Rolf Gerstenberger wants Canada’s steel prices brought under public control to stop the wild price swings he accuses companies of using to justify attacks on workers.In his latest flyer to locked-out members of United Steel Workers Local 1005, he argues for the same kind of supply management system Canada already has for wheat and milk.
“Canada must produce its own steel and Canadian wholesale steel prices must come under public control so that they at least equal their prices of production,” Gerstenberger writes. “Frankly, we are sick and tired of being the scapegoat for the failures of the industry and the current economic model.”
Since the first quarter of 2009 the average price of hot rolled steel has swung between a high of $900 a ton and a low of about $500. The average is currently in the $650 a ton range. Late last week several companies, including U.S. Steel, announced hikes of $60 a ton in the prices from which they start negotiating with customers, saying current prices don’t meet the industry’s costs of production.
As an alternative to letting the market set prices, Canada’s supply management system for milk licenses farms and uses a quota system to provide enough production to meet the market demand. The system prohibits any other production and limits import of milk into Canada in order to keep oversupply from forcing down prices. Prices are established based on cost of production data as well as economic indicators such as the consumer price index.
Gerstenberger argues companies use those wide price swings to demand workers give up benefits and wages. That’s what happened in 2002 and 2003 when Stelco tried to negotiate a 20 per cent cut in labour costs with Local 1005, again in 2004 when Stelco went into bankruptcy protection and since 2008 after a recession demolished demand for steel.
“Stelco cited low steel market prices in 2002 and the first half of 2003 as a major reason for the company’s crisis … as gross income from low prices was too little to meet the claims of owners of stock and debt,” Gerstenberger writes. “We refused to open our contract and instead pointed out that the company and steel sector need appropriate market prices that at least meet steel prices of production …”
The union argues wresting wage and benefit concessions from workers doesn’t solve industry crises and in fact creates broader social problems by widening the gap between classes.
“We say that prices should be under conscious human control based on the price of production and not subject to manipulation by the monopolies and the global market. We use the most precise conscious science inside the mill to make steel, why should the most precise conscious economic science not be used to guide the economy?” he wrote.
“Steelworkers do not wander about inside the mill hoping that an ‘invisible hand of the mill’ will somehow produce great steel. Why should we hope that an ‘invisible hand of the marketplace’ is somehow going to solve the economic crisis?”
The key, he concludes, is for Canada to reclaim control of its steel industry from the “foreign steel monopolies.”
“The foreign steel monopolies that dominate our steel industry … do not want independent sovereign markets and public political and legislative rule over the steel sector. They want the steel sector to serve their narrow company interests,” he wrote. “The steel sector is too important and basic to the overall economy to serve the narrow private interests of one group or another, especially foreign interests. Control over the steel sector has to come from the political and legislative jurisdiction in which it is based and serve public right not monopoly right.”
Local 1005 members have been locked out of the former Stelco plant since November in a dispute over pension concessions demanded by the company as a precondition for further negotiations. The company wants the current defined benefit pension plan closed to new members in favour of a defined contribution system. It was also wants an end to pension indexing for current retirees.
Compromises, such as a union offer to support the company in asking the provincial government to extend the time period over which U.S. Steel would be required to fully fund its pension plans, can’t even be discussed because the company has refused to negotiate.
“The arrogance of the U.S. executive managers is such that they think they can come into Canada and simply dictate terms of employment to Canadian workers most of whom have been employed at Stelco for decades and are even second and third generation steelworkers,” Gerstenberger wrote. “Investors and others who have an interest in U.S. Steel should question the direction of the executive managers and current Board of Directors with regard to wasting money on a fight at Stelco Hamilton that is poisoning relations and should not be happening.”
Origin
Source: the Spec
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