the larger buy up the smaller. They don't buy with cash, they buy with borrowed funds, and they put up their own stock as security for the loans. But as we have learned all too well, stock prices can drop just as rapidly as they rise.
Did the new owners put aside enough profits in reserve funds to carry them through? Did they pay down this debt load to minimize their risk? Oh no. Exactly the opposite. They drained the good years' profits as dividends into their personal accounts, and they used the book value of their companies to play the international financial markets.
When the bubble burst, they'd made years of good money. So they just declare bankruptcy again under another name.
It's a great scheme. Except for the workers, who have not had the years and years of profits to put in their bank accounts. The workers have whatever small pension plans they've been able to pry out of the companies.
To keep those pension plans the workers are going to have to fight just as hard as an earlier generation once fought to force the companies to give them. Then, too, the bosses said they didn't have enough money. But then too, just like now, the bosses had plenty of accumulated profits they could tap! What it took to get them was the determination of the workers to wrest the money from the wealthy class which owns all the corporations.