Welcome to BASE21

By Milt Neidenberg

The ailing steel industry, inundated with 31 bankruptcies in recent years, received a shot in the arm from President George W. Bush on March 5. He issued sweeping tariffs and quotas to protect steel bosses from their global competitors. Owners of integrated steel plants that convert iron ore into finished steel are the beneficiaries of a protectionist policy that has far-reaching economic and political consequences.

It is too early to determine the extent of the protectionist fallout. But it is clear that although the names of the "good old boy" Morgan-Rockefeller steel network of a century ago may have changed, its conservative, rightwing corporate mentality is still alive.

Bush imposed a stiff three-year, 30-percent tariff on the main products of integrated steel plants. Other products, such as stainless steel, face tariffs of 8 percent to 15 percent. The immediate result is a dramatic increase in the price of steel.

Catering to this sector, President Bush has provoked a trade war with the same capitalist allies he has been courting for his expanding war against Afghanistan and other regions. The European Union and its steel monopolies are furious.

They now export more than 6 million tons of finished steel products to the U.S. The projected trade barriers could cost the integrated steel corporations more than $2 billion annually. Steel monopolies like Thyssen/Krupp of Germany, the Anglo-Dutch Corus Group, South Korea's Pohang Iron & Steel, and others took heavy hits in the stock market.

Japan, South Korea, Russia, Brazil and others seriously affected are angry. They are assessing retaliatory options. Even British Prime Minister Tony Blair, Bush's willing junior partner in the war drive, characterized the move as "unacceptable and wrong."

A key question therefore is: Will the U.S. war allies, particularly the European Union, raise tensions by applying sanctions--such as closing off tax benefits given to U.S. companies or retaliating against U.S. products? The 15-nation union has already announced it will file a two-part complaint with the World Trade Organization.

Competition will intensify

Capitalist overproduction has created a glut in the global market. Brutal competition will intensify among the giant steel producers as they fight for hegemony of markets and profits. Even U.S. non-union mini-steel mills, like Nucor, that compete with the integrated steel plants have joined the fray. They can enjoy the protection of high tariffs and cheaper labor costs, while not being responsible for worker pensions and health costs that are a burden to Big Steel.

To add to this crisis, the tariffs raised tensions between the integrated steel plants and domestic users who fabricate the steel for consumption. The costs of the latter will rise dramatically as tariffs kick in. These steel users may move their operations abroad to avoid the increases, eliminating many thousands of jobs, or pass their costs in price increases on to workers and consumers--or both.

They constitute a broad array of powerful forces that include the Big Three auto giants, their suppliers, construction companies, and manufacturers of a multitude of consumer products and household necessities, like refrigerators and stoves.

Even steel-producing countries like Brazil that are now shut out of the U.S. market have threatened to retaliate. This has special significance in regard to the Free Trade Area of the Americas, where the U.S. wants to increasingly squeeze Latin America and the Caribbean in its economic clutches. Bush's imperialist "free trade" policies may have hit a bump in the road.

So what was in it for the Bush administration that Bush would weigh in on the side of the protectionist wing of his base? Is his popularity finally waning as the World Trade Center disaster recedes? Is he worried about domestic support for his decision to widen the war? Is he concerned about the November 2002 mid-term elections and therefore wooing the steelworkers' union, the USWA, which supported him unconditionally in the tariff campaign?

The union joined the campaign of Bush and the steel tycoons to raise protectionist tariffs. The USWA mobilized thousands of its members, held marches and rallies, lobbied politicians and communities, all in the hope that Bush and the steel bosses would support its effort to save jobs and finance the benefits currently in danger.

However, Bush has rejected any bailout for retirees who gave a lifetime of sweat and blood toiling in the smokestack industries. Now the steelworkers will be hung out to dry by a Congress--Democrats and Republicans--who will put the retirees' issue on a back burner. The Democratic Party joined the protectionist chorus.

The AFL-CIO leadership is facing a critical moment. The expanding war, military budget and "anti-terrorist" campaign are eating up wealth and resources desperately needed by steelworkers and labor in general. And the recession has continued to take its toll on the masses of working people.

Millions are unemployed, particularly in the industrial sector. Millions more are without decent health care. Hunger and homelessness are rising.

It's time for the AFL-CIO to review the full significance of the Bush administration's protectionist tariff hike. The steel industry is in deep crisis. Only a few will survive.

The day after the higher tariffs were imposed, National Steel--the fifth-largest steel corporation, Japanese-owned but located in Indiana--declared bankruptcy. This threatens the jobs of 7,500 steelworkers. Bethlehem Steel, the second-largest steel corporation, is now in bankruptcy. LTV, a Midwest giant, has been sold off to a corporate speculator.

Other bargain hunters will exploit the workforce mercilessly or sell off the physical assets of the plants. The greedy steel barons driven by the profit motive are bloodsuckers on a potentially healthy industry capable of producing more than 100 million tons of steel annually.

A spark of struggle could turn it around

Steel workers and their allies need a plan to revive the industry--a strategy to take over their plants. USWA President Leo Gerard wouldn't initiate it, but union leaders would have to support it.

The rank and file have made the maximum sacrifices to keep the plants running. So much of their labor is invested in the plants that they have the right to legally declare that they are the principal creditors, particularly in the bankrupt plants. They have the skills and the know-how to make the plants run.

Occupying the plants could save their jobs, their pensions and health benefits.

There is a desperate need for steel products, particularly in war-torn, impoverished countries, as well as here in this country. The potential for international solidarity will rise as steelworkers abroad face a similar crisis from exploiting steel magnates.

A spark of struggle, such as taking over a steel plant, even one in bankruptcy or on "hot idle"--a closed plant with its furnaces still lit--would be timely and could energize this development.