Workers Vanguard No. 976

18 March 2011


Steelworkers in Bitter Struggle Over Pensions


The following article is reprinted from Spartacist Canada No. 168 (Spring 2011), newspaper of the Trotskyist League/Ligue Trotskyste, Canadian section of the International Communist League.

On January 29, 10,000 unionized workers marched through downtown Hamilton in defense of the 900 members of United Steelworkers (USW) Local 1005 locked out by U.S. Steel since November 7. This was one of the largest labour protests in Ontario since the Days of Action of the mid to late 1990s—the one-day local general strikes against the then Tory provincial government. Busloads of workers poured into Hamilton from around Ontario, while others came from Quebec and the U.S. in a show of solidarity against U.S. Steel’s drive to gut pensions.

The company is demanding the de-indexing of the already meagre pensions of 9,000 retirees, leaving them to be chewed up by inflation. It wants new hires barred from the existing pension plan and forced into a “defined contribution” plan. Such a divisive two-tier system would put the pensions of younger workers completely at the mercy of the capitalist stock market. Even before the lockout, the steel bosses stopped indexing pensions and shut down the blast furnace in Hamilton, stopping steel production altogether. There is speculation that the plant will not reopen.

In 2007 U.S. Steel bought Stelco’s Hamilton and Nanticoke, Ontario plants and quickly shredded its toothless “guarantees” to maintain the workforce—then at 3,105 workers—and production levels for the next three years. Sweeping layoffs and long plant shutdowns saw the shrunken workforce further decline. In August 2009, U.S. Steel locked out USW Local 8782 at the Nanticoke plant. After eight long months out of work, the local swallowed the company’s demand to bar new hires from the pension plan. Having won there, U.S. Steel turned its guns on Local 1005.

This is a crucial battle for all labour, and a win for the workers of Local 1005 could help reverse the bosses’ unremitting attacks. For many decades, Hamilton-area steelworkers, along with miners in Sudbury and auto workers in Oshawa and Windsor, were the bastions of the Ontario labour movement. To the extent that unionized workers have pension plans, medical benefits and health and safety protection it is in large part thanks to the hard-fought struggles of steelworkers, miners and auto workers to forge strong international industrial unions in the 1930s and 1940s.

But for years the bosses have been waging a one-sided class war against workers, as the pro-capitalist labour misleaders negotiate one giveback after another, leading to the withering of the unions and impoverishment of the working class. Loyal to the right-wing social democrats of the NDP [New Democratic Party], or even to the capitalist Liberal Party, these labour bureaucrats will not lead the kind of struggle that is needed. Sharing with their capitalist masters a belief in the inviolability of the profit system and pushing a program of Canadian nationalism, the union leaders strangle the enormous potential social power of the proletariat. The difficult task of building a class-struggle leadership in the unions to carry out the vitally necessary battles against the capitalist class is long overdue.

Capitalist Profit and Accumulating Misery

“Most of us left parts of our bodies in Stelco when we left. I don’t have any use of my left hand, I have two artificial hips,” said a retired Local 1005 millwright at the January 29 protest. For the thousands of Local 1005 pensioners making less than $1,000 per month, about three-quarters of whom are widows, de-indexing pensions will be catastrophic. Many already survive thanks only to food banks and second-hand stores.

Capitalist exploitation uses up and destroys workers. To survive, workers must sell to the capitalist their ability to work. It is from the surplus value created by their blood and sweat that the billions in profits flow into the pockets of the bosses. When workers are injured or too infirm or too old and can no longer sell their labour power, they are discarded. U.S. Steel follows this inexorable logic in its attack on the pensions of those who toiled in Hamilton’s steel mills for 30 or 40 years.

In Canada as in the U.S. and Europe, governments and private capitalists alike are attacking pensions as a way to boost profits. In line with this, the federal Conservatives have just announced a private “pension” scheme that will benefit not the eleven million Canadians who have no pension plans, but the profit-bloated banks. The capitalists’ campaign against the supposed “gold-plated” benefits of unionized workers is meant to prepare the ground for further attacks while fomenting anti-union sentiment.

If the harshest blows have so far fallen on workers in the private sector, the bosses are now jacking up the attacks on unionized public sector workers. Canada Post seeks to destroy both the pension and sick plans of postal workers. In Toronto, right-wing mayor Rob Ford has launched an offensive against transit workers and is making a union-busting bid to contract out garbage pickup.

The capitalists’ answer to the most severe economic downturn since the Great Depression of the 1930s is that “all must sacrifice.” And “all,” for the ruling class, means the working class. In his great work Capital Karl Marx wrote: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its own product in the form of capital.” The truth of this statement can be seen in the destruction of livelihoods, lost homes, destroyed families, gutted social services, impoverished retirement and more. As for the much-vaunted “recovery,” the capitalists admit that it has been “jobless.” The only thing recovering is their profits.

The fight for jobs, pensions and other desperately needed benefits is the fight against the devastation of the working people. It is necessary to demand an end to layoffs by shortening the workweek at no loss in pay, as part of the struggle for jobs for all. Unemployment benefits must be greatly increased and extended to everyone who cannot find a job, and all pensions must be completely guaranteed by the government. A massive program of public works at union wages is needed to rebuild roads and bridges, fix the decaying health system and schools and expand public transit.

But such basic and obviously necessary demands, the elements of which were laid out in the 1938 Transitional Program, the founding document of the Trotskyist Fourth International, will not be granted by the rapacious capitalist rulers. The capitalist state, including the cops, courts and army, exists to defend the rule and profits of the bourgeoisie. It cannot be reformed or wielded to serve the interests of working people. The catastrophe of joblessness, threatening the disintegration of the working class, can be effectively fought only by a workers movement led by those committed to the struggle for socialist revolution and the creation of a rationally planned, socialist economy on an international scale.

Protectionism: Joining with the Enemy Class

The Hamilton steelworkers’ struggle closely mirrors the bitter year-long 2009-10 strike by more than 3,000 nickel miners at Vale Inco in Sudbury. There too, the company sought massive concessions, including gutting the pension plan. The workers of USW Local 6500 fought with all their might, but the union leadership—like the leaders of Local 1005 in Hamilton today—offered Canadian nationalism as the answer to the bosses’ attacks. In the end, the Vale Inco workers voted up a contract that bars new-hires from the defined benefit pension plan.

The Sudbury USW tops held up the former Canadian-owned Inco as a positive alternative to the Brazilian-owned Vale, which took over the company in 2006. But it was Inco that slashed tens of thousands of mining jobs, and every gain Canadian nickel miners won came through struggle against these mining magnates. Canadian mining corporations were and are notorious for their rapacious brutality in countries like Ecuador, the Philippines and the Congo. As for attacks on pensions, look at Nortel, the Canadian telecommunications giant, which cried bankruptcy and then, backed by the courts and government, destroyed the pensions of more than 17,000 former employees.

In 1980, there were more than 25,000 workers at Stelco facilities; it was this Canadian company that ravaged the workforce, reducing it by more than 20,000 before U.S. Steel took over. After a frenzy of international buyouts in 2006-07, the steel industry in Canada is now almost entirely owned by international conglomerates from Europe, India, Brazil, the U.S. and elsewhere. Regardless of who owns the steel plants, the capitalist exploiters will attack the working class in their drive for greater profits.

Today, reflecting the declining economic and industrial power of U.S. imperialism, U.S. Steel, while still the largest American steel company, ranks only tenth in world production. The layoffs in Hamilton, the shifts in production to the U.S., attacks on pensions: all are aimed at improving their position against their European, Asian and other competitors. The increasing centralization of the steel industry, with various international conglomerates jockeying for control, cries out not for a protectionist campaign for a “Canadian steel industry”—i.e., for home-grown exploiters—but for international class struggle. Above all, it points to the need for an internationally planned socialist economy under the rule of the working class.

Far from this perspective, the leadership of USW Local 1005 calls to “rebuild Stelco,” and denounces U.S. Steel as “unwilling to be a participant in Canadian nation-building.” The lead banner on the January 29 march proclaimed “Canadians Stand as One!” The Local 1005 tops even uphold Stelco as a “national treasure!” If these slogans have a somewhat quirky Mao-oid quality, that is not accidental, for the president of the local, Rolf Gerstenberger, is also a prominent supporter of the Communist Party of Canada (Marxist-Leninist).

But there is not a trace of communism here, only the purest nationalist bombast, and it coexists perfectly with the politics of the mainstream bureaucrats in the Ontario Federation of Labour and other major unions. In an article in the Hamilton Spectator (9 December), Canadian Auto Workers leader Ken Lewenza mourned the loss of “corporate icons” and “key productive jewels” like Stelco. It was Lewenza, two years ago, who agreed to unprecedented wage and benefit cuts of $19 an hour at Chrysler and $22 an hour at General Motors, setting the stage for the latest round of broader anti-worker attacks.

Gerstenberger and the Local 1005 leadership have repeatedly called on the Canadian government to nationalize U.S. Steel. To hear Gerstenberger talk about “the arrogance and contempt the global monopolies hold for Canadian workers, our socialised economy and sovereignty” (Workers’ Forum, February 2011), you’d think capitalist Canada was some kind of socialist paradise.

The pro-NDP “socialist” groups that populate the Canadian left apologize for, or openly propound, the same nationalist protectionism. The Maple Leaf patriots of the Communist Party of Canada (CP) claim that the current struggle is “about having a domestic industry to produce steel for Canadian manufacturing…or Canadian sovereignty and independence by another name” (People’s Voice, 1-14 February). The International Socialists mouth a few words against Canadian nationalism, but two years ago this group declared: “We must demand that the government keep steel production local” (Socialist Worker, 16 March 2009). While the CP calls to “Nationalize US Steel operations in Hamilton,” the I.S. pleads for the “nationalization and retooling of factories.”

Capitalist nationalization schemes have long been used by capitalist governments to pay off failing bosses and blunt working-class discontent. The 2009 bailouts of GM and Chrysler—which amounted to partial nationalizations—came directly at the workers’ expense, and thanks to them the companies are again raking in the profits.

The union misleaders sell workers the lie that a Canadian boss is better than an American (or Japanese or German), that protectionist tariffs and nationalization schemes will protect jobs, stop plant closures and maintain wages and benefits. But protectionism means joining with the enemy class to shore up their profits, profits extracted from the labour of working people be they in Canada, the U.S. or elsewhere. Moreover, nationalizing the least efficient capitalist operations is in a sense the exact opposite of socialist expropriation. Socialist economic planning under the rule of the working class is based precisely on appropriating from the capitalists the most advanced means of production. As Trotsky explained in the Transitional Program, the Marxist program of expropriating the capitalist bloodsuckers is counterposed to “the muddle-headed reformist slogan of ‘nationalization’” and must be linked to the struggle for working-class power.

The entire history of the steel industry in Hamilton, going back more than a century, explodes the view that Canadian bosses are “nice guy” friends of the working people. Hamilton was long known as Steel Town and over the years the city’s steel barons included William Southam, publisher of the Spectator, who built his newspaper empire on steel profits, and Hugh G. Hilton, the union-hating engineer memorialized in Stelco’s massive Hilton Works. For decades, tens of thousands of workers toiled in the brutally hot and dangerous steel mills for the profits of a tiny group of Canadian capitalists. Far from a “national treasure,” for almost 100 years Stelco brutalized its workers, denied them benefits, robbed them of their pay and fired workers, especially union militants and the foreign-born, at will.

It was the 1946 strike against Stelco that won union recognition and a 40-hour workweek. The strike was part of a broader postwar upsurge of class struggle. Proletarian solidarity as well as militant tactics were key to the union’s struggle. The company moved in an army of scabs to keep the mill going. But Stelco couldn’t move the steel through the picket lines. And even when the picket lines were breached and steel was loaded on to a freighter, dockers in Montreal wouldn’t touch the scab steel, so it sat on the Selkirk until the strike was over. The company failed to drive out the union, its fundamental goal, and the strike ended in victory.

Stelco wasn’t the only game in town, however. Side by side with the Hilton Works is Dofasco, originally Dominion Steel, founded in 1912. Dofasco was bought out by the European-based ArcelorMittal, the largest steelmaker in the world, in 2006, just before U.S. Steel bought out Stelco. The USW has several times tried, without success, to organize Dofasco, which remains non-union to this day. A win against U.S. Steel could mark a revival of the “spirit of 1946” and give a boost to the struggle to unionize this and other non-union plants.

Down With Anti-Communist China-Bashing!

Leo Gerard, the international president of USW based in Pittsburgh and formerly the union’s Canadian national director, works hand-in-glove with the steel companies in a campaign to “Buy American” (modified when he’s in Canada to “Buy North American”). Deeply chauvinist, “Buy American” has done nothing for American workers, as shown by the dead steel plants and massive unemployment running from Pittsburgh to Buffalo and Chicago. The American capitalists’ destruction of basic industry has especially devastated the black proletariat. Deindustrialization has also pitted Canadian workers against American, and workers from both countries against working people abroad.

The USW bureaucracy’s main target has been China, now the largest steel producer (and consumer) in the world. The union tops complain that Ottawa has failed to protect the Canadian steel industry from Chinese imports. This is a direct echo of the campaigns of the North American steel bosses. A recent study by a right-wing Toronto think tank, the Munk Centre, laments that Chinese steel production does not operate in a “competitive domestic market environment,” but has “very close relations to government agencies” (“The Importance of Steel Manufacturing to Canada,” May 2010). In its own way, this pays tribute to China, a bureaucratically deformed workers state with a collectivized economy that is not based on production for private profit.

Playing the bosses’ game against China is particularly deadly for workers. The Peoples Republic of China was forged through the defeat of imperialist-backed rule in the 1949 Revolution. Thanks to its collectivized economy, it has brought hundreds of millions of workers and peasants out of dire poverty into social production and a vast advance in living standards. With their nationalist agitation against China, the union bureaucrats are making an anti-Communist alliance with the Canadian and American capitalist rulers against the gains of the 1949 Revolution.

Albeit on different scales, both the industrial unions in North America and the workers state in China are the fruits of historic victories for the proletariat. One resulted from the massive struggles of the 1930s and 1940s, the other from the expropriation of capitalist class rule in the 1949 Revolution. Both must be defended unconditionally from attacks that seek to undo these gains, despite the fact that each is led by a bureaucratic layer that puts the gains in jeopardy. The bureaucratic misleaders of the unions here must be driven from their positions of leadership and replaced by a class-struggle leadership committed to the overthrow of the imperialist order through socialist revolution. The bureaucratic caste in China must be ousted by a proletarian political revolution to preserve and expand the working-class property forms established following the Chinese Revolution.

Workers Need Their Own Revolutionary Party!

The 1946 Stelco strike came as the anti-Soviet Cold War witchhunt of Communist Party supporters from the unions was heating up. During the 1940s and 1950s, the labour tops waged vicious anti-red purges, in which the USW bureaucracy played a central role, that saw many of the most militant workers driven out of the unions. Integral to this, the aspirations of struggling workers were channeled into the social-democratic Cooperative Commonwealth Federation, predecessor of the NDP.

While organizationally independent of the bourgeois parties, the NDP has a thoroughly pro-capitalist, nationalist program. When they are in power, from B.C. and Ontario in the 1990s to Manitoba today, they frontally attack the working class and the poor. Just over two years ago, the union tops were prominent supporters of the campaign for a Liberal-NDP coalition. More recently, the federal NDP has been assiduously propping up the minority government of the deeply anti-working-class and very right-wing Harper Conservatives.

To mobilize as one against the class enemy, it is imperative that the working class combat all manifestations of capitalist oppression—in defense of minorities, women’s rights, youth. The USW Local 1005 bureaucrats’ flag-waving declaration that “Canadians Stand as One!” is the antithesis of this perspective. Most perniciously, such slogans feed into the Anglo chauvinism wielded against the Québécois, whose national subjugation remains a major barrier to united working-class struggle. We advocate independence for Quebec in order to fight Anglo chauvinism and lay the basis for making clear to the workers of both English Canada and Quebec that their enemies are their own respective capitalists, not each other. “Canadian unity” nationalism, which is particularly promoted in the labour movement by the NDP, in turn drives Québécois workers into the arms of their own class enemies, represented by the bourgeois-nationalist Parti Québécois and Bloc Québécois.

The union movement must also stand unequivocally on the side of immigrants, who often bring traditions of militant struggle into labour’s increasingly multiracial ranks and are more and more under attack in this reactionary climate. A fight must be waged for full citizenship rights for all immigrants and against deportations. Such struggles can set the stage for the mobilization in common struggle of workers at home and abroad.

The fight to rebuild the unions as instruments of proletarian struggle is closely tied to the need for a multiracial, binational revolutionary workers party. That requires, above all, a political struggle against the social-democratic NDP and for a new class-struggle leadership of the unions. Against the tired and failed strategies pushed by liberals and fake socialists—from the Keynesian project of “benevolent” intervention by the capitalist state to the British Labour Party’s bourgeois nationalizations in the post-World War II period—we Marxists understand that no amount of tinkering with the existing system can wrench it into serving the needs of the proletariat and the oppressed. There is no answer to the boom-and-bust cycles of capitalism short of proletarian socialist revolution that takes power out of the hands of the irrational capitalist ruling class and replaces it with a planned, socialized economy. Only the achievement of a world socialist order can eliminate the age-old problem of poverty, scarcity and want. It is to this end that the Trotskyist League/Ligue trotskyste, Canadian section of the International Communist League, devotes all its resources.