Lesson in loyalty:
Lynch, Roberta & Bensman, David
-1 t#f k j "Any chance of cab fare back to our hotel ?" ..it ~t @ is the IMF's "seal of approval" which will help it come to terms with its private creditors. The rescheduling of its...
...Steel bought Marathon Oil for $6 billion and then delayed building the rail mill, Rostenkowski flew to Pittsburgh where company officials reaffirmed their commitment...
...The company paid for his time...
...Steel," Stazak told Chicago's sympathetic media...
...This opposition is in itself nothing new to the IMF which throughout its history has frequently triggered sharp controversies in third-world nations...
...And he vowed to force U.S...
...U.S...
...In the 1970s, he used to go through South Works gathering workers' signatures on petitions asking for import restrictions...
...Steel announced it was canceling plans to build a new rail mill at South Works in South Chicago on December 27, the company placed the blame on labor costs...
...Steel demanded as the price of the rail mill...
...They are looking to cut out the soft underbelly of the union and get us fighting among ourselves...
...Although more militant members denounced him as a sell-out, and the concessions as a betrayal of union principle and a threat to safety, Stazak carried the day in a referendum vote...
...Until that conglomerate pays off the huge debt it built up on its venture into the oil business, it will have to cut back its investments in steel, whatever the long-term cost to the U.S...
...The congressman's anger was more than matched by local public officials...
...If Illinois politicians want to do something constructive with their anger, they'll push for federal intervention in the steel industry before it goes down the drain...
...The wealthy classes are not the only vested interests which are exempt from making sacrifices in the IMF strategy...
...This is more than a story of corporate arrogance...
...When Stazak was elected president in 1982, he pushed hard to get local acceptance of the work rule concessions U.S...
...Nevertheless, the IMF has submitted Venezuela to lengthy negotiations in order to reach a formal agreement regarding the nation's future economic policies...
...Without the South Works rail mill, American railroads will increase their purchases of imported rails, which already comprise forty percent of the market...
...First, the state legislature repealed a sales tax on rails shipped from Illinois...
...Steel, Local 65's concessions, and its political Support, just weren't enough...
...In full-page ads in Chicago's daily newspaper, the giant conglomerate regretfully told how union refusal to change non-competitive work rules killed what was to have been America's most advanced facility for manufacturing rails But Chicagoans didn't buy it...
...The rescheduling of its debt will enable Venezuela to make its required payments to the private banks on time, something that Brazil and Argentina cannot hope to accomplish at the present...
...Steel spumed them all...
...Steel's move was greeted by angry denunciations from a solid phalanx of public officials...
...Some of the IMF's recommendations are more a reflection of the conservative thinking of private banks than part of a strategy for repaying loans...
...Steel came to Congress seeking tax relief...
...Thus the fund's proposals could set off conflict on many different fronts, and not just a few street riots as occurred in Brazil...
...Steel had claimed that it could not build the mill without substantial help from the city and state...
...Lusinchi, thanks to labor backing, won by an unexpectedly large percentage of votes which means that popular expectations are high...
...But at the same time, we have to have some ethics and some loyalty...
...Thus, for instance, the fund has called on Venezuela to implement a sales tax which conservafives in the U.S...
...Steel into an oil-based conglomerate with a steelmaking division...
...And Commissioner Mier refused to accept the scapegoating of the union: "There's no way in the world we could second-guess the union's decisions," he said, noting that the company "basically asked the people to vote to give up their j o b s . . . What was being asked of them was extraordinary...
...They're going to come back to Rostenkowski [for tax legislation...
...and elsewhere hold in such high regard...
...To top it off, incentive pay would be eliminated for most jobs, in violation of the industry's Basic Labor Agreement...
...Steel...
...And Rostenkowski's going to be an awful, awful quiet man for a long time...
...The recent public airing of the United States contribution to the IMF must now be complemented by a thorough examination of the policies that the fund is advocating and the interests which they represent...
...While IMF policies run the risk of undermining the transition to democracy in Brazil and Argentina, it would be particularly unforgivable if they destabilize Venezuela, South Amrica's only well-established democracy...
...Steel to install the water pollution equipment at its own exDense...
...Not surprisingly, Donald Stazak feels betrayed...
...The IMF's policies -- if accepted by recently elected Venezuelan President Jaime Lusinchi -- will provoke a popular outcry...
...Now management wanted the fight to hire outside contractors to do maintenance work, while 300-500 Local 65 craftsmen were eliminated...
...Do the United States and the other advanced Western nations which control the IMF really want to identify themselves with IMF policies that threaten to galvanize soi:ial tensions...
...At that point," the congressman recounts, [the Commonweal: 106 late Indiana Representative] "Adam Benjamin said to me, 'We'll go with the rail mill for Chicago now for sure.' I said to Adam, 'Have you got an understanding?' And he said, 'Absolutely.' " When U.S...
...This whole thing doesn't make sense...
...It's not because the rail market is saturated...
...24 February 1984: 107...
...Time after time, the company has come to us and said, 'We give you good salaries and good conditions, how can people be so disloyal?' I come back to them now and say, 'Now where is your loyalty...
...The Marathon Oil purchase made U.S...
...The politicians' support did not assuage local unionists' anger...
...Steel had put $91 million into renovating a big blast furnace...
...Congressman Gus Savage added his own condemnation: "U.S...
...Steel, didn't like being doublecrossed...
...We offered them a good deal," he said...
...If we had agreed to any, the consequences would have been so far-reaching, it would have destroyed our union, and others as well...
...Steel's decision not to build a technologically advanced rail mill in South Chicago symbolizes corporate America's flight from manufacturing...
...Steel would get one concession and go back for more, get one drop of blood and go back for another...
...And to take advantage of cheap electric rates on weekends and late at night, U.S...
...DAVID BENSMAN & ROBERTA LYNCH (David Bensman and Roberta Lynch are writing a book about the decline of the steel industry in Chicago's Southeast side...
...South Chicago's tragedy is that South Works is owned by U.S...
...U.S.Steel's cancellation of the rail mill project was accompanied by an equally disturbing announcement: most of Chicago's great South Works will also be closed...
...The proposals smacked of union-busting but we responded to them...
...Although the media persist in calling the mill an obsolete giant, just last year U.S...
...What the hell are you doing?' They shake their head and say, 'It's above us.' " "Blaming the union is a terrible insult to all who have tried so hard to meet the original demands of U.S...
...Steel insisted on the right to work employees ten hours per day and on weekends without paying premium rates...
...Such strife in the case of Venezuela, however, has particular relevance...
...Such a measure, however, would be unnecessary if an income tax reform -- as advocated by the nation's main middle-of-thetoad labor confederations -- were implemented in which loopholes were tightened up and the virtually untaxed upperincome groups forced to pay a greater share...
...In November 1983, the company demanded a new set of give-backs...
...Venezuela's sound position should allow it to obtain the relatively modest loans it is soliciting from the IMF practically with no strings attached...
...Then in the spring of 1983, Stazak recalls, "Roderick told me, 'Don, if you can get anything done with Neil Hartigan as far as environmental relief, do it by all means.' And I got a call from Bill Miller, the vice president of labor relations, and he asked me to come to Pittsburgh so I went there and I met him and his lawyer, and they said to me, 'Don, if you can get this thing done, three months after you get it done, we'll start building our rail mill.' " But for U.S...
...Ever since, government officials have been falling all over themselves to give U.S.Steel what it said it needed...
...Not since the days of Theodore Roosevelt, when U.S...
...Hartigan's proposal was topped by the city of Chicago's Commissioner of Economic Development, Robert Mier, who offered a $37 million low-interest loan...
...IMF recommendations for Venezuela come down hard on diverse sectors of the population which have direct input into the nation's highly participativ.e democratic institutions...
...steel &investments LESSON IN LOYALTY CHICAGOANS lfiEEL BETRAYED W HEN U.S...
...economy, or to the beleaguered steelworkers of South Chicago...
...The resultant " seal of approval" will serve as a green light for the four-hundred-and-fifty-odd commercial banks which are rescheduling the nation's foreign debt...
...The reason is simple...
...I realize they're in the business to make money...
...Don Stazak, president of United Steelworkers Local 65, was long known as a "company man...
...Then, Illinois Attorney General Neil Hartigan proposed a $33 million subsidy to defray the corporation's costs of meeting court-ordered expenditures for water pollution equipment...
...marines were sent overseas to collect debts, have the state and the private sector been so inseparably identified...
...STEVE ELLNER (Steve Ellner is an associate professor in the department of economics at the Universidad de Oriente, Puerto La Cruz, Venezuela...
...It's not because South Works is inefficient...
...Its recent turnaround has left him angry...
...Efficient basic oxygen furnaces, a good plate mill, and even a modern continuous caster will also go down...
...Attorney General Hartigan, who had grabbed the limelight in the effort to help U.S...
...Thus Venezuela's experience in solving its debt problems is similar to what other nations will be passing through once they begin to achieve economic recovery...
...Last December 27, U.S...
...Back in 1982, U.S...
...That commitment went back to 1981, Rostenkowski explained, when U.S...
...It may be asked, for instance, why the IMF does not question Venezuela's acquisition of the costly F-16 bombers which will allow the nation's air force to boast of having the most sophisticated planes anywhere in the continent (see "F-16s for Caracas" in Commonweal, March 26, 1982...
...And why should the IMF act as a front for the commercial banks, and thus become a whipping boy of nationalist sentiment south of the border...
...Dan Rostenkowski, Chair of the House Ways and Means Committee, got front-page headlines when he charged that the company had reneged on a "firm commitment" to build the mill...
...leasing provisions in ! 981 and 1982 gave the company "tons of money...
Vol. 111 • February 1984 • No. 4
