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February 11, 2016 U.S. Steel's Wrecking of Stelco What is the Monitor Monitoring? U.S.
Steel's
Wrecking
of Stelco U.S. Steel's Wrecking of Stelco What is the Monitor Monitoring?At the beginning of the CCAA fraud, U.S. Steel appointed Alex Morrison, of the U.S. accounting and investment company Ernst and Young, as the court monitor for its escapade into the Companies' Creditors Arrangement Act (CCAA). Morrison's latest report leaves people wondering what the monitor is monitoring.
Morrison writes that the former Stelco, which U.S. Steel has systematically wrecked since seizing control in 2007, lost $144 million in 2015. Steel shipments from both Hamilton and Nanticoke dropped 22 per cent through the year from the previous equally disastrous year. This coupled with a fall in steel prices sliced $87 million in revenue from the Hamilton plant and a whopping $652.3 million from Lake Erie Works.
Morrison makes the inane observation that the troubles in the global steel business and lower shipments, which are aggravated by lower prices, are still hampering the company. The monitor's simplistic descriptions of the situation are worthless. They reveal either complete ignorance of U.S. Steel's wrecking of Stelco as the culprit behind the continuing disaster or are a deliberate attempt to throw dust in people's eyes. USS has ruined the steelmaking capacities of Stelco and even the U.S. monopoly makes no bones about it. For the big losses in the last quarter of 2015, the monitor deliberately ignores the fact that U.S. Steel sought and received CCAA approval to abscond with Stelco's auto contracts for that quarter and into the future.
The monitor makes no mention of the old rule of thumb for Stelco: when the Canadian dollar goes below 88 cents to the U.S. dollar, Stelco easily competes with U.S. steel companies. The dollar is now just above 70 cents. Stelco should be knocking the socks off all non-Canadian steel companies especially those producing in the U.S. and even those from China. But U.S. Steel has locked Stelco into old contracts and its captive subsidiary is not in a position to find new ones.
The monitor states, with some enthusiasm it seems, that Stelco lost $144 million in 2015, as if to prove that it should be in the fraudulent CCAA, but he fails to go into why the plants are not running at anywhere near capacity so of course they will "lose money." In my view the monitor, U.S. Steel and the entire CCAA should be monitored for conspiracy to commit fraud against Canadians.
Veteran steelworkers know that here at Stelco we used to make over 140 grades of steel and literally hundreds of products. All that began to disintegrate with NAFTA's free trade and Canada's "integration" into the U.S. global market and the nation-wrecking of the Liberal and Conservative governments of Chretien, Martin and Harper. Just before U.S. Steel shut down our blast furnace, we were making about a dozen grades of steel. But of course USS blew up in smoke what was left of our steelmaking.
On the monitor's comments on the issue of the price of steel, this is reminiscent of the last Stelco adventure into the Wild West Show of CCAA in 2004. Then and now steelworkers are faced with the incoherence of not having a coherent steel pricing regime. And the masters of industry simply dismiss the issue of pricing as impossible to control as if fire cannot be brought under control or some other naturally occurring phenomenon just keeps beating us on the head.
The monitor casually reports that the price of steel has gone down from $700 per ton to $350 per ton in a matter of months and steel companies are losing their shirts. And nothing can be done about it! That is nation-wrecking not nation-building!
Remember in 2004 when Stelco filed for its CCAA fraud,
the price of
hot band was less than $300 a ton and less than six months later it was
over $1000
a ton. Hamilton workers received an ISP bonus for the first time in 10
years while the company was in CCAA! Unfortunately this time around, a
U.S. company
controls Stelco and there will be no bonus even if the price goes up.
This CCAA fraud has to stop and the problems of the steel industry be
faced head on. The workers affected by this deliberate nation-wrecking
deserve better.
Capital-Centred Thinking and Its Power to Deprive   A report in the Pittsburgh Tribune-Review says, "U.S. Steel Corp. will be watching every dollar as the Downtown-based steel producer focuses on cutting costs and conserving cash while waiting out a prolonged industry downturn that it is powerless to change." The choice of the word "powerless" to describe U.S. Steel's predicament raises questions. If U.S. Steel is powerless, where does the power lie? The newspaper does not elaborate because the issue of who holds power within the economy is important in fashioning a new direction that solves its problems. The newspaper and others in the ruling imperialist elite do not want discussion of a new direction and how to step out on a human-centred path that solves problems and resolves existing contradictions in favour of the working people. They prefer to describe a situation that appears to be out of control with no good solutions and with no one having the power to do anything about it. It could be described as a state of anti-consciousness in which they want to keep the human factor, in particular the working class, feeling powerless to deal with its condition and without direction. If the ruling elite have no power to change the situation, then what chance does the working class have to do anything, they want the people to believe.
The CFO cries out in hope for a recovery while in the meantime conserving cash by not spending on renewal of means of production, and by attacking the claims of the working class and laying them off in their thousands. When confronted with problems, humans expect more from themselves and their leaders than attacks on their well-being and impotent calls to hope for something good to happen. The newspaper says the cries of despair came "a day after [U.S. Steel] posted a nearly $1 billion loss in the fourth quarter and provided a pessimistic outlook for the year. Investors dumped the company's stock Wednesday, pushing it down 14 percent, or $1.10, to $6.67." The description of the wretched conditions continued, adding to the overall gloom and sense of powerlessness of the article: "The slump in steel prices, caused in part by a flood of cheap imports and weak demand for pipe from oil and gas drillers, has caused the company to idle or close operations in Alabama, Illinois, Texas and Minnesota and layoff thousands of workers. Steel prices have fallen 28 percent in the last year." Not to speak of the wrecking of its Canadian operations.
There you have it: no control, deep pessimism, no power to solve problems, just the impotence of capital-centred thinking to continue on the same direction tumbling from crisis to crisis, the anti-human/anti-social-consciousness of the ruling imperialist elite. The working class has to reject this line of powerlessness in its entirety. Another way is possible; a powerful human-centred thinking is possible. The power to deal with problems stems from the power to deprive the ruling elite of their power to block humans from solving the problems and contradictions they face. The power to deprive in the hands of the people is connected with abstracting absence, a most human capability. A social power deprives the people of understanding what is missing in solving problems. The necessity is to remove the influence of the social class power that is depriving the people from abstracting absence and thus open up the immense possibilities to solve problems and bring about renewal and progress. The power depriving the people from solving problems at this point in history is the power to deprive held by the ruling imperialist elite, the power to deprive the people of abstracting absence and solving problems. The ruling imperialist elite have the power to deprive and part of that power is to block the working class from attaining any consciousness of its own immense latent power to solve problems that is found in its numbers and class position as the actual producers of all goods and services and in its human-centred thinking. The power of the human factor/social consciousness once unleashed will transform the world not least of which will be a new pro-social direction for the economy to solve its many problems.
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The newspaper continues in
this vein quoting U.S. Steel chief financial officer David Burritt
saying, "We do not know how long the industry recession will
last, but we know we are managing our business to maintain a strong
cash position and to be prepared to respond quickly when the recovery
begins."
The first hint of something
substantial that could lead
to a solution to the crisis came and quickly went as Andrew Lane, a
financial analyst said, "Ultimately
the key driver of profitability is going to be the price of steel." But
he and the newspaper refused to analyze how low prices could be raised
to a profitable level.
Instead they retreated to the theme of lack of power saying, "U.S.
Steel has no control [over the price of steel]" adding dejectedly that
the other "driver of
profitability, "volumes of tubular products, which are going to be
driven by oil prices, [are] another variable over which management has
no control."