Local 1005 USW Starts Adopt-a-Worker Campaign to Support Locked-out Rio Tinto Workers

On February 18, a delegation of Local 1005 USW, representing the workers at U.S. Steel's plant in Hamilton, visited the locked out workers in Alma. During their visit they announced a worker-driven nation-wide campaign to raise $77,800 a month to support the locked out workers. Called the Adopt-a-Worker Campaign, its aim, Local 1005 USW President Rolf Gerstenberger said, was to give individual workers and their local unions in every province and sector of the economy the opportunity to raise their voice against what these multinationals are doing to extort concessions and impose unfettered monopoly right and the refusal of governments to hold them to account. The workers in Alma loudly applauded the initiative and expressed appreciation for the exchange of information with the representatives of Local 1005 USW who were themselves locked out for 11 months by U.S. Steel. "When we support you, we fight for ourselves. Your struggle is our struggle," Rolf said. The eight member delegation led by Gerstenberger also conveyed the greetings of the workers of National Steel Car in Hamilton, Local 7135 USW, who sent their local's flag and a financial contribution to show their support.

Local 9490 USW President Marc Maltais (left) and Local 1005 USW President Rolf Gerstenberger.

After a rally and day spent on the picket lines with the workers, the Alma workers made many comments supporting the idea that the financial assistance they are receiving from across the country is not charity but organizing to put monopolies such as Rio Tinto in their place. This is a trial of collective strength for the workers' opposition and this is the meaning of the solidarity that workers are expressing for one another, they said.

Press Release, February 16, 2012

Local 1005 USW is informing you about its Adopt-a-Worker Campaign in support of the 778 workers locked out by Rio Tinto Alcan in Alma, Quebec. The aim of the campaign is to raise $77,800 a month on the basis of a $100 contribution per Alma worker from local unions, individuals and organizations across the country.

Local 1005 USW calls on you to help make the campaign a success by contributing what you can and getting others to contribute. This mobilization will inform workers coast to coast to coast of what Rio Tinto Alcan is doing and the courageous struggle of the Alma workers to defend their rights. From Alma, Rio Tinto will move its offensive to plants it plans to close in Quebec and abroad, as well as to Kitimat, BC where the contract expires this July.

By letting the Alma workers know that their fight is our fight, this mobilization will contribute to defeating any attempt by Rio Tinto to isolate them and their just fight against the company's demand for unfettered subcontracting rights.

The offensive of these monopolies to do as they please in the name of remaining competitive on global markets concerns all Canadians and must be stopped. The president of the Alma workers' union local, Marc Maltais, Local 9490 Syndicat des Métallos, pointed out that the workers are forced to do the job of the federal and provincial governments to stop the monopolies from nation-wrecking. They plunder the resources, harm workers' interests and undermine the standard of living of their communities with only the workers and their families to hold them to account.

Local 1005 USW was locked out for 11 months and knows that besides the unity of the union, what is decisive is public backing. It is very important we win these battles to force the monopolies to negotiate in good faith. There are many workers under attack at this time, especially those without union protection. We oppose attempts to turn workers coast to coast to coast into a slave labour force.

Let's Make the Adopt-a-Worker Campaign a Success!
$77,800 a month and counting...

• Please make your cheques out to: Métallos Local 9490; write “Adopt-a-Worker” on the memo line
• Mail to: Marc Maltais, President, Syndicat des Métallos, Local 9490, 830 des Pins Ouest, Alma, QC, G8B 7R3
• To be added to the list of contributors: contact Local 1005 USW -- phone: 905-547-1417; e-mail: rolf.gerstenberger@uswa1005.ca; letter: Local 1005 USW, 350 Kenilworth Ave. N., Hamilton, ON, L8H 4T3

(Photos: STAA, Eric R. Pelletier, Les Wiatrowski, Patrick Vaillancourt)

Rio Tinto's Fourth Quarter and Full Year Financial Reports for 2011

Rio Tinto Unleashes Global Campaign to Drive Down Workers' Claims on Value They Produce and Costs Charged by Local Suppliers

- K.C. Adams -

The following material is meant to assist Rio Tinto workers in their struggle to defend their rights. All quoted material comes from Rio Tinto's fourth quarter and full year financial reports for 2011.

Rio Tinto executive management has unleashed a global campaign to drive down the claims of workers on the value they produce and the costs charged by local suppliers, which would effectively lower the standard of living in entire communities. Specific targets at this time are the aluminum workers in Quebec and BC, and iron ore workers in Australia. Rio Tinto has unjustly locked out workers at the Alma aluminum plant and threatens to do the same elsewhere in Quebec and BC, if workers do not concede to abandon collective defence of their rights and allow unlimited outsourcing of work and destruction of their trade union locals. Rio Tinto workers in Alma and elsewhere are courageously defending their rights and should receive unqualified financial and other support in their struggle.

In the capital-centred outlook of the Rio Tinto reports, workers are considered "costs" who must continually be hounded into accepting lower claims on the value they produce and insecurity during their working lives and in retirement. Attacks on the rights of workers and local suppliers are front and centre in Rio Tinto's reports. The word "cost" and its plural "costs" become synonymous with workers and suppliers.

"We are determined to tackle these cost issues and are accelerating a number of cost and productivity initiatives to control those costs we can influence.

"Rio Tinto Alcan remains committed to deliver the second phase of the transformation which is targeting a sustainable incremental EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improvement of $1 billion and increased long term margins of 40 per cent.... This will be achieved through a reduced cost structure, disciplined portfolio management, business improvement initiatives and investment and expansion of tier one, long-life, large scale, low cost assets. Transformation benefits realized in 2011 offset some of the cost pressures from current market conditions resulting in a full year EBITDA margin of 20 per cent."

Rio Tinto executives want to move the monopoly's "margin" from 20 per cent to 40 per cent on the backs of workers and local suppliers and any other factors it can bully using its global monopoly power.

"Rio Tinto's lockout impoverishes our region"

The larger monopolies become as they acquire other companies or merge, the more aggressive they become in "moving their margins up" at the expense of all others in the socialized economy. During the pre-2008 merger and acquisition hysteria, which was a factor in the ensuing 2008 economic crisis, Rio Tinto acquired Alcan in 2007 for $38 billion. This has since been exposed as a wildly inflated price. At the time of the acquisition, aluminum was selling for just under $3,000 a ton. Rio Tinto executives, similar to others caught up in the mortgage bond and stock market frenzy, believed their power to manipulate prices and markets was so powerful and the correct neoliberal thing to do that the economy could sustain their attacks on public right and excess forever. But the draining of value from other sectors and the people could not be sustained. An economic crisis broke out in 2008 and the price of aluminum fell to $1,500 a ton and now sits around $2,000.

Rio Tinto writes, "An impairment charge of $9,290 million was recognized in 2011, of which $8,855 million related to the Group's aluminium businesses. The valuation of Rio Tinto's aluminium businesses for impairment testing is based on our assessment of fair market value less costs to sell derived from discounted future cash flows."

This brings to $18.2 billion the amount Rio Tinto has written down of the $38 billion it paid for Alcan, a staggering amount that executives now want to take out of the hides of workers and suppliers, the "cost issues," as executives call them with a sneer.

The big score for the former owners of Alcan has resulted in depressed earnings for the owners of Rio Tinto, and executives are pressuring employees to make concessions to force up "the margin." However, the taking of $18 billion out of Rio Tinto has nothing to do with workers or the profitability of aluminum production but everything to do with the reckless aim of owners of monopoly capital to expand their capital at the fastest possible rate to become the most dominant empire in the world regardless of the consequences, of which economic crisis and disequilibrium at the workplace are two.

To maintain equilibrium in the economy, executives must recognize the rights of workers to trade union-standard wages and working conditions, and the lawful existence of their unions as representatives of all non-management workers.

In addition to the current lock-out of Alma workers, Rio Tinto locked out Boron, California workers from their borax mine in 2010, has announced the closure of the Lynemouth aluminium smelter in England and refuses to recognize the trade union rights of iron ore workers in Australia.

In another response to the crisis brought on with its reckless acquisition of Alcan, Rio Tinto is now using $7 billion from revenue to buy back shares in an attempt to keep the stock price from falling any further. The fall in share price has already unleashed a storm of criticism and any further decline would bring down the wrath of major shareholders onto the heads of certain executives identified as responsible for the current problems. Those executives want workers to pay for any problems with concessions. It must not pass!

The Alcan acquisition debacle was recognized within the company reports in an unusual public rebuke of the two main executives deemed responsible for the inflated purchase of Alcan, which of course ignores the fact that the aim of empire-building continually seizes the minds of those who represent the private interests of monopolies in both economic and political affairs.

Rio Tinto Chairman Jan du Plessis writes, "Whilst we have today reported excellent underlying earnings numbers, we also have to recognize that we have taken a significant impairment charge in relation to our aluminium business. As this charge largely relates to the acquisition of Alcan, Tom Albanese (CEO) and Guy Elliott (CFO) have notified the Remuneration Committee that they did not wish to be considered for an annual bonus and I think that is absolutely right."

To regain their bonuses and reputations as devoted representatives of owners of monopoly capital they have trained their guns on workers and they must be stopped! Problems arising from the greed and hubris of owners of monopoly capital and their representatives are not the fault of workers and they should not be forced to pay for them.

A healthy economy requires a modern standard of living for all, security of livelihoods and retirement and respect for the rights of workers, which includes the right to organize into a trade union to defend the rights of everyone working at a workplace without exception. The answer to these recurring economic crises is not to attack the rights of workers but to recognize the rights of the working class and to change the direction of the economy to one that is human-centred and under the control of the actual producers.

The reports attribute problems not only to the overpriced acquisition of Alcan but also to issues that arise from the global nature of monopoly capitalism and its refusal to develop international trade based on mutual benefit and outside the hegemony of the U.S. dollar. A modern cultured response to the crisis is needed that upholds public right. Public institutions are needed to control and determine wholesale prices based on a modern formula of prices of production in opposition to monopoly right to control prices. Monopoly manipulation of prices results in destructive price swings up and down with no relation to actual value such as with the case of aluminum from $3,000 a ton to $1,500. Those price swings, including the relative price of currencies, become yet another factor causing recurring economic crises.

"In the current market environment, costs are substantially higher due to continued strength in the Australian and Canadian dollars against the US dollar and an increase in input prices. [Problems have also arisen from] market volatility in aluminium prices leading to declines in market values for aluminium assets.... Higher exchange-traded aluminium prices increased earnings by $574 million compared with 2010. This was more than offset by adverse currency movements of $282 million, mainly from the strengthening of the Canadian and Australian dollars against the US dollar.... The 2011 average aluminium price was $2,395 per tonne, an increase of 10 per cent on 2010 [but dropped below $2,000 during the fourth quarter]."

In contradiction with the hysteria about the impairment charge, high costs and currency problems, the reports present a positive long-term outlook for the aluminum sector, in particular production powered with hydro-electricity.

"Growth in demand for aluminium remains strong.... Chinese production is still tracking internal demand, but has shifted more toward the northwest, where stranded coal is being used to generate electricity.... We have refocused on our core assets, in particular our world-class bauxite resources, industry-leading technologies and our modern portfolio of large scale, long life, hydro-based smelters.... We have seen some moderation in market expectations for global GDP growth in recent months, but it is still forecast to grow by around 3.3 per cent in 2012. All that we are seeing in China at present underlines our expectation of a soft landing in our key Chinese market, with growth in excess of 8 per cent in 2012. Longer term, the drivers of industrialization and urbanization in emerging economies remain in place and will lead to an unprecedented increase in demand for metals and minerals over the next 10 to 20 years. It is increasingly apparent that the mining industry as a whole will struggle to bring new supply to the market quickly enough to meet this heightened demand. The recent turmoil in the financial markets will only further delay new supply."

The relatively positive Rio Tinto stand for the future is reflected in the 2011 results in spite of the impairment charge and uncertainty of prices and currencies. The following results are from gross income from sales of $60.537 billion of which gross income from aluminum primary metal production was $6.985 billion compared with $6.415 the previous year. Primary metal production involves a majority of the Rio Tinto operations in Canada including smelting facilities and power generation installations. Rio Tinto Alcan as a whole had a gross income from sales of $12.159 billion compared with $11.313 billion in 2010.

"Rio Tinto announces record underlying earnings of $15.5 billion, 11 per cent above 2010.

"Record underlying EBITDA of $28.5 billion, 10 per cent above 2010.

"Record cash flows from operations up 16 per cent to $27.4 billion.

"Capital expenditure of $12.3 billion in 2011, compared with $4.6 billion in 2010. Total capital expenditure for 2012 on approved projects and sustaining capital is expected to be $16 billion."

Claims on value produced by Rio Tinto workers include:

- Workers' claims -- not provided

- Executive managers' claims -- not provided

- Owners of debt claim for interest -- $613 million compared with $696 million in 2010 [A large chunk of debt, which stands at $18.1 billion was refinanced or rolled over at lower interest]

- Owners of share equity claim for dividends -- $548 million compared with $457 million in 2010

- Claims of owners of shares through buy-back scheme -- $6.2 billion [continues into 2012 for a total of $7 billion]

- Expenditures from retained earnings and borrowing to purchase new plant and equipment and refurbish existing assets -- $12.3 billion compared with $4.6 billion in 2010

- Claims by governments as corporate taxes -- $6.197 billion compared with $4.100 billion in 2010 (The impairment charge of $9.290 billion was not tax deductible)

Under the heading "New projects and growth" the reports state, "The expansion of the Yarwun alumina refinery in Queensland from 1.4 to 3.4 million tonnes per annum is proceeding on schedule with first bauxite to be processed through the expanded plant in mid-2012."

The additional alumina must then be processed into aluminum presumably at Rio Tinto's own plants mostly in Canada.

"On 1 December 2011, Rio Tinto announced an additional capital investment of $2.7 billion to modernize its aluminium smelter in Kitimat, British Columbia, Canada. This new investment will allow for completion of the $3.3 billion project in 2014 and increase the smelter's current production capacity by more than 48 per cent to approximately 420,000 tonnes per year."

"Construction of a new 225MW turbine at the Shipshaw power station in Quebec, Canada -- $268 million. Approved in October 2008, the project remains on track and is expected to be completed in December 2012. An additional $40m was approved in 2011 due to currency impacts and scope changes."

"Modernisation of ISAL aluminium smelter in Iceland $487 million. Approved in September 2010, the project is expected to increase production from 190kt to 230kt between April 2012 and July 2014. The project includes a leading-edge casting facility to produce value-added billet."

"AP60 plant (60kt per annum) in Quebec, Canada $1.1 billion. Approved in December 2010, first hot metal is expected in February 2013."

Rio Tinto reports around 77,000 employees worldwide with operations in Australia, Canada, U.S., Africa, South America, Europe and elsewhere. The global operation is divided into six units. According to size of gross sales the units are Iron Ore ($29.909 billion); Aluminum ($12.159 billion); Copper ($7.634 billion); Energy, mainly coal plus uranium ($7.327 billion); Diamonds and Minerals ($3.220 billion); Other operations, mainly Pacific Aluminium ($8.246 billion).

Note

The Rio Tinto reports are capital-centred, which means they do not report from a human-centred outlook. The reports' categories are obsessed with the mass of produced and sold commodities and the amount of money they generate compared with the invested capital. They could care less about the humans who are the actual producers, the communities in which they live, the overall socialized economy of which mining and processing are a crucial part and the general interests of society without which people have nothing. Evidence of this anti-human nature of the reports stares a reader in the face. The workers who produce all value while transforming raw material are nowhere to be found in the reports other than obliquely mentioned as "costs."

In the full year report just under the very first item "Consolidated sales revenue" amounting to $60.537 billion, the claims of workers on the value they produce are included, although not directly identified, within "Net operating costs" along with actual costs of production such as machinery, with the dreaded brackets around the result signifying a negative drain on value ($36.260 billion). To make the insult worse, the item immediately following is the "Impairment charges" of ($9.174 billion) indicating yet another drain on value supposedly similar to workers.

This obsolete accounting has no place in a modern socialized economy. Workers should be at the forefront proudly showing the value they have added to the raw material they have transformed through their work-time into use-value. Following this would be the three main claimants on the added-value workers have produced at that level of production and ownership (workers, governments and owners of capital -- equity, debt and land) plus retained earnings and the claims of executives.

The cost of production is previously-produced-value (transferred-value) from other ownership groups and should be itemized separately (i.e. electricity, fuel, purchased raw material, amortized and depreciated plants and equipment, etc.)

The capital-centred reports also convey a sense of revulsion and even hatred for workers, for example, when they speak of closing production without any mention or consideration of the human factor and the communities that depend on the livelihoods involved and the value they produce.

"Six Australian and New Zealand assets have been transferred into Pacific Aluminium and seven other non-core assets have now also been transferred out of Rio Tinto Alcan. These assets are managed and reported separately from Rio Tinto Alcan while the Group investigates divestment options." (Emphasis added.)

"On 16 November 2011, Rio Tinto announced its intention to close the Lynemouth aluminium smelter (England).... This equates to a loss of annualized production capacity of 120,000 tonnes."

The closing of Lynemouth "equates to a loss of 120,000 tonnes" not hundreds of lost livelihoods, revenue for the community and broken dreams.

The contempt of Rio Tinto executives for workers is starkly expressed in announcing the unjust lockout of Alma workers.

"On 1 January 2012, Rio Tinto Alcan announced that it had initiated a lockout at the Alma smelter, and shut down two-thirds (292,000 tonnes) of the smelter's capacity to protect the safety and integrity of aluminium operations after labour negotiations failed to reach agreement."

The executives are concerned about "the safety and integrity of aluminium operations" not the human factor in the Saguenay-Lac-Saint-Jean region and their communities, the actual producers who are defending their right to unite as a collective and claim a Canadian-standard livelihood from the value they produce and prevent even more value being taken out of the region than Rio Tinto executives already do.

Why New Investments Do Not Create Jobs

TML Daily carried an article which gave the example of what Rio Tinto is doing at the Pilbara iron ore mines in Australia where workers are fighting to reorganize their trade unions to defend their rights. In response, Rio Tinto executives launched a court battle against the workers, while, at the workplace they are frantically spending millions for "driverless trucks" and other mechanized ways to attack the human factor. The company announced:

"On 2 November 2011, Rio Tinto announced that it is to become the owner of the world's largest fleet of driverless trucks after it signed a deal to buy at least 150 from Komatsu Limited over the next four years. The new trucks, which will start arriving in 2012, will be used in Rio Tinto's Pilbara iron ore mines and can be managed from its Operations Centre in Perth more than 1500 kilometres away. The move follows the successful trial of driverless trucks and represents a 15-fold expansion from the previous plan to double the fleet to ten trucks."

Rio Tinto is in utter denial that the falling rate of profit will turn their investment into another nightmare that will come back to haunt them. It is workers who produce their machines and the value to pay for their machines. What is not produced, cannot be distributed. Rio Tinto's frenzied attacks on labour are self-defeating indeed.