Restructuring capitalist industry:
The example of the
Belgian steel industry at the 'old industries' in capitalist Europe and the USA, whose share of the world market has been falling continuously. (See table). While world production fell by 9.8% in 1975, in comparison with the previous year, it fell by 14.5% in the USA and 12.4% in the EEC countries. In 1982 the EEC produced only 110 million tonnes of steel while its productive capac-
In 1981, the European Community Iron and Coal Commission set a definite target for restructuring the European steel industry. duce productive capacity for hot rolled steel by 30 million tonnes by the end of December 1985. By this time all public subsidies to the steel industry must end, or the country concerned, if it is a member of the EEC, will be taken before the European Court of Justice.
There have already been important consequences of this policy. The reduction in the workforce, already considerable during the last two years,
EEC estimates are that 90,000 to 100,000 jobs will be lost in the two years to come; 20,000 to 25,000 in France, 9,000 to 10,000 in Belgium, around 25,000 in Italy and a similar number in West Germany, 4,500 in Luxembourg, 2,000 in the Netherlands, and the remainder in Britain, where plans have not yet been made. (1)
For almost ten years the reshaping of the Belgian steel industry -particularly of the Cockerill Sambre steel works in the Walloon (Frenchspeaking) country - has been a recurring nightmare. A nightmare for the steelworkers who see their jobs melting away like snow in the sun. A nightmare for the workers of the industrial basin of the Walloon country where the steel industry constitutes the veritable economic backbone. And also a nightmare for successive governments.
As the state took control to allow various private companies to disengage from the industry, it has had to take responsibility for a socially economically and politically explosive affair that has been at the heart of most of the political crises of the last few years.
1984 and 1985 will be decisive years for the restructuring of Cockerill Sambre and the Belgian steel industry. The government has undertaken to apply the directives of the European Commission, requiring that aid to the steel industry from public funds be ended by 1985. To satisfy these demands, a draconian plan was introduced. government, a coalition of the Liberals and Social Christians, seemed to have won a major victory over a powerful sector of the working class.
the workers movement engaged in the battle over the reshaping of the industry at a time when the overall relationship of forces was favourable to it. Weighing in its favour were a strongly concentrated working class, a tradition of struggle going back to the resistance against the Nazi occupation, a very high rate of union organisation in the sector, spontaneous sympathy from the Walloon people, and a quite restricted room for manoeuvre for the bourgeoisie. But all these assets were wasted by the reformist leaderships, who showed themselves to be totally incapable of confronting the bourgeoisie's drive to dismantle the steel in-
At the end of March, the government introduced a new three-year plan to make the workers pay for the crisis. wages and social security benefits will drop by 2%, and the total wage bill in the public sector by 3.5%. These measures aim to reduce the budget deficit from 550,000 million Belgian francs to 250,000 million Belgian francs, an 'economy' of more than 5,250 million dollars. a big reaction in the union movement, and created a favourable climate for stepping up the steelworkers struggle. The outcome of this fight is not yet finally decided.
The world steel crisis began in 1974. For the first quarter of 1975 orders for steel products were 33% down on the corresponding figure for the previous year. Prices dropped by 40 to 50 per cent between November 1974 and March 1975, and then by 2% per year in real value between 1975 and 1981. 1982 was a parInternational Viewpoint 21 May 1984
This was: to reThe Martens-Gol-De Clerg Over the three years to come, This provoked ticularly black year: in Europe and the working at half their capacity.
The crisis took steel producers completely unprepared. In 1974 they were still banking on an increase in world production of 1,000 million tonnes before the year 2000. Expensive investments everywhere have had to be abandoned, factories have been closed. Competition ity remained 200 million tonnes. To be profitable it should produce 170 million tonnes. One has to go back twenty years, to 1963, to find such a low production
At the same time, the Japanese steel industry is using two thirds of its productive capacity. Hit by full effects of crisis
The crisis in the Belgian steel industry should be looked at in this context. The steel plants at Liege and Charleroi in the Walloon country (joined in 1978 to form the Cockerill Sambre group) have suffered the full impact of the world economic
This is partly because the Belgian steel industry produces, to a large extent, for export, but above all because the financial groups that control the industry have for years operated on a short-term view, based on the race to produce more. Between 1950 and 1974 steel production in Belgium increased fourfold, rising from 3.8 to 16.2 millions of tonnes per year. More than 37,000 million Belgian franes (650 million dollars) were invested between 1967 and 1971.
But the structure of production remained almost unchanged, with a large proportion of ordinary products (steel rods, girders and wire). Investment was concentrated in equipment designed to increase production quantitatively rather than qualitatively. This industrial concentration was matched by a concentration of power in several holding compan-
Generale de Belgique, Bruxelles Lambert and Cobepa-Frere-
(linked to policy of disproportionate investment led to the firms accumulating colossal debts. When the crisis hit, the Walloon steel industry thus found itself in a particularly
The policy since 1975 of the holding companies that controlled the steel industry can be summarised in three points:
- firstly, 'nationalising' industry's losses, to recover the capital insecondly, to continue to squeeze indirect profits out of the steel industry;
and thirdly, to charge the state with carrying out thoroughgoing ration-
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BELGIUM
(2) PUDC: Principal underdeveloped countries (Brazil, India, South Africa, South Korea, Mexico, alisation to prepare for the eventual purchase of the profitable sectors by private
The first two objectives were largely reached. In 1978, under a government including the Social Democrats, the state bought part of the stock, and transformed the firms' debts into public shares to the major shareholder with 81.4% of the shares. Democratic ministers collaborated in a rather unsavoury incident in which the state bought shares in the steel group at two or even four times their quoted
Finally, the state guaranteed all the banks and took responsibility for the interest payments. state of affairs that made it possible for the director of the Societe Generale in 1980 to say arrogantly: 'From now on the finance groups will refuse to invest a single frane at risk in steel.?
The losses thus nationalised, the holding companies continued to wring money out of the steel industry by every possible means. Thus, they have lent to Cockerill Sambre - with a state guarantee even for a short-term loan - the money it needed to reorganise. Fantastic profits have been made - the interest rate was 15 to 20 per cent, 7,000 million Belgian (125 million dollars) for 1982 alone.
What is more, the same companies control the ore-extraction, iron energy sectors as well as, until the end of 1983, part of the marketing of these products, on which they systematically took 2 to 2.5 per cent commission. Workers pay the bill
As for the third of the finance companies objectives, it is clear that they have almost reached it when one sees that:
Between 1978 and 1982 productive capacity fell from 12 to 8 million tonnes, and an unbelievable quantity of production equipment has been aban-
The two steel basins of Liege and Charleroi lost 18,600 jobs in all - almost average job loss in the EEC steel industry was one in three, an illustration of the faster pace of restructuring in Belgium.
Productivity rose by 50% between 1975 and 1980, essentially because of speedup. A direct consequence of this is that in 1978 industrial accidents were three times more frequent than the national average and two-and-a-half times would be incapable of implementing a plan of sufficient brutality, given the relationship of forces between the classes, overall favourable to the working class, and the centrality of the steel question.
This second phase has been put into operation by the Martens-Gol government since it was formed at the end of 1981. Helping in the task have been the EEC and the French 'consultant' Jean Gandois, former managing director of Luxembourg to give his advice on the restructuring process. The new plan contains the following elements:
- Closing down four production lines at Cockerill Sambre. This time it is not a question of doing away with more or less worn-out machinery. Some 97 per cent of the production machinery at Cockerill Sambre that escaped the first phase of reorganisation had been classified as 'Category 1' by the consultant few years previously. Among other things the best blast furnace in the group, the best steel works in the group, another steel works dating from 1972, and a wire rod plant, Valfil, described as the best in Europe, were to be
The loss of 8,900 jobs, shared' between the two concentrations in Liege and Charleroi. According to Gandois, the promoter of this scheme, and the Belgian government, a careful dose of early retirement, weeding out the 'bad elements' and waiting lists for retraining schemes should make it possible to avoid mass redundancies.
Stabilisation of the company and recovery of its capital through the state taking responsibility for its liabilities. The total cost of this operation is 95,000 million Belgian francs (1,687 million dollars), 78,000 million (9,750 million dollars) of which had to be paid in 1983. The Gandois plan does not ask for a penny from the banks and holding companies that in 1978 promised 10,000 million Belgian franes for the reconversion plan.
- A 10% reduction in the wage bill by direct wage cuts for the workers.
- Last point: cooperation agreements with other iron and steel groups. There are three companies involved in this collaboration: Sidmar (an integrated steel works in Flanders near Ghent),
Cockerill Sambre and the Luxembourg group Arbed. Each of these companies will have a special role in the new division of labour. (3) They have one thing in the major private shareholder is the Societe Generale. Thus the cooperation project is only to prepare to give back the most profitable sectors of Cock erill Sambre to the private sector as dis mantling continues and there is a sti tighter concentration of capital.
The steelworkers easily recognised the government. Even before Jean Gandois worked out his plan, government state ments had emphasised the necessity of cutting Cockerill Sambre's productive capacity by half. The workers responded to this threat with a seven-week strike at the beginning of 1982, marked by very determined street demonstrations. ularly notable was that of March 13, 1982 when several thousand steelworkers confronted the police in the Brussels streets for several hours. Two opportunities lost
But the traditional leaderships of the working class were unable to organise the struggle and map out the way forward. The seven-week strike ended without
The traditional leaderships had an even greater responsibility given that many other sections of the working class were on strike at the same time to defend the price-indexing of wages. (4) So a united fight around a clear objective was possible: faction of the immediate demands of the workers and the resignation of the gov-
A second, similar opportunity occur red in September 1983 when 800,000 2. We generally distinguish between flat products (sheet iron, sheet steel produced by continuous mills in wide bands, and long or sec tional products, of the type of girders or steel rods for reinforced concrete, produced by section mills. Wire rod, which can then be cut into nails, nuts and bolts, etc., is another long product. 3. The reorganisation of the Belgian-Luxembourg steel industry in time will mean the specialisation of the Arbed group in long products, and Cockerill Sambre in flat products. 4. On the struggles of the Belgian workers at the beginning of 1982 see International Viewpoint, No 4, April 12, 1982.
Evolution of Share in World Production (in %)
more serious.
The of the Cockerill wages
Non-EEC Europe
Sambre workers were frozen between
1976 and 1982.
Nonetheless, the restructuring of the group did not go far enough for the fi-
It was still recording
Country or Group EEC USA
Japan
20.5
15.7
5.5
1970
23.2
1980
17.9
14.5
15.6
6.4
Dif-
NCP (1)
PUDC (2)
Miscellaneous
3.6
1.9
29.6
7.8
35.2
2.6 nance companies.
big losses — about 1,000 million Belgian francs
(6 million dollars)
per month.
(1) NCP: Non-capitalist countries (Eastern Europe, China, Cuba, etc.)
A second stage of the dismantling policy
But a class then became indispensable.
collaborationist government including the and Walloon Socialist Parties
Flemish
-6.0 -0.1
+0.9 ference -5.3
Taiwan, Venezuela).
+0.7
+5.6
+4.2
International Viewpoint 21 May 1984
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public service workers went on strike for two weeks against the government's austerity plans. (5) This strike came straight after a series of demonstrations and work stoppages organised by the iron and steel sector after the announcement of the Gandois plan in June that year. During these demonstrations the leader of the Walloon section of the Federation Generale des Travailleurs de la Belgique (FGTB), which organises all the union federations led by the Socialist Party in the Walloon country, promised a 'hot autumn'. he did not lift a finger to make sure that the iron and steel workers supported the public service workers.
The Martens-Gol government manoeuvred very cleverly to get the union federations to accept, or at least resign themselves to, the plan for restructuring the steel industry. The government continually brandished the threat of outright bankruptey of Cockerill Sambre. It also launched a campaign, particularly in Flanders, to denigrate the steelworkers as 'the privileged with excessive wages, whose workplaces were draining the public coffers and 'preventing the allocation of funds necessary to create new jobs' It then invoked the requirements of the European Commission.
And finally the government succeeded in setting the workers of the two big steel concentrations, or of different workplaces, against each other. It particularly used the argument that the restructuring plan did not mean mass redundancies but simply 'shedding the surplus' through natural wastage, etc. The leadership of the Catholic union federation, the CSC, was the first to capitulate to this offen-
The leaders of this union turned into open defenders of the laws of the capitalist market. They took as their slogan We can only produce what we can sell' and refused to participate in the protest movement against the Gan-
The regional leadership of the Socialist-led FGTB in Charleroi joined the CSC in its 'realism'. Its main leader explained to the bourgeois newspaper La Libre Belgique that the iron and steel industry is at the end of the cycle. FGTB leadership maintained a correct attitude in words, rejecting the Gandois plan, the closures and the job losses, and demanding the four steel works be kept. But it refused to take any concrete actions. Union bureaucracies chauvinist poison
The practical test was the 12-week strike and occupation of the Valfil wire rod plant from November 1983 to March 1984. As Valfil is a unit at the end of the production cycle its closure condemned all the other installations before it in the process. The Liege FTB leadership was, nonetheless, content to make Valfil a 'symbol', refusing to make it a starting point for organising the workers. The 500 workers there thus suffered a defeat. International Viewpoint 21 May 1984
Under the battering ram of the offensive by the government, the 'consultant' Gandois and the EEC, the workers leaderships went a long way down the path of 'realism'. This brought about a terrible division between the union organisations and workers of different regions, each trying to get their neighbours to carry the burden of the reorganisation.
A specific element in the division among Belgian workers is that between the French-speaking Walloons and the
This was demonstrated in the steel industry. All the Flemish political parties continually demanded the immediate implementation of the restructuring plan so that 'not another Flemish penny would be thrown into the Walloon bottomless pit of Cockerill Sambre'. state of affairs to create the impression that bankruptcy was a very real threat accompany any political crisis. There was no lack of arguments to reply to this and win the Flemish workers to solidarity with the Walloon steelworkers. It would have been enough, for example, to point out that Cockerill Sambre used 53% of the coal produced at Campine, another enterprise in difficulty being subsidised by the state, which employs 10,400 Flemish miners. bureaucratic leaderships, led by the Socialist Party, did not choose this approach.
Rather than class solidarity leaderships preferred to seek laborationist fronts including, at local level, employers associations and parties of the governmental coalition, the Social Christian Party and the Reforming Liberal Party, mobilised for the 'defence of the region'.
Over the years Belgian steelworkers have proved very combative. But, up till now, their vanguard has been incapable of understanding the profound nature of reformist politics faced with the plan to restructure the steel industry, the bourgeois government and the EEC Commission. The failure of the Valfil strike appeared as proof positive of the impasse for this type of very combative but unpolitical syndicalism, incapable of presenting an anticapitalist line as an alternative to that of the bureaucratic leaderships. A race against time
In these conditions the orientation of the POS/SAP (Socialist Workers Party, Belgian section of the Fourth International) (6) is focused around the following three axes:
- support for and popularisation of the immediate demands of the workers class interests: no to the closures; no to redundancies and job loss while there is no effective reconversion and creation of other jobs; no to cuts in wages because the banks should pay the cost of their restructuring plans; a cut in work time without loss of pay, etc.
There has to be a fight for a workers united front on this basis with all the unions and political parties that claim to be part of the working class. A particular aspect of this fight has to be against chauvinist campaigns. In the Belgian case, where the reorganisation of the iron and steel industry is directly taken in hand by a bourgeois government imposing austerity on the workers, the workers united front on the basis of the workers immediate demands points directly to a political objective that is a precondition satisfaction of any demand: bringing down the Martens-Gol-De Clercq alternative to the restructuring plan has to be explained. This particularly has to include demystifying the role of the banks and finance companies and demanding the nationalisation of Cockerill Sambre and all its affiliates without compensation, and cancelling of all debts to the finance companies. This is a demand that expresses a different economic logic and thus one which could only be met by a workers government breaking with the EEC.
The POS/SAP has done vigorous propaganda work around this alternative and in solidarity with the steel struggles in the last period. This campaign has brought it the sympathy of many vanguard union activists Anticapitalist ideas are gaining ground, but it is a race against time.
At the present rate there is no doubt that the bourgeoisie will succeed in pushing through the reorganisation plan that is still far from being completed today. But the violence of the attacks it has to make to compensate for its tardiness in imposing austerity policies will force the workers and their union organisations to choose between the prospect of anticapitalist struggle and the prospect of being simply crushed by the bourgeoisie. 5. See International Viewpoint, No 39, October 31, 1983.
On the last congress of the POS/SAP see International Viewpoint, No 50, April 9, 1984.
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18,000 jobs in the standard-grade steel industry.
Metall, the union that includes the steel workers, as well as many other groups of industrial workers, protested.