LL:ART: Steelworkers' Strike. "We have had a gut full"

[Communist Party of Australia]

The following articles were published in "The Guardian", newspaper
of the Communist Party of Australia in its issue of Wednesday,
January 31st, 2001. Contact address: 65 Campbell Street, Surry Hills.
Sydney. 2010 Australia. Phone: (612) 9212 6855 Fax: (612) 9281 5795.
CPA Central Committee: <[EMAIL PROTECTED]>
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Steelworkers' Strike: "We have had a gut full"

On Tuesday January 23, 800 steel maintenance workers at
BHP's largest steelworks downed tools and walked off the job for
48 hours, as the fight for job security intensified. After a
decade of job losses and huge profit-making by BHP their anger
boiled over. BHP's latest attack on jobs involves a proposal to
contract out up to 800 maintenance and emergency service jobs at
its Port Kembla steelworks on the South Coast of NSW.

Paul Matters

BHP's industrial relations strategy is in crisis at Port Kembla,
as the steelworkers strike against the threat of massive job
losses.

The steelworkers first struck on November 10 last year against
BHP's job shedding plans.

BHP has intensified the exploitation of its workforce and
increased the profit share to senior managers and shareholders at
the cost of jobs and increasing poverty in the steel regions.

It defends its actions with the familiar rhetoric of capitalist
globalisation. BHP Steel chief Kirby Adams sermonised, "We
can't hide behind some fence called Australia and do it
differently."

Chief Executive Paul Anderson, who is paid $7.4 million per year
in salary and stock options and is expected to leave Australia
with at least a $40 million payout when his finishes with BHP,
said he had a "long-term objective of reducing costs in real
terms by a couple of percentage points a year over the next four
or five years."

The job shedding has not been confined to the steel industry. In
the NSW coalfields, which supply the Port Kembla steelworks, BHP
has also engaged in extensive mine closures and job cuts.

Since the middle of 1997, 800 mining jobs have been cut from the
Southern coalfields.

In January 1998, BHP announced a further 140 job cuts in its
Eloura, Appin, Tower and West Cliff mines.

At Blackwater in Central Queensland, mineworkers are fighting
moves by BHP to sack some 200 employees in a regional community
already hard hit by unemployment.

In the Pilbara in Western Australia, BHP has embarked on another
anti-union offensive with the aim of excluding the union and
replacing collective agreements by individual contracts.

In fact BHP is doing nothing differently to any other big
corporation. It is pursuing a classic multinational strategy of
capital accumulation and exploitation. And in the last ten years
it has been spectacularly successful.

Bloody Huge Profits

In the decade since 1989, BHP has made $4.1 billion profits
(excluding abnormal items) from steel workers.

In the last financial year BHP's steel profit was $410 million,
an increase of $142 million, a staggering 53 percent increase
over the previous year.

Anderson unimpressed said, "These results fall far short of
what our shareholders have a right to expect."

This was the year that BHP closed the Newcastle steelworks
throwing 4000 workers on the dole queue and sold off its Long
Products operations.

In 1995, the authoritative "Fortune 500" survey rated
BHP Steel in the top five most profitable and productive steel
companies in the world.

How have these massive profits been achieved?

Profits in capitalist society are unpaid labour. Profits are
created because the wages paid to workers are less than the value
in the goods and services produced by them; this surplus value is
the source of capitalist profits.

This exploitation of steel workers is the basis of BHP's massive
profits.

In 1999 when BHP's steel profits increased by 53 per cent its
total steel sales only increased by 2.3 per cent to 8.5 million
tonnes.

This level of steel production and sales has been fairly constant
over the last ten years. So the huge leap in profits cannot be
explained by increased market share and higher steel sales.

BHP's profit explosion has been achieved by an
intensification of exploitation of steelworkers.

This has been achieved by two means.

1. Reducing jobs and work reorganisation

 >From 1990 to 1999 employment in the Australian iron and steel
industry fell from 41,792 to 29,126.

In the Port Kembla steelworks, employment levels in the last ten
years have been cut from approximately 10,000 workers to 5,950
today. There were no major technological changes in this period
to account for such a huge job loss.

Work reorganisation, particularly multi-skilling, the imposition
of increased work functions, added responsibilities and speed-ups
have been used to make up for the smaller workforce and generate
increased profitability.

2. Increasing the hours of work

While the Australian Bureau of Statistics calculates average
hours worked by full-time workers in the manufacturing industry,
surprisingly and perhaps significantly, it does not publish such
figures for the steel industry.

<%6>The average wage during the ten-year period has been
calculated by the ABS to have increased by 84 percent, indicating
extremely high overtime levels in the industry.

The introduction of 12-hour shift systems, with heavy obligations
on workers such as in the Blast Furnace Team Work Agreement has
contributed to longer hours being worked.

Growing job insecurity also places pressure on steel workers to
work while the work is still around.

Increasing overtime reduces the cost of labour for BHP despite
overtime penalty rates, because with high overtime levels less
workers need to be employed overall.

But, BHP's drive for profits is insatiable. In December last year
a "confidential briefing" was given by the Manager of the
Port Kembla steelworks to the local State and Federal ALP
parliamentarians.

At this meeting the political representatives of the Illawarra
community were told that BHP's current steel profits of about $20
million dollars a month were inadequate and they would have to be
increased to $50 million a month!

None of the parliamentarians, with one honourable exception, have
informed their constituencies of this directive, choosing to
protect the confidentiality requirement of their political
master.

So much for representative democracy.

SHAREHOLDER VALUE RULES, O.K.

In 1997 there was a decisive change in the corporate and
financial direction of BHP which is of crucial significance to
steelworkers, miners and steel region communities.

The promotion of Anderson to Chief Executive Officer signalled a
new stage in the development of BHP as a multinational
corporation, particularly in regard to the distribution of
capital and profits within BHP and its approach to trade unions.

Anderson has pursued a classic shareholder value strategy of
disinvestment, selling off sideline businesses, shutting down
loss making divisions and shifting investment to high profit, low
cost, commodity producing regions.

Wall Street's mantra of core business basics is parroted by this
ex-Duke Energy apparachik. The stockmarket loves it.

He has increased the BHP share price, at the cost of thousands of
workers' jobs and the future of the Australian steel industry.

What is occurring is a massive redistribution of wealth as stock
values rise and are traded speculatively whilst poverty and
despair grow in the steel and coal regions.

This is a trend in capitalist globalisation, when from 1971 to
1991, the world's 500 largest multinationals increased their
revenues by 700 percent without increasing the number of workers
they employed globally.

BHP's job cuts are not the result of inefficiencies or loss
making. They are the result of a ruthless strategy to continually
drive up profits.

Over the past three years the rhetoric of shareholder value has
dominated BHP's senior management.

Initially, an ideology from the US emerging in the '80S,
shareholder value principles are being used to reshape BHP, a
corporation generating huge amounts of capital.

Previously this capital was allocated under an older capitalist
strategy of retaining and reinvestment. This retention of capital
provided the basis of corporate growth, through investment in
capital equipment.

Two problems emerged for BHP under this regime. One was the
growing complexity of managing an increasingly globalised and
diverse corporation. The other was intense international
competition.

Due to the huge amounts of capital tied up in steelmaking
processes and the over-production of steel internationally, steel
companies struggled to gain a five percent return on capital
invested.

Although BHP Steel is a profitable steel company, BHP's rate of
return on capital in mineral commodity resources, oil and natural
gas is around 15 percent.

Last year BHP's profits from oil increased by 471 per cent to
over $1.1 billion.

In the maximisation of profit and the distribution of massive
portions of that profit to senior managers and shareholders BHP
might compete with the other steel companies, but not with the
rate of return of BHP's mineral and oil divisions.

FAREWELL TO STAKEHOLDER UNIONISM

In the steel industry BHP has sought co-operation with the unions
during the last ten years.

A sophisticated industrial relations strategy was directed at
steelworkers to incorporate them into BHP's objectives, to have
them believe they are stakeholders in the company.

Consultative committees, management selected representatives,
quality circles, work teams, worker shareholding schemes and
"fact finding" overseas missions for union officials have
been utilised to bypass worker resistance against work
intensification and job loss.

The trading off working conditions and jobs for wage rises
increased the pressure on workers and ultimately did not save
jobs, although BHP propaganda attempted to link higher
productivity with improved wages and job security.

Ten years of "stakeholder unionism" has produced an
unmitigated disaster for rank and file steelworkers. After all
the sacrifices, the loss of jobs, the speed-ups, one worker doing
two and three jobs, there is now less security and more job
losses than ever before.

And where will it all end? What of the future?

Listen to Brad Mills, BHP Chief Strategic Officer who was quoted
as saying that BHP would end its involvement in steelmaking
"if we get to the point where we thought it would create more
value as an independent company ... the company is always looking
at ways to maximise value."

A militant alternative strategy is desperately needed to protect
the security of steelworkers, the future of the steel industry
and to create equitable development for the coal and steel
regions.

But we must begin with an understanding that there can be no co-
operation with greed and exploitation and that finally workers
have no stake in an unjust capitalist system that every day slips
deeper into crisis.

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In 1999 when BHP's steel profits increased by 53 per
cent its total steel sales only increased by 2.3 per cent
to 8.5 million tonnes.

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