Feb 13, 2006
The following editorial appeared in the February 3, 2006 issue of Lutte Ouvrière (Workers' Struggle), the paper of the French revolutionary group of that name. While this is about the situation of steel workers in France, we could have written the same about this country. And we did add a paragraph about the U.S. steel industry.
Steel workers have every reason to be worried about the plans of Mittal Steel, the biggest steel company in the world, to buy up Arcelor, the second biggest.
Steel workers and their families remember all those other mergers and buyouts. Under the pretext of "modernizing" to meet international competition, steel companies closed mills, engineering mass layoffs, which ruined entire regions. Between 1970 and 1990, the right-wing and then the left-wing parties, when in power, spent 18 billion dollars to subsidize the steel industry. That meant 18 billion less for hospitals, retirement homes and national education. Steel company stockholders pocketed all that money while getting rid of three fourths of the industry's workers.
The company Usinor emerged from these transactions, at the cost of tens of thousands of lost jobs and billions spent. Usinor in turn merged with a Luxembourg company and then a Spanish corporation to produce Arcelor.
Arcelor just bought up a Canadian steel company. But just as the shark was swallowing a big fish, it was threatened in turn by a still bigger shark! Mittal Steel offered 22 billion dollars to buy Arcelor. If this merger goes through, it will do nothing to increase the capacity to produce iron and steel. Mittal is simply purchasing a company that already exists, with all its factories, raw materials and workers. And, in fact, this kind of merger always leads to plant closings and job losses.
The same thing went on in the United States. New York investment banker Wilbur Ross bought up LTV Steel and then Acme Metals. Next he bought Bethlehem Steel, formerly the second biggest steel company in the country, and finally Weirton Steel. The workers of these companies suffered mass layoffs, pay cuts, big reductions in pensions and the end of retiree health insurance. Then Ross turned and sold all these steel operations to Mittal Steel for a 300 million-dollar personal gain for himself.
What's happening in the steel industry illustrates what is happening in the entire world economy. The large corporations have gigantic sums of money thanks to their higher profits. But they have so little confidence in their own economy that they refuse to invest in more production, which would result in new factories and additional jobs.
Instead, they drive their own workforce to produce more, then use their increased profits to buy each other up. This allows big stockholders to get fantastically wealthy. The boss of Mittal Steel has become the third richest man in the world. His personal fortune exceeds the combined annual production of two African countries like Senegal and Mali. For his daughter's wedding, he rented the palace of Versailles and two other sumptuous French palaces for the small sum of 60 million dollars!
We don't know if this new "merger-acquisition," as the bosses put it, will succeed. While waiting, the stock price of Arcelor rose by 28% in one day, increasing the fortunes of its main stockholders by 28%.
But this is what we do see: Big companies with giant profits lower wages and worsen working conditions. They lay off and reduce the number of workers, producing more with fewer workers. They impose flexibility and replace secure employment with temporary and insecure jobs. The French government's new law allowing bosses to get rid of young workers whenever they want is only the latest of the many services the government has rendered the big bosses, and the latest infamy toward working people.
This is how their economy and society function. Millions of workers are condemned to use themselves up at work if they have a job or to die in poverty if they don't. All this so the big corporations can play a giant "Monopoly" game. But their Monopoly is played on the backs of workers and the results of this game are catastrophic for the entire society.