December 16, 2010 - No. 216

U.S. Steel's Abuse of Its Dominant Position

Is U.S. Steel Guilty of Extortion?

• U.S. Steel's Abuse of Its Dominant Position: Is U.S. Steel Guilty of Extortion?
• USW Local 1005 President Rolf Gerstenberger Addresses CAW Council: Video
• CUPE Stands in Solidarity with Locked Out USW Local 1005
• Hamilton Day of Action: The People vs. U.S. Steel -- January 29, 2011

Contrecoeur, Quebec
• Steel Beam Mill Needed More than Ever
• Workers Demand Company Uphold Pledge for Steel Beam Mill - Interview, Claude Langlois, President, USW Local 6586

• Letters to the Editor

For Your Information
• United States Steel: Ownership, 2010

SUPPLEMENT
• History of United States Steel Company - Part Two -- 1920 to 1952: Steel Industry After the First World War

U.S. Steel's Abuse of its Dominant Position

Is U.S. Steel Guilty of Extortion?

USW Local 1005, whose 900 members have been locked out by U.S. Steel since November 7, has accused U.S. Steel of not bargaining in good faith. A resolution passed by Hamilton City Council also referred to U.S. Steel's use of "intimidation tactics" to get the workers to submit to its dictate. In fact instead of bargaining in good faith to achieve a mutual benefit, U.S. Steel is abusing its dominant position to blackmail the workers into "agreeing" to change their pension arrangements. It wants the union to abandon the indexing of the pensions of 9,000 retirees, 3,000 of whom make as little as $300-1000 a month, 78 per cent of whom are widows, and to give up a defined benefit pension plan for new hires. In other words, U.S. Steel is telling the workers that if they do not "willingly agree" to these changes, it can get away with abusing its dominant position to get what it wants. Is this not clearly a form of blackmail? And is not blackmail a form of criminal extortion?

Section 346 of the Criminal Code sets out the offence of extortion: "346. (1) Every one commits extortion who, without reasonable justification or excuse and with intent to obtain anything, by threats, accusations, menaces or violence induces or attempts to induce any person, whether or not he is the person threatened, accused or menaced or to whom violence is shown, to do anything or cause anything to be done."

A corporation is a person under Canadian commercial law. If a person such as U.S. Steel tries to have someone do something, and does so by "threats, accusations, menaces or violence," then that person may be guilty of extortion.

Last May, U.S. Steel threatened Local 1005 that if it did not agree to change the pension plan, then U.S. Steel would deprive its members of their livelihoods and benefits. The threat turned to action and, on November 7, U.S. Steel locked the workers out even though they never held a strike vote and clearly said they wanted to carry on production. As of November 8, U.S. Steel has also suspended all health benefits including prescription drugs, medical, dental and vision, and life and disability benefits.

The material gain U.S. Steel wants to attain through these threats and actions is relief of its pension obligations that it assumed upon buying Stelco in 2007. The pension obligations exist under the authority of the government of Ontario and do not conclude until December 31, 2015. U.S. Steel and its predecessor Stelco received material benefit from the government for agreeing to the present pension arrangement: a $150 million grant/loan and an extension from five to ten years before the fund must be made solvent according to established accounting rules. U.S. Steel is now reneging on its commitments. It forced Stelco Lake Erie Local 8782 through an eight-month lockout to give in to the pension changes the monopoly wanted and took this "submission" to the Ontario government as "proof" that even steelworkers want to change the pension agreement.

Now, it is attempting to blackmail Local 1005 into agreeing with the same thing. This attempt is particularly egregious in that 900 active steelworkers are under pressure to decide an issue that directly affects over 9,000 retirees and does not immediately affect those the company wants to vote on the matter.

Local 1005 has consistently said that it is willing to discuss the problems facing the pension plan in good faith and come up with a solution in conjunction with the Ontario government. One proposal made was to extend the period beyond the end of 2015 that the pension fund must be made solvent without penalty. Local 1005 has also publicly stated that pensions are a social issue that need to be addressed collectively as a nation so that all Canadians are guaranteed a dignified retirement according to their particular standard of living throughout their working life. If companies are serious about addressing this social issue they must work in conjunction with governments to guarantee pensions for all. This is summed up in the slogan on billboards which have gone up in Hamilton: Steelworkers Fighting for the Security of All in Retirement! as well as the slogan Defend the Pensions You Have; Fight for Pensions for All!

Image displayed on Hamilton billboards and also postcards being used to raise funds for USW Local 1005.

U.S. Steel has refused to take the road of good faith bargaining with Local 1005. For its part the government of Ontario which entered into the pension agreement with U.S. Steel says it has no grounds to act because U.S. Steel has not changed the agreement. In other words the government thinks it can get away with not taking a stand against U.S. Steel's mafia tactics of trying to extort the changes it wants on the grounds that its role only kicks in if U.S. Steel actually changes the agreement. But how will it do that? Clearly, it makes no sense except by getting the union to "agree." Then, should these mafia tactics succeed and should the union "agree" to make the changes, the government could claim it has no grounds to intervene to defend the agreement because both affected parties have agreed to change it!

What kind of relations of production and democracy is the government of Ontario endorsing where extorting material benefit from employees is the preferred monopoly method rather than bargaining in good faith with workers' collectives based on mutual benefit? As it stands, the agreement signed between U.S. Steel and the government of Ontario does not end until December 31, 2015 and it must be upheld!

Not only USW Local 1005 but the people of Hamilton and all of Canada oppose the refusal of monopolies to bargain in good faith with their employees. There are more and more examples of monopoly dictate becoming forms of extortion based on "might makes right." It must not pass!

USW Local 1005 President Rolf Gerstenberger
Addresses CAW Council: Video

Click image to view video.

CUPE Stands in Solidarity with
Locked Out USW Local 1005

- December 15, 2010 -

The Canadian Union of Public Employees' (CUPE) National Executive Board (NEB) today passed a resolution to provide moral and financial support to the 900 members of United Steelworkers Local 1005 in Hamilton, Ontario who have been locked out by the U.S. Steel Canada Group since November 7, 2010.

"We need to support these workers that are under attack," said CUPE National President Paul Moist. "The Steelworkers' fight is very much a CUPE fight."

U.S. Steel Canada Group is a subsidiary of U.S. Steel, a 100 per cent American-owned corporation. It purchased the Hilton Works from Stelco in 2007, changing the plant name to U.S. Steel Hamilton Works. Workers were locked out after refusing to agree to pension changes being pushed by the new American owners.

U.S. Steel wants to have all new hires enroll in a defined contributions pension plan rather than the current defined benefits plan. It also wants to remove indexing for all current and future retirees under the existing defined benefits pension.

"CUPE's 600,000 members stand united with the Steelworkers," said Moist. "We must help as much as we can to stop the erosion of defined contribution pensions in this country."

The resolution, passed unanimously, commits a $10,000 contribution to the USWA Local 1005 strike fund. It also calls on Prime Minister Stephen Harper and Human Resource and Skills Development Minister Diane Finley to extend employment insurance benefits to those locked out, and for changes to the rules governing foreign takeover's to better protect workers.

The NEB is encouraging CUPE locals to provide financial and picket line support. CUPE National President Paul Moist will be visiting the USWA Local 1005 picket line later this month.

For more information, contact:

CUPE Media Relations: (613) 237-1590 ext. 393

Hamilton Day of Action
The People vs. U.S. Steel
January 29, 2011

Click image to download poster (PDF).

Contrecoeur, Quebec

Steel Beam Mill Needed More than Ever

File photo: Steelworkers in Contrecoeur, Quebec, hold mass rally to demand steel beam mill, June 14, 2009.

The steelworkers of the former Sidbec-Dosco plant, now ArcelorMittal, in Contrecoeur, Quebec, continue to demand that ArcelorMittal add a beam mill to the facility as it has promised since December 2007. At that time, ArcelorMittal announced that it was moving its flat products production to Dofasco, in Hamilton, which it had just added to its global empire. It closed two mills causing a loss of 500 jobs in Contrecoeur. At the same time, ArcelorMittal created fanfare about its decision to build a beam mill in the Contrecoeur facility with the assistance of the Quebec government. It was to become operational before the end of 2010. Nothing has been done and just recently ArcelorMittal created doubt via remarks reported by the media that the mill will ever be built. It does not consider that it has any responsibility towards the workers, the region, or the steel industry in Quebec and in Canada.

TML reiterates its full support for the demand of the Contrecoeur workers. Workers do not accept the so-called argument of ArcelorMittal that the mill cannot be built because the market for steel beams is low. When the markets for flat products were high in 2007, ArcelorMittal still closed the two mills in Contrecoeur. Similarly, it said the markets for steel beams were high in 2007 and it took no action to establish beam production. These are pragmatic arguments from the monopoly to negate its responsibility to the Contrecoeur workers. These arguments also deny the reality that Quebec and Canada need a diversified sovereign and self-reliant economy in which the steel industry plays a key role for the benefit of all, not that of a few private empires.

Workers Demand Company Uphold Pledge
for Steel Beam Mill

- Interview, Claude Langlois, President, United Steelworkers Local 6586 -

"Quebec's steel industry must be saved"; "We want the steel beam mill"; "Unite to save the regional economy"

TML: What are the latest developments in your struggle, especially to hold ArcelorMittal to its promise to build a steel beam mill?

Claude Langlois: At the moment we are 600 production workers in the plant. We make slabs, billets and wire. We lost 500 jobs at the end of 2007 when the employer ArcelorMittal transferred its production of flat products to Dofasco and closed two mills. At that time, we did our utmost to avoid layoffs and the 500 job losses were covered by early retirements and people taking severance packages.

Right at that time, ArcelorMittal pledged to build a beam mill by the end of 2010 which would have meant 200 full-time jobs. ArcelorMittal went to the media claiming the project was a done deal, that the Quebec government was behind it, etc. We are wondering if was just something to boost the company's public image. However, for us, a beam mill is a way to compensate for some of the job losses and also to save the steel sector in Quebec.

As I have said many times before, for ArcelorMittal not to recognize any commitment to us means that they benefitted from the privatization by the Bourassa government and his then Minister of Industry and Trade, Gérald Tremblay, without any duty towards the consolidation of the Quebec steel sector. [The Quebec government-owned Sidbec-Dosco was sold for close to nothing in 1994 by the Quebec government to Ispat International which later on became ArcelorMittal -- TML Ed. Note.] The Contrecoeur facilities have been most profitable for ArcelorMittal. It is through us that ArcelorMittal set foot in North America. In all our history we have always fought both to save jobs and to save the Quebec steel sector. We believe in it and we are going to keep fighting.

For us it is also an issue of fixing the problem whereby ArcelorMittal has not put a penny into the facility, despite the fact the union always asked the company to do so. ArcelorMittal is telling us that it made business sense to use the Dofasco operation for the flat products instead of ours because it is more modern and productive, but it is ArcelorMittal which always refused to invest money in Contrecoeur.

In our work we have always mobilized the community. We have to keep in mind that besides these job losses, we have also been severely hit by the economic crisis and especially by lay-offs. so we need that beam mill more than ever.

We signed a new contract recently. As we were about to sign, we asked the company what was happening with the beam mill. We were told that the Contrecoeur management had no decision in this, that only the head office could decide. We were able to negotiate a letter of understanding in which the company pledged to make a market analysis. During the negotiations, we were struck by the fact that the company kept saying that the demand for steel beams was bad. Besides, the market was there in 2007 and they did nothing. They came back to us in July with their study which concluded that the demand for beams is going to be very low until 2014-2015. The project has been put on ice, as they say, but we are not letting it go. This is a pledge that they have made to us. We need it for the jobs, for the community and for the Quebec steel sector.

Letters to the Editor

An Alternative to Neoliberal Globalization Required

TML has correctly assessed that Canadians from their direct experience and analysis of the economic crisis know that neoliberal globalization is a disaster. An ugly example of globalization is that of the foreign intruder called U.S. Steel, which since the takeover of Stelco, has engaged in one act after another to wreck this important Canadian economic institution and humiliate active and retired steelworkers.

In opposition to this attack and others committed by the global monopolies Vale Inco, Xstrata, Shell etc., Canadians are discussing pro-social alternatives and organising around an agenda to build a self-reliant diverse sovereign economy where the human factor and social consciousness are at the centre.

The global monopolies and Canadian governments in their service deny an alternative is possible. Their fawning political representatives such as Harper and Premier McGuinty refuse to stand up and defend Canadians who are under assault. It must not pass! We must find ways to hold governments responsible. Local 1005 and its 900 workers are to be commended for their stand.

[Signed]
Toronto

History of U.S. Steel Supplement

Thank you for the brief history of U.S. Steel. The article points out:

"During the 1920s, the Carnegie Institution's eugenic 'scientists' cultivated deep personal and professional relationships with Germany's fascist eugenicists. Many of these Germans would become the murderous doctors of the concentration camps. In 1923, Davenport and Laughlin added a subtitle to the name of Eugenical News, i.e., Current Record of Racial Hygiene, acknowledging the Nazis' unique term for eugenics. Articles by German raceologists such as Erwin Bauer, Eugen Fischer, and Fritz Lenz were frequently reprinted in Eugenical News. Fischer and Lenz later became two of the most notorious lab-coated commandants of Hitler's mass extermination camps."

The influence of this "research" is seen in many places including Alberta. In 1928, the province passed legislation that enabled the government to perform involuntary sterilizations on individuals classified as mentally deficient. In order to implement the Sexual Sterilization Act of Alberta in 1928, a four-person Alberta Eugenics Board was created. These four individuals were responsible for approving sterilization procedures. Not until 1972 --- a quarter century following the destruction of Nazi rule in Europe --- was the Sexual Sterilization Act repealed, and the Eugenics Board dismantled. During the 43 years of the Eugenics Board, it approved nearly 5,000 individual sterilizations, and 2,832 procedures were actually performed. The province was the first part of the British Empire to adopt a sterilization act, and was the only one which vigorously implemented it. During the debates on this bill, there were many references made to U.S. legislation in this field. Those speaking in favour of eugenics schemes included the future leader of the Canadian Commonwealth Federation (CCF) J.S. Woodsworth, Nellie McClung, and other social liberals who swallowed whole the malarkey that the promoters of eugenics promised about "improving" the "human gene pool."

As for the Cold Spring Harbour facility, down to the present decade it continued to incubate the "true believers" in these utterly discredited fascist theories. On October 23 , 2007, Dr James Watson, co-discoverer of DNA, "retired" unexpectedly from the chancellorship of the lab amidst the uproar that followed his reiterating that DNA research, the sequencing of the human genome and the development of "gene therapies" had not refuted his claims that African-Americans were "genetically inferior" to other population groups in the United States. (William Saletan, "Doctored Watson -- Racism, science, politics, and revisionism," posted 9:54 a.m. Eastern time Friday 26 October 2007 on the Slate Magazine website at: http://www.slate.com/id/2176709/)

A reader in Alberta

For Your Information

United States Steel: Ownership, 2010

Shares Outstanding            144 million
Institutional ownership       80.7%
Top Ten Institutions          37.9%
Mutual Fund Ownership          2.8%
5%/insider Ownership           0.52

Capital Research Global Investors     10,661,200     7.4%
Vanguard Group, Inc.                   7,113,414     5.0%
BlackRock Institutional Trust          6,274,009     4.4%
State Street Global Advisors           6,020,123     4.2%
Eaton Vance Management                 5,146,752     3.6%
Lord, Abbett & Co                      4,503,811     3.1%
Columbia Management Investors          3,921,525     2.7%
Capital World Investors                3,860,000     2.7%
Thornburg Investment Management        3,850,359     2.7%
T. Rowe Price Associates               3,160,010     2.2%
ClearBridge Advisors                   3,037,249     2.1%
TCW Asset Management                   2,182,326     1.5%
Putnam Investment Management           2,064,960     1.4%
Blenheim Capital Management            1,953,000     1.4%
APG Asset Management                   1,891,329     1.3%

Capital Research Global Investors is the largest shareholder of U.S. Steel. The Capital Group Companies is one of the world's largest investment management organizations with assets of around one trillion USD under management. It comprises a group of investment management companies, including Capital Research Global Investors, Capital Research and Management, American Funds, Capital Bank and Trust, Capital Guardian, and Capital International. The firm was founded in 1931 by Jonathan Bell Lovelace. Capital Group is headquartered in Los Angeles and has over 7,500 associates in 21 office locations around the globe.

Capital manages money for pensions, governments, and other entities worldwide, for wealthy individuals, and engages in private equity investments. The American Funds was as of June 2007 the largest family of mutual funds in the US. A September, 2009 study in the scientific journal Physical Review concluded that The Capital Group was the most powerful controlling shareholder in the global stock market, with major stakes in 36 of 48 countries studied, which include significant shareholdings in many of the world's largest corporations. The three main executives are the chairmen of three of the constituent companies: David I. Fisher, Shaw B. Wagener, and James Rothenberg.

Read The Marxist-Leninist Daily
Website:  www.cpcml.ca   Email:  editor@cpcml.ca