Steelworkers See Worst Time Since Depression : As Union Opens Annual Meeting, Members Bear Brunt of Industry’s Woes
It is a gorgeous late summer afternoon in Pittsburgh, the kind of day they dream about in the Rust Belt when the wind-chill factor starts to take its toll. But inside the downtown office of Lynn Williams, president of the besieged United Steelworkers of America, it might as well be the dead of winter already.
For Williams, a slender, soft-spoken 62-year-old Canadian who could easily be mistaken for an academic, there is no escaping his union’s troubles, which have only become progressively worse as the summer has dragged on. Sitting at his conference table at the end of another frustrating day, Williams sighs with trademark understatement: “I think we are in a very difficult position.”
In fact, just as this once muscular industrial union gets ready to celebrate its 50th anniversary at its convention in Las Vegas opening today, its fortunes appear close to rock bottom.
A seemingly unstoppable flood of imports, coupled with an enormous glut of domestic steelmaking capacity, have wrought the worst crisis in the steel industry since the Great Depression, and the Steelworkers are bearing the brunt of it.
More than 22,000 of the union’s members are now in the fourth week of an already bitter walkout at the nation’s largest steelmaker, USX Corp., amid growing signs that the dispute could last for months. Meanwhile, the second-largest producer, LTV Corp., has just entered bankruptcy court proceedings. The seventh-largest, Wheeling-Pittsburgh Steel, has been there for more than a year, and No. 3 Bethlehem Steel Corp. may not be far behind.
As a result, the union and its rapidly shrinking membership ranks have been forced to absorb one brutal blow after another over the past year, but the bad news is that this may not be rock bottom after all. The worst is probably still to come, as more steel mills shut down and more and more of its members lose their jobs for good.
Already, the union’s membership of about 675,000 is less than half its 1965 peak of nearly 1.4 million, and, with more losses almost inevitable, Williams faces the prospect of presiding over the Steelworkers’ slide into weakness and insignificance.
“The Steelworkers are under more extreme pressure than almost any other union in the country,” notes Audrey Freedman, a labor economist at the Conference Board in New York.
“They’ve gone from one extreme to the other, from representing workers in a powerful industry that was a protected oligopoly, to representing the work force in an industry that is now one of the weakest in the country.”
Under Williams, the union has tried hard to battle back, overhauling its tradition-bound relations with most of the major steel producers in order to help them compete with low-cost foreign steelmakers. Williams has decided to deal with the industry more on its own terms, and now the union is employing sophisticated, corporate-like techniques, even to the point of going to Wall Street for financial advice, in an effort to confront its crisis.
“We’ve been pushed by circumstances to go to the other side and use some of their talent,” notes Williams.
And, while fighting rear-guard actions in steel and its other troubled sectors like aluminum and copper, the Steelworkers have stolen another page from management’s book: diversification. The Steelworkers have grown by absorbing smaller unions in unrelated industries, while organizing has been stepped up in health care and other service and public sector fields that are growing, rather than shrinking.
Today, the Steelworkers have 130 full-time organizers in the United States and Canada, more than at any time since the late 1940s, and basic steel now accounts for only 18% of its membership.
“Anybody that wants to join a union and relays that interest to us, no matter what field they are in, we’re there,” says Scotty McGarry, director of organizing for the Steelworkers.
Williams thus sees the union’s strategy as a two-pronged approach to the crisis--save what you can of the old but get as much as you can of the new.
“We see our future in both directions,” Williams says. “We represent people in basic sectors, and we see a large part of our responsibility as making the case for those workers that America needs these industries and must act to protect them.
“But at the same time, the labor movement can’t be blind to the changing mix of the labor market.
“I see our strategy as the difference between just management of defeat and working for growth. We don’t want to change our name and become the United Service Workers of America, but we also don’t want to become the Harness Workers Union of this generation.”
Try Almost Anything New
And so in steel, the union has shown a new willingness to try almost anything. It has hired investment bankers to provide detailed financial analysis of the companies seeking concessions, negotiated with big shareholders to oust management when companies have refused to bargain and has used its role as a creditor in bankruptcy cases to ward off attempts by bankers to liquidate the assets of its employers.
Now, the union has won its first seat on the board of directors of a major steel producer at Wheeling-Pittsburgh, obtained employee profit-sharing and stock plans at others and has hammered out strong job security and employee-involvement programs in an effort to break down the industry’s rigid bureaucracy.
In return, the union has agreed since last year to dramatic wage and benefit cuts at five major steel firms, in addition to streamlined work rules that have eliminated thousands of jobs, all in a desperate effort to keep the companies afloat. The Steelworkers have also convinced most of the major producers--with the notable exception of USX--to join a novel new labor-management lobbying committee, in order to pool their political clout to pressure the Reagan Administration to crack down on steel imports.
“We’ve done a complete 180-degree turn on how we’ve approached these companies,” says Paul Rusen, a former Steelworkers official who now represents the union on the board of Wheeling-Pittsburgh Steel. “We’ve gone from the old table-pounding to some very sophisticated legal and financial analysis of these companies, and so we’re dealing with them in the real world.”
But it may be too late.
“Time is running out for the steel industry, if it hasn’t run out already,” warns Louis Schorsch, a steel specialist with McKinsey & Co., a management consulting firm. “Certainly, the Steelworkers are trying at least some different kinds of approaches. But right now, the union is like the little boy with his fingers in the holes in the dike, except the whole dike is falling apart.”
Simply put, there are too many steel mills in America chasing too few customers. And now, some industry analysts believe the union may even have unwittingly contributed to that underlying problem.
As a political organization, the Steelworkers haven’t been able to sacrifice the jobs of some members so that others can keep working. As a result, weak firms that might have collapsed without lower labor costs have been propped up with the union’s help. That has allowed the glut of steelmaking capacity to continue to plague the industry, depressing steel prices and draining the resources of the most efficient producers.
That issue is the key to the walkout at USX, formerly U.S. Steel. The company, which has traditionally had very poor relations with labor, is demanding the same low wages and benefits the Steelworkers have granted LTV and Bethlehem. And USX is threatening to shut down more mills unless the union gives in. But union officials argue that they must finally draw the line on wages and that a relatively healthy firm like USX shouldn’t get the same breaks given one that’s trying to reorganize its finances in bankruptcy court.
Downward Spiral
“In 1983 (when the union granted an initial round of concessions to U.S. Steel and the rest of industry) we gave, and it didn’t help,” says Larry Regan, president of Steelworkers Local 1014, which represents workers at USX’s big Gary Works in Gary, Ind. “We gave and gave and gave, and then USX turned around and lowered its costs and cut jobs, and now they are coming back for more.”
Williams agrees that it’s time for the union to halt the downward spiral in the standard of living of the American steelworker and for the industry and the Reagan Administration to realize that Americans can’t be expected to work for the kind of wages paid in Korea or Taiwan. The only alternative to the eventual destruction of the U.S. steel industry, he adds, is more trade protection than has been offered by the modest import quotas imposed by the Reagan Administration in 1984.
“The union can’t stabilize the steel industry by itself,” says Williams. “Reducing wages is no solution at all, there’s no end to where that takes you. Every time we lower wages here, that will just elicit the same response overseas. The industry knows that. So without some significant changes in public policy, the destabilization will continue.”
