Letter from Brussels

Fighting for Jobs
Julie Robert

John David is 25. Two weeks ago, in Strasbourg (France), he lost his right eye, hit by a rubber bullet shot by a policeman. Who is David, and what was he doing in Strasbourg?

John David comes from Flemalle, a little town in the suburbs of Liege, in Belgium. He works as a temporary worker in an ArcelorMittal factory. On 6th February, along with 1500 of his colleagues, he went to Strasbourg to attend a demonstration in front of the European Parliament. Workers coming from the French factory of Florange and from the Luxembourgish factory of Dudelange were also there. The Arcelor Mittal group has recently announced its intent to close both the sites of Liege and Florange, while it is planning to reduce the number of workers in Dudelange. So, on 6 February, trade unions had appealed for a massive demonstration in front of the European Parliament as a workers' delegation was meeting some MEPs (Member of European Parliament), the president of the same Parliament and the European Commissioner responsible for industry. On that very day, John David was fighting for his job, for the jobs of thousands of workers, for the means of subsistence of thousands of French, Luxembourgish and Belgian families. In response, he received a bullet... The repression of workers' movements in Europe has become daily news in newspapers and newscasts. But that is another story and it could and will probably be the topic of a future letter from Brussels.

The steel industry is part of Liege's history. It was set up here in the beginning of the 19th century, as it was also has in Charleroi. Liege is situated in the valley of the Meuse River, near Belgium's eastern borders with Germany and the Netherlands. It is the economic capital of Wallonia, the French-speaking region of Belgium. Liege & Charleroi were the industrial backbone of the region—the sillon industriel or industrial belt. But as heavy industry is no longer preponderant in Belgium's economy, the term has become obsolete. However, referring to the sillon industriel in Wallonia takes people back to an era of prosperity and economic development which ended in the beginning of the 1980s.

In 1823, John Cockerill built the first blast furnace in Liege. At that time, Steel industry existed in other parts of the country. He was the first to start producing coke in Belgium. Cockerill was an English loom manufacturer who decided to produce the metal that he needed. This is how the steel industry started in Liege, and thanks to John Cockerill's business skills, it flourished. In 1850, the plant at Liege was the biggest in the world, and Belgium was the second largest manufacturer of steel, just behind Great Britain. The metallurgy industry has, over the years, attracted thousands of immigrants coming from various European countries and also from Turkey and Morocco. An important turning point occurred in the beginning of the 1980s, when most of the steel activities in Liege and in Charleroi had to be consolidated because of a deep industrial crisis across Europe. All the facilities came under the umbrella of a single company, Cockerill Sambre. This group was in the hands of the Walloon Region, which owned around 80% of it. In 1998, the Walloon Region sold a majority stake in the company and its subsidiaries to the French group Usinor. Usinor held 78% of the company and the rest still belonged to the Walloon Region. In 2001, Usinor merged with several companies to become Arcelor. Since then, the life of the site in Liege has been a long series of ups and downs. As soon as Arcelor announced its intent to stop the hot process in January 2003, it meant a loss of about 2700 industrial jobs (direct and indirect). This was a hard blow for the people of the area. Liege has an unemployment rate of more than 20%, which is nearly the highest in Belgium. Out of the 470,000 persons between 20 and 64 years of age (defined as the working-age population), nearly 80,000 are unemployed and in search of a job. In the end, and after long and arduous negotiations with the trade unions, the furnaces were not permanently closed, but only ‘switched off’. A promise was made to the workers that they will not lose their jobs and alternative employment will be arranged either in the company or in one of the subsidiaries. But it had been a long struggle for the trade unions, which unfortunately could not get anything more and most importantly the operation of all the plant facilities and capacities could not be ensured. In Belgium, as in a lot of European countries today, the trade unions are not forces on which workers can count on. All of them have links with the ruling parties and therefore, they dare not break these links to get the best for their members. The most that trade unions do today is to choose the 'least bad' option without hurting the interest of any politician or political party. They don't even fight the repression of their movement anymore, surrendering to the police each time they are sent to put down a demonstration or a gathering.

Anyway, it's on this Arcelor group that Mittal Steel made an offer to buy in 2006 and this is how Cockerill Sambre became Arcelor Mittal. Just before the conclusion of the agreement, Mittal met the Belgian governments and undertook to consolidate employment during 18 months and to honour all the promises made by Arcelor. They also promised to re-activate a blast furnace which Arcelor had planned to suspend earlier. But as one can understand, things did not go that way. Negotiations after negotiations, the Mittal group finally never re-activated that blast furnace.

Arcelor Mittal is the world's leading steel company. It has operations in more than 60 countries, steelmaking facilities in more than 20 countries, and is the leader in all the main steel markets. In 2012, it had revenues of US$ 84.2 billion and crude steel production of 88.2 million tonnes, which represents around 6% of world steel output. Around 35% of its steel is produced in the Americas, 47% in Europe and 18% in other regions, including Kazakhstan, South Africa and Ukraine. Arcelor Mittal has a leading market position and market share in North and South America, Western Europe, Eastern Europe, the Commonwealth of Independent States, and Africa. But being the world's leading company means having a lot of shareholders, who invest in the company so long as they receive dividends in return. So, it is to satisfy them that on 23 September 2011, Arcelor Mittal announced a restructuring programme for its European operations as these were less profitable. In fact, its main strategy is to increase profit margin by reducing costs, in order to please their shareholders. Its aim is to save one billion euros. And how is it going to do that? One does not have to be a soothsayer to guess right. Arcelor Mittal is going to saturate some of its blast furnaces which will work at full capacity instead of running the 25 european blast furnaces. The factories that produce steel at low cost are the one situated near the sea or the ocean. And those are the ones that are going to work continuously in the future. This decision has consequences for most the blast furnaces of Europe, which are situated far inland. Seven out of the eleven existing plants will be shut down. Arcelor Mittal is planning to close down sites in France, in Belgium, in Germany and also in the Czech Republic and in Poland.

This announcement has hit the Belgian people hard. The reasons for their anger are two fold. The main reason is, of course, the redundancies. Also one could talk about the promises made when Mittal Steel took over Arcelor. But the second reason of their anger is that, in spite of all the 'presents' Mittal Steel received from the governments, from the country, that is from the Belgian people, it still decided to stop the steel plant in Liege. Mittal has received two kinds of presents; notional interests and CO2 allowances. The notional interests are a Belgian fiscal measure allowing certain multinational companies to avoid paying the taxes otherwise paid by the small and medium enterprises. In 2009, for a net profit of 1,288 billion euros, Arcelor Mittal only paid 496 euros tax instead of the 438 million euros that it would have paid had it been taxed at the normal rate of 34%. And in 2010, the company paid no tax on a net profit of 1,394 billion euros. The drop in earnings for the state is serious, amounting to 912,301,303 euros in only two years. This sum of money is equivalent to the sum of money Arcelor Mittal would have paid if the group had been taxed at the legal rate of 34%. So welcoming Mittal has cost a lot to the state, and consequently, to the people. The second type of'present' Mittal received here in Belgium is its CO2 allowances. The mechanism is rather complex, but to put it simply, for the last three years, Arcelor Mittal has received from the Belgian authorities 15.7 millions of allocations of CO2 tons for Belgium. Those CO2 tons are sold in the market at an average price of 15 euros and so Arcelor Mittal must have grossed a minimum of 236 millions of euros from the sale. This enormous amount of money was given to Arcelor Mittal without any obligation to protect employment.

Let's now understand the main reason why John David was in Strasbourg a few weeks ago: the redundancies. There are different categories of employments [all 2010 figures] in Arcelor Mittal. First, there are the contractual workers and employees on the rolls of Arcelor Mittal who are paid directly by the enterprise. These are what people call 'direct jobs' and there are 2,648 of them. Then, there are 'indirect jobs', which can be conversion contracts or sub-contracting maintenance jobs. Those 'indirect jobs' also include the enterprises working directly on contract with Arcelor Mittal to transform the steel in semi-finished products stage to finished products The figure of the 'indirect jobs' includes the Societe Nationale des Chemins de fer beiges (Belgian railways) workers who work exclusively for the steel industry. There are around 5,000 indirect jobs, which makes approximately 10,000 jobs depending on the steel industry in the region of Liege if one includes shops and service establishments in the community that are dependent on the spending of the employees of Arcelor Mittal (bars, shops, restaurants etc.). As mentioned above, Liege is an area with the highest number of unemployed people in Belgium, with around 80,000 persons out of work and the shrinking operations of the steel plant at Liege adds to the problem. So that day, John David went to Strasbourg, to protest and vent his anger and to show the authorities that he won't let Arcelor Mittal do what it wants. John David was vulnerable since he has a family to feed, a rent to pay and being a temporary worker he was not entitled to any compensation on the closure of the plant. As mentioned above, while the workers had gathered in front of the European Parliament, a delegation of trade unionists was inside to meet, among others, Martin Schulz, the president of the Parliament. But hearing what was going on outside the building, they just left the negotiating table. "We cannot consider talks with the authorities if the same authorities use rubber bullets and batons against our colleagues" said one of them. The negotiations between the trade unions and European Union, as on that date, are at a standstill and Martin Schulz also confessed the European Union's powerlessness in front of the giant Arcelor Mittal. But one wonders if it's such a bad thing since it has been a long time since the trade unions did get anything for their members. As usual, it'll be the governments and big capital that will have the last word. Different ministers met on 12 February in Brussels. They had asked for the presence of Lakshmi Mittal. They wanted to ask him about his European strategy for the steel industry but Lakshmi Mittal didn't show up. So this time, it seems that even the governments will not have their voice heard. Europe had asked the Arcelor Mittal group to suspend the closures of factories, but they turned the order down saying 'the economic situation in Europe is extremely fragile resulting in the decreasing in the steel demand. Not taking this measure of closures will weaken the company in Europe'... and so the company will make less profit, and its shareholders will be unhappy and Arcelor Mittal will lose money. What does it care of the people, of all those families, of all the John Davids?

In June, the European ministers will present a plan for the steel industry and till then Arcelor Mittal has committed itself not to do no more restructuring in its European factories. The group also announced that it was going to invest more than 140 millions of euros in the activities still operational in Liege. But one knows how Mittal keeps promises - remember the one made in 2006...

Talking about what is happening in Liege, one could also talk of all the jobs lost these last few months in Belgium. Because it's not only the story of the steel industry, it's not only the story of one capitalist group; rather it's the story of the world's economy and big capital's exclusive quest for maximum profit. The destruction of livelihood does not matter to the faceless agents of big capital. Since October last year, numerous international companies have announced cuts in their Belgian subsidiaries. Hewlett Packard announced its intent to reduce 265 jobs. A few days later, Alcatel Lucent announced the reduction of 290 jobs. Then came a big blow; 4,300 direct jobs and more or less 6,000 indirect jobs were going to be cut by Ford in Belgium. The same day, Dow Chemical announced the closure pure and simple of its subsidiary leading to the loss of 106 jobs. To these figures, one can add: 601 jobs reduced by Duferco and NLKM, 300 by Photo Hall, 300 by Volvo and 12 by Coca-Cola. And after Arcelor Mittal's decision of October 2011 to shut down the hot process in Liege, the crowning piece came in January 2013 with its notification of the closing down of the cold process.

Of course, Belgium is not alone in these times of hardship. The situation is quite the same in a lot of European countries, and even worse in some of them—Greece, Spain and Portugal. But isn't it people’s role, as concerned citizens, to take to the streets to tell the elected representatives that they don't want them to be in the pay of big capital, that is not for that what voters elected them in the polls? John David is the living proof that the authorities are afraid of mass actions in the streets. It will be pertinent to point out that in Belgium the security forces appointed for repression of social movements are the only public service spared by the budget cuts of the federal government.

Frontier
Vol. 45, No. 45, May 19-25, 2013

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