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Friday, April 19, 2024

 

China Calls Accusations “Untenable” in Response to US Shipbuilding Inquiry

Chinese shipbuilding
China responded to the U.S. allegations over its shipbuilding practices (CSSC file photo)

PUBLISHED APR 18, 2024 3:22 PM BY THE MARITIME EXECUTIVE

 

 

Chinese officials and the state-run media continued the strong response denouncing the U.S.’s announcement of a trade investigation into the shipbuilding sector and efforts to triple the tariffs on steel. Chinese media writes the U.S. administration is using an “old playbook of unilateralism and protectionism,” saying it will fail to reshore manufacturing and result in a more expensive supply chain.

China’s Commerce Ministry issued a series of statements responding to the U.S. announcements and said regarding the steel tariffs that, “China has urged the U.S. to confront its internal challenges, while also demanding the immediate removal of imposed tariffs.” They responded by accusing the United States of abusing the Section 301 tariff review while saying the World Trade Organization has ruled the U.S. measures violate global trade rules.

Addressing the application for the review of the maritime, logistics, and shipbuilding industries filed by five U.S. unions in March 2024 with the U.S. Trade Representative they asserted it “lacks factual basis and goes against economic common sense.” They are citing China’s efforts since the 1980s to build the shipbuilding industry saying that their success is the result of enterprises’ technological innovation and active participation in market competition.

“Multiple U.S. research reports show that the U.S. shipbuilding industry has lost its competitive advantage many years ago due to over-protection,” the Ministry of Commerce spokesperson said. “The United States provides hundreds of billions of dollars in discriminatory subsidies to its own industries, but accuses China of adopting so-called ‘non-market practices’.”

China is calling for the United States to “return to the rules-based multilateral trading system,” while also referencing the “domestic political needs” ahead of the upcoming U.S. presidential elections. Media reports in China are saying supporting labor unions is critical in a U.S. election year.

They are saying the U.S.’s actions would have a “minimal impact on Chinese shipyards.” They said there has never been competition between the U.S. and Chinese shipbuilders, noting that for 14 consecutive years, China has completed the greatest number of ships worldwide. Furthermore, they highlight that Chinese shipbuilders now account for 50 percent of the yearly global orders. 

The U.S. Trade Representative is set to schedule hearings and solicit comments promising a thorough review of the filing made by the U.S. unions. China said it would “pay close attention to the progress of the investigation and will take all necessary measures to resolutely defend its rights and interests.”


US to Investigate China's Shipbuilding as Biden Calls for New Steel Tariffs

Chinese shipbuilding
China and CSSC have emerged as the world's leading shipbuilders (CSSC)

PUBLISHED APR 17, 2024 12:41 PM BY THE MARITIME EXECUTIVE


President Joe Biden and the U.S. Trade Representative confirmed today that they are initiating an investigation into China’s shipbuilding practices. News of the investigation comes as President Biden and the White House will tell steelworkers that they are also calling for a tripling of tariffs on Chinese steel and aluminum. He is also promising to block efforts by China and others to circumvent U.S. restrictions by importing products through Mexico.

The White House said the administration recognizes the growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition. While highlighting that the U.S. trade deficit with China is the lowest it has been in a decade, the administration is also accusing China of unfair competition saying China is undercutting U.S. products with artificially lower-priced alternatives. They cite the critical nature of steel in U.S. commercial and naval shipbuilding calling steel the backbone of the American economy. 

The concerns over China subsidies and state control of the shipbuilding industry were outlined in a petition to the U.S. Trade Representative from five labor unions. Filed in March, the unions formally requested an investigation into Chinese acts, policies, and practices in the maritime, logistics, and shipbuilding sectors.

“The petition presents serious and concerning allegations of [China’s] longstanding efforts to dominate the maritime, logistics, and shipbuilding sectors, cataloging the PRC’s use of unfair, non-market policies and practices to achieve those goals,” said U.S. Trade Representative Ambassador Katherine Tai. The announcement marks the start of a process of comments and hearings into China’s shipbuilding programs and could see tariffs imposed on Chinese-built ships calling at U.S. ports.

Administration officials are saying that China accounts for more than half the world’s steel exports. They said the Chinese have created overcapacity with non-market investments in the steel and aluminum industries.

“The steel and aluminum industries face a significant challenge from Chinese exports which are among the most emissions-intensive products in the world,” the White House wrote in its briefing document. It accuses China of “distorting the global shipbuilding market and eroding competition.”

China’s commerce ministry responded immediately to the accusations saying the initiative was “full of false accusations, misinterpreting normal trade and investment activities.” They repeated the Chinese position that the U.S. administration is playing the “China card” for its political aspirations. 

The White House cites over 30 anti-dumping and countervailing duties on steel-related products already imposed by the U.S. Department of Commerce. President Biden said he was not seeking a trade war, but said steps would be taken against countries and importers that flood the market with cheap products.

President Biden said they would also be working with Mexico to jointly prevent China and other countries from evasion of tariffs on steel and aluminum by importing products into the United States from Mexico. 


Biden – and steelmakers – promise US Steel

will stay American


Reuters | April 17, 2024 | 

Credit: US Steel

US Steel and Japanese buyer Nippon Steel said the Pittsburgh-based firm will remain an “iconic American company” even after a planned $14.9 billion takeover, echoing President Joe Biden’s promise to local steelworkers.


The two steel giants responded hours after Biden on Wednesday pledged that US Steel would remain a “totally American company,” repeating his opposition to the deal.

“And that’s going to happen, I promise you,” Biden told the supportive crowd during an event in Pittsburgh.

US Steel Corp has agreed to be bought by Nippon Steel for $14.9 billion, but the deal has been described as being on life support since the Democratic president announced his opposition last month.

“The partnership between US Steel and Nippon Steel is the right combination to ensure that US Steel remains an iconic American company for generations to come,” the steelmakers said in a joint statement.

“Its iconic name will be unchanged, and its products will remain mined, melted and made in America,” the statement said, adding that jobs and plants would be protected.

The partnership would also strengthen the US steel industry’s resilience against threats from China and support the “crucial” US-Japan alliance, the companies said.

Senators raise concerns over Nippon Steel’s China ties amid US Steel takeover bid

United States Steel shares closed down 2.9% at $39.13 on Wednesday. Nippon Steel shares were trading up 1.05% at 3,468 yen on Thursday morning in Tokyo.

Biden was in Pittsburgh ahead of November’s presidential election, and he used a visit to the headquarters of the United Steelworkers union to push for higher tariffs on Chinese metal imports and new investigations into their trade practices.

A senior administration official briefing reporters ahead of that announcement declined to say whether Biden would use the levers of government to block the deal from going through.

“Nothing new to add,” said the official, who declined to be named.

“Let’s keep US Steel in America,” a woman among the steelworkers shouted to Biden during a meet-and-greet.

“Guaranteed,” Biden replied.

(By Steve Holland, Costas Pitas, Mariko Katsumura, Susan Heavey and Trevor Hunnicutt; Editing by Caitlin Webber, Chang-Ran Kim and Tom Hogue)

Thursday, April 18, 2024

China accuses US of hypocrisy over Biden’s ‘xenophobic’ claims

AFP Published April 18, 2024 
US President Joe Biden delivers remarks at United Steelworkers headquarters in Pittsburgh, Pennsylvania on April 17. — Reuters

Beijing on Thursday accused the United States of hypocrisy in response to accusations by President Joe Biden that China is “xenophobic” and “cheating” on trade.

“I would like to ask him: are you talking about China or the US itself?” foreign ministry spokesman Lin Jian said when asked about the comments.

In a speech on Wednesday to union members, Biden called for a hike in steel tariffs on China, accusing it of cheating as he courted blue-collar voters on an election campaign trip to the battleground state of Pennsylvania.

“They’re not competing, they’re cheating. They’re cheating and we’ve seen the damage here in America,” the 81-year-old Biden said to cheers at the headquarters of the United Steelworkers union in Pittsburgh.

The Democrat said Chinese steel companies “don’t need to worry about making a profit because the Chinese government is subsidising them so heavily”.

Biden said he had called for the US Trade Representative to triple the tariff rates for Chinese steel and aluminium if Beijing was confirmed to be using anti-competitive practices.

“They’re xenophobic,” he added. “They’ve got real problems. I’m not looking for a fight with China, I’m looking for competition — but fair competition.”




Beijing and Washington have clashed in recent years on flashpoint issues from technology and trade to human rights as well as over the self-ruled island of Taiwan and the disputed South China Sea.

Relations have stabilised somewhat since Presidents Biden and Xi Jinping met in San Francisco in November for talks that both sides described as a qualified success.

The two held a follow-up telephone call this month, where they clashed over US trade restrictions on technology and on Taiwan, which Beijing claims.

But they also agreed that two high-level US officials would soon travel to China — US Treasury Secretary Janet Yellen visited last week, with top diplomat Antony Blinken due in Beijing soon.

The US also this week announced a probe into China’s trade practices in the shipbuilding, maritime and logistics sectors.

China’s commerce ministry hit back, saying the probe was “full of false accusations, misinterpreting normal trade and investment activities as harming US national security and corporate interests, and blaming China for its own industrial problems”.


US to Investigate China's Shipbuilding as Biden Calls for New Steel Tariffs

Chinese shipbuilding
China and CSSC have emerged as the world's leading shipbuilders (CSSC)

PUBLISHED APR 17, 2024 12:41 PM BY THE MARITIME EXECUTIVE

 

President Joe Biden and the U.S. Trade Representative confirmed today that they are initiating an investigation into China’s shipbuilding practices. News of the investigation comes as President Biden and the White House will tell steelworkers that they are also calling for a tripling of tariffs on Chinese steel and aluminum. He is also promising to block efforts by China and others to circumvent U.S. restrictions by importing products through Mexico.

The White House said the administration recognizes the growing concerns that unfair Chinese trade practices, including flooding the market with below-market-cost steel, are distorting the global shipbuilding market and eroding competition. While highlighting that the U.S. trade deficit with China is the lowest it has been in a decade, the administration is also accusing China of unfair competition saying China is undercutting U.S. products with artificially lower-priced alternatives. They cite the critical nature of steel in U.S. commercial and naval shipbuilding calling steel the backbone of the American economy. 

The concerns over China subsidies and state control of the shipbuilding industry were outlined in a petition to the U.S. Trade Representative from five labor unions. Filed in March, the unions formally requested an investigation into Chinese acts, policies, and practices in the maritime, logistics, and shipbuilding sectors.

“The petition presents serious and concerning allegations of [China’s] longstanding efforts to dominate the maritime, logistics, and shipbuilding sectors, cataloging the PRC’s use of unfair, non-market policies and practices to achieve those goals,” said U.S. Trade Representative Ambassador Katherine Tai. The announcement marks the start of a process of comments and hearings into China’s shipbuilding programs and could see tariffs imposed on Chinese-built ships calling at U.S. ports.

Administration officials are saying that China accounts for more than half the world’s steel exports. They said the Chinese have created overcapacity with non-market investments in the steel and aluminum industries.

“The steel and aluminum industries face a significant challenge from Chinese exports which are among the most emissions-intensive products in the world,” the White House wrote in its briefing document. It accuses China of “distorting the global shipbuilding market and eroding competition.”

China’s commerce ministry responded immediately to the accusations saying the initiative was “full of false accusations, misinterpreting normal trade and investment activities.” They repeated the Chinese position that the U.S. administration is playing the “China card” for its political aspirations. 

The White House cites over 30 anti-dumping and countervailing duties on steel-related products already imposed by the U.S. Department of Commerce. President Biden said he was not seeking a trade war, but said steps would be taken against countries and importers that flood the market with cheap products.

President Biden said they would also be working with Mexico to jointly prevent China and other countries from evasion of tariffs on steel and aluminum by importing products into the United States from Mexico. 


Monday, April 15, 2024

 

UK's Shipyards Look for New Ways to Plug Workforce Gaps

Steel-cutting for the Type 31 frigate at Babcock's Rosyth shipyard (Babcock)
Steel-cutting for the Type 31 frigate at Babcock's Rosyth shipyard (Babcock)

PUBLISHED APR 12, 2024 11:07 PM BY THE MARITIME EXECUTIVE

 


The U.S. has a well-publicized challenge in finding and retaining enough qualified shipyard workers, but it isn't the only nation with a shortage of skilled labor. The UK's top defense shipbuilders are trying new ways to solve persistent gaps between the workforce they have and the workforce they need, like introducing top-notch automation and creating new entry-level opportunities. 

At BAE Systems' yard on the Clyde, there are currently about 200 vacancies, and managers need to staff up to support a new eight-ship frigate contract for the Royal Navy. In years past, UK yards could raid the European labor market for qualified welders when needed, managing director Simon Lister told Glasgow Times - but that is no longer an option. BAE is investing in training instead, as well as a brand new highly-automated panel line. 

“The availability of steelworkers has been a challenge for all shipbuilders in the UK," Lister said. 

BAE has its own shipbuilding academy and a growing apprentice program, which will expand to about 1,000 personnel by next year. The yard and its competitors emphasize that they aren't just looking for welders, but also for people with all kinds of skills, like programming, finance and project management. 

Babcock's Rosyth shipyard has found its own way to help resolve persistent manning shortages. It has a robust apprenticeship pipeline, but it has also realized that not every shipyard worker has to be a high-skill employee from the start. Many support tasks can be performed by personnel with a relatively basic skillset. Babcock has started hiring ordinary people who can pick up some of these less-skilled tasks and relieve pressure on the high-skill union workforce, the yard told Defence Connect. The new Production Support Operative (PSO) hiring pipeline selects for people with a good attitude, even if they do not have relevant qualifications, and provides them with enough training to support experienced workers. Down the road, they may have an opportunity to apply for an apprenticeship. 

For its part, the UK government has completed a study on shipbuilding skills and is standing up a new working group to advocate for the industry's workforce needs. Public perception is one of the key challenges, the study found: in the UK, it is often viewed as an outdated industry in decline, and prospective employees may not know of recent investments and improvements.

Monday, April 01, 2024

Nippon Steel emphasises its ‘deep roots’ in the US as it pursues US Steel deal


Reuters | March 31, 2024 | 

 
US Steel’s Gary Works in Gary, Indiana, the largest integrated mill in North America. (Archival image in the public domain from the US National Archives and Records Administration).

Nippon Steel intends to pursue its proposed acquisition of US Steel and wants its “deep roots” in the United States to be recognised, its new president said – remarks that come after US President Joe Biden expressed opposition to the deal.


The Japanese firm has agreed to buy US Steel for roughly $15 billion but the deal faces an uphill battle for approval in a US election year.

The White House sees steel as critical to national security and Biden said last month that US Steel should remain domestically owned. His opponent in the November presidential vote, former President Donald Trump, has promised to block the deal if he is re-elected.

It’s not clear if Biden plans to use any US regulatory authorities to scuttle the deal.

“What US politicians are concerned about is jobs and whether US Steel can develop as an iconic US company in the US,” Tadashi Imai told reporters last week before he took on his new role on Monday.

“I am convinced that we’re the most useful partner to help US Steel grow in the United States,” he added.

Imai, 60, became president in a management reshuffle intended to lower the average age of top executives but in a break with tradition, its charismatic former president Eiji Hashimoto has taken on the title of chief executive and will be in charge of shepherding the acquisition.

The proposed deal has drawn strong criticism from some lawmakers and the United Steelworkers (USW) labour union which is worried about potential job losses.

Japan’s largest steelmaker has pledged no job cuts as a result of the deal, to honour all agreements between the union and U.S. Steel as well as to move its own US headquarters to Pittsburgh where US Steel is based.

Imai said he was hopeful that Nippon Steel would come to be seen as a firm with deep roots in the US, noting that it has had a presence there since the 1980s and has 4,000 employees in the country, some of whom are also members of the USW.

“The most important thing and the only thing that we can do is to talk to the USW in good faith,” about investment plans and measures to raise the competitiveness of US Steel, he said.

Imai said that the acquisition would give US Steel access to Nippon Steel’s advanced technologies such as electromagnetic steel sheet, adding that the Japanese firm has some 2,000 steel patents in North America while US steelmakers in general had roughly 200 each.

At home, Imai’s main focus will be decarbonisation, he said, adding that the company will soon need to make investment decisions on whether to invest in new electric furnaces at two sites – the Kyushu Works Yawata site in southern Japan and Setouchi Works Hirohata site in western Japan.

The company must decide on the projects either this financial year or the next one, Imai said.

“It will be a huge investment … but the time for a key decision is approaching on the technical certainty and predictability of the return on investment.”

(Reporting by Yuka Obayashi and Ritsuko Shimizu; Writing by Katya Golubkova; Editing by Edwina Gibbs).



Tuesday, March 26, 2024

Aluminum company says preferred site for new smelter is a region of Kentucky hit hard by job losses

BRUCE SCHREINER
Mon, March 25, 2024 

Kentucky Gov. Andy Beshear responds to a question during an interview, Dec. 19, 2023, in Frankfort, Ky. An aluminum company has singled out northeastern Kentucky as its preferred site for a new aluminum smelter that would bring about 1,000 permanent jobs to an Appalachian region hard hit by the loss of coal and steel production, Gov. Beshear said Monday, March 25, 2024.
 (AP Photo/Timothy D. Easley, File)More


FRANKFORT, Ky. (AP) — An aluminum company has singled out northeastern Kentucky as its preferred site for a new aluminum smelter that would bring about 1,000 permanent jobs to an Appalachian region hard hit by the loss of coal and steel production, Gov. Andy Beshear said Monday.

Plans by Century Aluminum Co. to build a smelter that produces dramatically lower emissions will be supported by $500 million from the U.S. Department of Energy. The project has the potential to become the largest investment on record in eastern Kentucky, Beshear said.

“There’s still a lot of steps that we need to take to make this a reality," the governor said at a news conference. "But this is the first important step.”

The governor is hoping that a state incentives package will help close the deal. He predicted that state lawmakers will provide “the tools that we need” in the closing days of their legislative session.

The company's president and CEO, Jesse Gary, did not attend the news conference but said in a statement that a “myriad of steps" must still be resolved and that multiple locations are still being evaluated, but he pointed to northeastern Kentucky as the preferred location. Issues still pending include development costs for sites under consideration, utility costs, workforce and incentives, he said.

Century Aluminum, headquartered in Chicago, already has a significant presence in the Bluegrass State with two aluminum smelters in western Kentucky.

Gary referred to the announcement Monday as "another step in our continued long-standing relationship with the state, and we look forward to the opportunity to help be a part of growing commerce in eastern Kentucky, an outcome that is very attractive to Century Aluminum.”

Century says it is the largest producer of primary aluminum in the United States and also operates production facilities in Iceland, the Netherlands and Jamaica.

Northeastern Kentucky was hit hard several years ago when a steel mill that had been an economic bedrock for generations shut down. The broader eastern Kentucky region has struggled from the sharp drop in coal jobs over the last decade amid shrinking demand for coal.

The region had its hopes of landing a massive aluminum plant dashed a few years ago. Another aluminum company planned to build a mill near Ashland in northeastern Kentucky but the project — which was pushed by Beshear's predecessor, former Republican Gov. Matt Bevin — never came to fruition as the company struggled to line up sufficient financing.

Now Beshear, who unseated Bevin in 2019, is trying to deliver on what he says would be a game-changing project for the region and continue the state's record-setting pace of economic development growth during the Democrat's tenure. Beshear, seen as a rising star in his party, won reelection to a second term last year in what otherwise has become a Republican-dominated state.

The region's renewed prospect of becoming home to an aluminum smelter offers an “incredible opportunity” for an area that's “been through the ringer,” said Boyd County Judge-Executive Eric Chaney, who was among several area leaders who attended the news conference with Beshear.

“We're going to work hard to help get this over the finish line,” Chaney said later in a phone interview. “This is a great opportunity for northeast Kentucky and the entire state.”

The project would create about 5,500 construction jobs and then about 1,000 permanent union jobs, the governor said. The new smelter would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter due to its state-of-the-art, energy efficient design and use of carbon-free energy, he said.

The Department of Energy, in a separate news release, said the new plant would be the cleanest and most efficient aluminum smelter in the world.

Aluminum produced by the new plant will support national defense, electric vehicles, semiconductors, building and construction and green energy applications, Beshear said.

While many decisions remain, Beshear pointed to the importance of $500 million in federal support for the project. The funding is provided by DOE’s Industrial Demonstrations Program, and the governor thanked President Joe Biden, Energy Secretary Jennifer Granholm and others.

“While we all recognize that it’s not a done deal and there is more work to come, a $500 million grant, if it is built in this region, is a pretty good place to start,” Beshear said.

Last week, Beshear announced plans by Rye Development to build a $1.3 billion pumped storage hydropower facility on a former coal mine site in Bell County in southeastern Kentucky. The project — also backed by a federal grant — will create about 1,500 construction jobs, 30 operations jobs and enough energy to power nearly 67,000 homes each year




Biden’s Big Bet on Aluminum

Matthew Zeitlin
Mon, March 25, 2024 


Famously energy intensive and dominated by Chinese smelters, aluminum sits at a curious nexus of climate and industrial policy.

The famously lightweight metal is something like the base metal of green industry. It’s used in the frames for solar panels, the control equipment for wind turbines, and in the hardware of electricity distribution. It’s lighter than steel, which makes it appealing to electric car manufacturers, like Tesla, who want to expand the range of their vehicles. Aluminum is often found in the batteries themselves, as well, specifically their enclosures. Overall, aluminum demand is projected to rise by some 40% by the end of the decade.

Like other industrial metals (namely steel), the U.S. aluminum industry has been a poster child of deindustrialization. Employment in the aluminum production industry has fallen from around 100,000 in 2000 to around 60,000 in 2022, with much of the fall happening in the few years after the United States established permanent normal trade relations with China. Earlier this year, the second largest smelter in the country said it would lay off most of its employees.

So, can the Biden administration bring aluminum smelting back to the United States?


The Department of Energy today announced $6 billion of funding for 33 industrial decarbonization projects, including four for aluminum, worth almost $670 million total. That includes up to $500 million for Century Aluminum to build a new primary smelter, which would make it the first new smelter in the United States since the late 1970s.

“Aluminum is a metal that is of incredible strategic importance to the U.S. and the world,” Jane Flegal, the former White House Senior Director for Industrial Emissions, told me. “We used to do a lot of aluminum production. That has declined precipitously.”

Obama, Trump and Biden have tried some combination of tariffs and negotiations to bring order to the global aluminum market — some of the Trump-era tariffs remain in place — but none of them had much success. Traditional climate policy, meanwhile, has focused more on the greenhouse gas emissions that come from transportation and electricity generation.

Heavy industry is a massive source of emissions, comprising about a fifth of the global total. The aluminum industry on its own makes up about 2% of global emissions, of which the smelting is responsible for about 80%, with the lion’s share going to the electricity being used to power the process. This makes smelting especially sensitive to both the price and availability of power. It’s no coincidence that Iceland, with its plentiful and always available hydropower and geothermal resources, is a major aluminum producer.

Many industrial processes themselves also produce emissions, which makes industrial decarbonization not just an adjunct of decarbonizing the electricity sector but rather an area that requires its own technological breakthroughs. For example, to make aluminum out of alumina, a powder that is refined from bauxite, requires consuming a carbon anode, which itself is made from an oil refining byproduct. These are businesses that operate on small margins and require huge capital investments to expand or change production, Flegal told me.

And the new technology necessary to decarbonize them wasn't being developed because “there wasn’t the level of investment in new technological pathways,” Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, told me. “These demonstration projects are the first step of showing viability of new production methods.”

The Department of Energy said the smelter “would double the size of the current U.S. primary aluminum industry while avoiding an estimated 75% of emissions from a traditional smelter.” The DOE noted the preferred site for the smelter would be “Kentucky or Ohio/Mississippi River Basins.” Kentucky’s Governor Andy Beshear said Monday that Century had indicated an interest in the Bluegrass State, and that his office was working to put together a bundle of incentives to make the state more attractive.

Wherever it’s located, the facility is expected to create more than 1,000 permanent jobs, Century and the Department of Energy said, which would go to members of the United Steelworkers union. The USW has recently endorsed President Biden and applauded the DOE program.

The decades of job losses in the aluminum sector have “been devastating for our members and communities we work at,” Emil Ramirez, the USW’s vice president for administration, told me. “We have to give the Biden administration credit for recognizing the need to revitalize this important industry.”

Monday, March 18, 2024

Nippon Steel Defends US STEEL Deal After Biden Comes Out Against Bid

Joe Deaux and Shoko Oda
Fri, March 15, 2024 



(Bloomberg) -- Nippon Steel Corp. said it’s determined to complete its $14.1 billion acquisition of United States Steel Corp., even after President Joe Biden stated the company should stay in US hands.

In the wake of Biden’s comments, Japan’s largest steelmaker repeated its previous offer of an additional $1.4 billion in investment and a promise of no layoffs or plant closures, according to a statement on Friday.

While Biden stopped short of saying he would block the takeover, his statement on Thursday marked a rare presidential intervention in a transaction that outside an election year would have drawn less political scrutiny. Nippon Steel is doubling down on its bid for its iconic US rival just as opposition from the White House threatens to become insurmountable to getting the deal done.

The US also risks upsetting relations with a key ally. Japanese Prime Minister Fumio Kishida is due to hold a summit with Biden in Washington on April 10, where security cooperation will be on the agenda, but the US Steel issue is set to cloud the meeting.

“US domestic politics is defining what should be up to two private companies to decide,” said Shihoko Goto, director of the Asia Program at the Wilson Center in Washington DC. “The US Steel/Nippon Steel debate is also driving a harmful wedge between otherwise solid partner nations,” she wrote in a post on X, the social media site formerly known as Twitter.

Another Bidder


In the wings is the possibility of another bid for US Steel from Cleveland-Cliffs Inc. Earlier on Thursday, Chief Executive Officer Lourenco Goncalves said he’d consider making an offer — with union support — albeit at a significantly lower price than Nippon Steel’s proposal. US Steel rejected an earlier bid from Cleveland-Cliffs.

Nippon Steel’s shares fell slightly in Tokyo after an initial advance following its statement.

But a plunge in US Steel’s shares shows that investors are increasingly concerned about the future of the Japanese deal. The stock slumped as much as 11% on Thursday to $36.38, but pared losses after Goncalves’ comments, closing at $38.26. Its shares have dropped 18% in two days and are trading sharply below Nippon Steel’s offer of $55 per share.

Despite its storied history, US Steel’s role in the economy has diminished over several decades, a period during which producers in Asia have risen to dominate the global steel market. And while Nippon Steel’s proposed acquisition targets a historic business name, a takeover in the US commodities industry by a company based in a friendly country is hardly unusual.

Biden’s comments have also shone a fresh light on the influential position held by the United Steelworkers union and its leader, David McCall. Biden called McCall Thursday morning, reiterating that “he has the steelworkers’ back,” the White House said in a statement. For its part, the union welcomed Biden’s call for US Steel to remain domestically owned and operated, saying that the president’s comments should “end the debate,” according to a statement on Thursday.

Nippon Steel initially said in its statement on Friday that there would be no layoffs or plant closures until at least September 2026. That date was deleted in an updated statement later in the day so that the wording is “more appropriate,” according to a spokesperson.

Standalone Company


The political opposition to the deal means it’s increasingly likely that US Steel will end up as a standalone company, according to a note from Wolfe Research. Another possibility is that “a deal still goes through but after the election and likely with concessions to the union,” it said.

Finding a compromise with the union could give Nippon Steel a chance of success, said Takeshi Irisawa, analyst at Tachibana Securities Co. That would help give Biden the cover he would need to walk back his comments on American ownership.

Japan’s top government spokesman, Yoshimasa Hayashi, said at a briefing on Friday that the government is aware of the president’s statement on US Steel but wouldn’t comment on individual companies.

“In any case, the US-Japan alliance is stronger than ever,” said Hayashi. “Japan and the US will continue to work together on the realization of sustainable and inclusive growth and the maintenance and strengthening of a rules-based free and open economic order in the Indo-Pacific.”

Others were less sanguine.

“This throws sand in the wheels of U.S.-Japan economic cooperation,” Mireya Solis, director of the Center for Asia Policy Studies at Brookings Institution, posted on X. “Who will believe us when we appeal to the spirit of ‘friend-shoring’?”

--With assistance from Ryotaro Nakamaru, Jon Herskovitz, Yoshiaki Nohara and Isabel Reynolds.

(Includes an update of Nippon Steel’s comment in second paragraph)

Friday, March 15, 2024

How the Greedy Rich Cheat Working Americans at Every Turn

March 15, 2024
Source: Originally published by Z. Feel free to share widely.


The widowed single mom attacked grocery shopping with the doggedness of a Marine on a mission.

To provide for her family in the face of corporate price-gouging, she bought off-brand items and selected eggs for protein instead of higher-costing meat. She even worked multiple jobs to keep the family solvent.

And despite the challenges she faced, she never complained, recalled Denny Mitchell, a longtime United Steelworkers (USW) activist who’s filled with admiration for the way the woman raised her family.

Ordinary working people like Mitchell’s friend continue to build America with humble heroism, even as the greedy rich try to cheat them not only at the checkout line but everywhere from the workplace to the halls of power.

“It’s a fight. It’s always a fight,” observed Mitchell, noting that Kellogg’s CEO Gary Pilnick underscored the arrogance of the 1 percent when he flippantly suggested in February 2024 that struggling families eat cereal for dinner.

Pilnick, who pockets millions in salary and incentive compensation, runs a corporation largely responsible for the rampant price-gouging in the nation’s grocery stores.

Kellogg’s jacked up prices by more than 14 percent from the second quarter of 2022 to the same period in 2023, while announcing plans to shower shareholders with stock buybacks and dividends.

Other food-makers joined in the exploitation, raising prices, reducing the amount of product in their packaging, or switching to cheaper, lower-quality ingredients that enable them to pad their bottom lines on unwitting consumers’ backs.

U.S. Senator Bob Casey of Pennsylvania released a report in December assailing numerous companies for “shrinking products to super-size profits.” Among many other examples, Casey revealed that General Mills quietly shaved 1.2 ounces from boxes of Cocoa Puffs in 2021 while Conagra started skimping on ingredients in its Smart Balance spread in 2022, “resulting in a watery product that sparked consumer backlash.”

Even Cookie Monster resents the unscrupulous sleight of hand. “Me cookies are getting smaller,” the lovable Muppet groused in March 2024 in a hugely popular social media post shaming greedy food companies.

Mitchell said his friend, the single mom, worked so hard to provide nutritious meals that her kids never went without or even realized that she struggled.

Still, her sacrifices fuel his contempt today for millionaires and billionaires eager to fleece the working Americans who kept the nation functioning all through the pandemic.

“Let’s get a little bit more out of them,” said Mitchell, a retired member of USW Local 135L in Tonawanda, New York, summing up the mindset of the rich. “It’s a constant squeeze.”

Yet it isn’t enough for the wealthy to take ever-larger portions of Americans’ paychecks. They also plot alongside right-wing politicians to inflict more pain on workers with no income at all.

West Virginia’s corporate-friendly, Republican-controlled Senate just passed a bill not only intended to reduce unemployment benefits—supported by employer contributions—but also to impose the deepest cuts on those struggling the longest.

They’d rather force people into dead-end jobs than support them during the search for family-sustaining employment. That helps corporations exploit low-wage workforces while putting families on a course for poverty.

Fortunately, pro-worker lawmakers in Nevada stymied proposed cuts in their state’s unemployment compensation program after publicly embarrassing the bill’s Republican supporters for coddling the rich at the expense of working people.

“We fight over nickels and dimes and pennies in this place when it comes to poverty, and we give money away like it’s a free-for-all when it comes to the most wealthy,” declared Democratic State Senator Machaela Cavanaugh, who led opposition to the measure.

A coalition of workers and their allies in 2023 defeated proposed unemployment benefit cuts in Arizona, where Republicans float the idea from time to time either because they fail to recognize the potential impact or don’t care, said Vikki Marshall, president of the Steelworkers Organization of Active Retirees (SOAR) chapter in Tucson.

“We want to make sure our children are eating,” she said, noting the cuts would have devastated single-income families. “We want to make sure they go to school with something in their stomachs and clothes on their backs.”

“This is the only avenue they have. Nobody knocks on the door saying, ‘I want to give you some money to tide you over,’” said Marshall, one of the union activists who oppose measures like these across the country.

Unions provide workers with a path forward.

Even as it exploited consumers, for example, Kellogg’s also attempted to deny its manufacturing workers a decent living. So in 2021, about 1,400 union members at four cereal plants staged a 77-day strike that forced the company to provide raises, pension increases, and other enhancements.

“It was a tough strike. They didn’t want to give anything. They wanted to take, take, and take,” Dave McLimans, a member of SOAR’s Pennsylvania executive board, said of Kellogg’s management.

Ultimately, “solidarity, sticking together,” won the day for the striking workers, added McLimans, who showed his support by joining the picket line at Kellogg’s Lancaster County plant.

Inspired by that victory, and other worker wins, more and more Americans seek to join unions to secure not only the higher wages and better benefits but the safer working conditions and the voice on the job that collective action provides.

The surge in union drives makes sense to McLimans, who took part in the USW’s successful 105-day strike against Lukens Steel in 1991 and 1992.

McLimans credits the USW with paving the way for his middle-class life and secure retirement. And he knows that unions still serve as the only true bulwark for workers fighting corporate greed today.

“There comes a time when enough is enough,” he said. “It’s time we all come together and start kicking and screaming. We need to keep the pressure on.”


David McCall is the international president of the United Steelworkers Union (USW).

Thursday, March 14, 2024

Cliffs CEO weighs lowball bid for US Steel with union backing

Bloomberg News | March 14, 2024 |

Cleveland-Cliffs President & CEO Lorenco Goncalves. 
Source: YouTube

Cleveland-Cliffs Inc. chief executive officer Lourenco Goncalves said he’d consider another bid — with union support — for United States Steel Corp., albeit at a significantly lower price than the existing offer from Nippon Steel Corp.


That potential bid, though, is dependent on the current Nippon-US Steel tie-up falling apart, Goncalves said in a phone interview. If he were to make an offer, the Cliffs CEO said he’d have the backing of the influential steelworkers union that’s also blasted Nippon’s takeover approach.

The Cliffs CEO, known in the industry for his colorful and combative approach, touted his closeness and support from the influential steel union — and then proved his point by dialing USW President David McCall into the call with Bloomberg News. In the call, McCall reiterated the union’s support for a potential Cliffs bid.

Goncalves also said he’s talking regularly to the White House.

The White House declined to comment.

A recent share plunge for US Steel shows that investors are increasingly concerned about the future of the Nippon deal. President Joe Biden on Thursday said the iconic Pennsylvania company should retain American ownership. Biden’s move against a takeover by a the Japanese company came despite the risk of upsetting a key ally.

US Steel plunged as much as 11% on Thursday to $36.38. The stock is down about 20% in two days, on pace for the biggest such loss since 2020.

Nippon’s proposal is to buy the company for $55 per share in cash.

If given the opportunity, Goncalves would consider a bid “in the $30s,” he said in the interview Thursday.

Nippon didn’t immediately respond to a request for comment. On Wednesday, Nippon Steel and US Steel in a joint statement said the companies will continue to advocate for the deal, and “we are confident that fair and thoughtful evaluation will result in its approval.”

Biden’s Intervention

Biden’s statement marks a rare presidential intervention in a transaction that outside an election year would have drawn less public scrutiny. Despite its storied history, US Steel’s role in the economy has diminished over several decades, a period during which producers in Asia have risen to dominate the global steel market. And while Nippon Steel’s proposed $14.1 billion acquisition targets a historic business name, a takeover in the US commodities industry by a company based in a friendly country is hardly unusual.

Still, the announcement of a Japanese company’s acquisition triggered opposition from Republican and Democratic lawmakers as well as the influential United Steelworkers union. Biden’s allies have urged the administration to kill the deal over national security concerns and the threat to unionized steel jobs.

Goncalves said he thinks it’s a “foregone conclusion” the Nippon deal will fall apart.

“There is no more lobbying, there’s no more negotiation. It’s over. It’s over,” Goncalves said, referring to Nippon Steel’s deal to buy US Steel. “And the only other buyer that the union would accept is Cleveland-Cliffs.”

Union support


After dialing McCall into the phone interview, Goncalves said to the union leader: “I would like you to, if you can, express to him — to confirm or negate — if you disagree with me, that Cliffs is the only company the union would endorse to acquire.”

“Yes, because you still have our right to bid,” McCall responded to Goncalves. He was referring to a legal right the union had to launch a counteroffer for US Steel, which it transferred to Cliffs last year.

The Nippon bid remains on the table and it’s not clear what implications Biden’s remarks might actually have for an ongoing federal review.

Still, the reiteration of support from the union for Cliffs will be a blow to the Japanese company, which has been seeking to win over McCall and his labor group in order to reduce the political pressure against the deal.

(By Joe Deaux)

 

US Unions File Trade Complaint Accusing China of Unfair Shipbuilding Policy

Chinese shipbuilding
The complaint targets steel and other steps taken to build up China's shipbuilding industry (CSSC)

PUBLISHED MAR 12, 2024 6:21 PM BY THE MARITIME EXECUTIVE

 

A wide-reaching coalition of American labor unions, supported by U.S. Senators, today filed a formal complaint against China targeting its shipbuilding industry and the policies of the Chinese government in steel and other sectors that have supported the growth of the industry. In addition to blaming China for the decades-long decline in the American shipbuilding industry, the complaint also reaches into everything from China’s port development around the world, to its logistics network, and the logistics software LOGINK, calling for fees for Chinese-built ships and a U.S. Shipbuilding Revitalization Fund.

The 137-page complaint along with hundreds of supporting documents, was filed today under Section 302 of the U.S. Trade Act of 1974. The Act allows the United States to respond to “unreasonable or discriminatory foreign government practices that burden or restrict U.S. commerce.” The effort is being led by the union for U.S. steelworkers (UWS), along with machinists (IAM), shipbuilders (IBB), electrical workers (IBEW), and the AFL-CIO’s Maritime Trade Department.

The groups are accusing China of “unreasonable and discriminatory acts, policies, and practices” to dominate the maritime, logistics, and shipbuilding sectors. They highlight the plans of China’s Central Government to build up the shipbuilding industry over the past 20 years saying they have taken actions to seize market share, suppress prices, and create a worldwide network of ports and logistics infrastructure.

The petition shows that China has “funneled hundreds of billions of dollars and adopted numerous supporting policies,” to support shipbuilding and the maritime sector. They said the actions include loans from state-owned banks, equity infusions, provisioning steel at below-market prices, tax preferences, and tens of billions of dollars in loans to support construction of thousands of vessels in China for foreign export. They also highlight that China has become a leader in ship financing and leasing.

Among the practices the petition calls unfair are mandates that Chinese companies must purchase and use Chinese-built companies. They also said the government has directed mergers and disapproved alliances with foreign companies.

The unions cite the decline of the U.S. shipbuilding industry from its post-World War II peak to its current position as the 19th in global rankings. They also cite that the U.S. has fewer than 80 commercial ships in international service while the Maritime Security Program is now using ships built in China.

Under U.S. law, the formal complaint goes to the U.S. Trade Representative, Ambassador Katherine Tai. She has 45 days to determine whether to initiate an investigation. Tai issued a statement acknowledging receipt of the complaint, saying, “I look forward to reviewing this petition in detail.” 

She commented in a written statement, “We have seen the PRC create dependencies and vulnerabilities in multiple sectors, like steel, aluminum, solar, batteries, and critical minerals, harming American workers and businesses and creating real risks for our supply chains.”

The unions point out that a single commercial ship can require approximately 13,000 tons of structural steel, 60,000 gallons of paint, 130 miles of electrical cable, and many other products made by their members. In the petition, they call for actions from the Biden administration including a port fee on Chinese-built ships that dock in the U.S. as well as a fund to help the U.S. shipbuilding industry. The port fee is proposed recognizing that most Chinese-built ships used in international commerce are never imported into the U.S. in the sense of being owned by U.S. companies.

Senators Tammy Baldwin of Wisconsin and Bob Casey of Pennsylvania joined with the unions. According to their statement, China now has the capability to build over 1,000 ocean-going vessels each year while the U.S. produces fewer than 10.

There is no recognition in the complaint that U.S. shipbuilding has been in decline far longer than China was a competitor. They do not address the cost and supply issues nor acknowledge the requirement to build American if the vessel will be in the U.S. coastal trade.
 

Biden opposes Nippon Steel takeover of US Steel


By AFP
March 14, 2024


US President Joe Biden speaks during a campaign event in Milwaukee, Wisconsin - Copyright GETTY IMAGES NORTH AMERICA/AFP/File SPENCER PLATT
Danny KEMP

President Joe Biden said Thursday he is against the proposed sale of US Steel to Japan’s Nippon Steel, as election year considerations appeared to outweigh the risk of angering key ally Japan.

Biden’s intervention in the planned $14.1 billion acquisition comes less than a month before he hosts Japan’s Prime Minister Fumio Kishida for a state visit to the White House aimed at boosting ties and countering China.

But Biden’s eye is apparently on November’s US presidential election against Donald Trump, with lawmakers from both sides having joined unions in opposing the sale of a American manufacturing icon to a foreign owner.

“It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it,” Biden said in a statement.

“US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

But Biden did not explicitly say he would block the deal, which has been under a US federal review of how it affects national security interests since it was announced in December.

US Steel shares were down 5.3 percent in pre-market trading following the Biden statement.

In a joint statement, Nippon Steel and US Steel said they believed the deal should still go through, saying it reflected the “close alliance between Japan and the United States”.

“We welcome the administration’s scrutiny of the transaction, as an objective and comprehensive review of this transaction will demonstrate that it strengthens US jobs, competition, and economic and national security,” they said.

“We will continue to advocate for this deal, and we are confident that fair and thoughtful evaluation will result in its approval.”

– ‘Horrible’ –

But the proposed sale has become an election-year football in the United States.

US Steel is based in Pittsburgh in the key battleground state of Pennsylvania, which Biden won in the 2020 election and will fight with Trump for again in November.

Trump said in February that he would block the “horrible” deal if he wins a second term in the White House.

“I would block it instantaneously. Absolutely,” he said.

It also goes to the heart of Biden’s election manifesto pledge to rebuild American manufacturing, with concerns that a foreign takeover could send the wrong signal to the electorate.

Biden has been wooing US unions ahead of the election as he competes with Trump for vital working class voters.

Unions have reacted with fury to the proposed deal, despite the combined company’s vow to honor contract agreements between US Steel and the United Steelworkers (USW) union.

In December the USW ripped the proposed deal as reflective of a “greedy, shortsighted attitude” of US Steel, which dates to 1901, and questioned the ability of Nippon to honor contracts.

At the time the transaction also drew bipartisan howls on Capitol Hill, with Pennsylvania Democratic Senator John Fetterman calling the deal “absolutely outrageous.”

Trump-allied Ohio Senator JD Vance and two other Republicans asked Treasury Secretary Janet Yellen to block the deal, calling domestic steel production “vital to US national security.”

The White House said at the time that the deal should be closely investigated, warning that it could have national security implications.

The firms in December asked the Committee on Foreign Investment in the United States (CFIUS) — an interagency body established to review foreign takeovers of US firms — to evaluate the deal.


Wednesday, March 13, 2024

“Union” Gives a Close Look at the Historic Amazon Labor Union Win


In 2022, Amazon workers at the JFK8 warehouse in Staten Island became the first in the US to win a union election. The new documentary "Union" gives a compelling glimpse behind the scenes of the victory — and the challenges that have come since.

By Eric Dirnbach
March 12, 2024
Source: Jacobin

Chris Smalls appears in Union by Brett Story and Steve Maing, an official selection of the U.S. Documentary Competition at the 2024 Sundance Film Festival. Courtesy of Sundance Institute. | Photo by Martin DiCicco

In 2022, a group of Amazon workers stunned the world by winning a union election at the huge JFK8 warehouse in Staten Island, New York. Many had wondered if Amazon workers in the United States could ever win a union election at the corporate giant, which transformed from a small online bookseller in the 1990s to a behemoth with 1.5 million employees.

These Staten Island workers showed that it could be done. But how did they do it? A new documentary, Union, offers a close look at what happened, following the organizing campaign for over a year. The film focuses a lot, necessarily, on Christian Smalls, the founder and leader of the Amazon Labor Union (ALU). After he was fired early in the pandemic in 2020 for leading a walkout to protest Amazon’s COVID-19 policies, he started talking to other workers at JFK8 about the need for a union. The campaign soon attracted other key leaders and supporters shown in the film, including Angelika Maldonado, Connor Spence, Derrick Palmer, and Madeline Wesley.
The Organizing Process

The film captures a lot of compelling scenes of union members in action and does a nice job of showing the nuts and bolts of union organizing, which started at JFK8 in the spring of 2021. Union depicts a seemingly endless number of Zoom and phone calls, discussions with workers, handing out flyers, and collecting union authorization cards.

Some new workers got jobs as “salts” to help organize. A principal strategy was to have activists stationed at a food tent near the bus stop at the warehouse; the film shows workers doing this at all hours of the day for a year, making themselves available to talk with coworkers as they started and ended their shift, often when it was dark out.

The film’s depiction of the Amazon workers’ plight and organizers’ dogged efforts is often moving. One featured worker was homeless and sleeping in her car; another had a sister who worked at the warehouse who died of COVID-19. In one scene, several organizers sit in the tent late at night, silent and tired, with a fire going for warmth, waiting for more workers to talk with. This is the real work of organizing, often unglamorous and exhausting for months on end; in moments like that, doubt often creeps in that this will ever work out.

Union also contains some fantastic scenes of the company running captive-audience misinformation sessions, which it called “trainings,” to encourage workers to vote against forming a union. Workers in those meetings took videos of the discussions, where ALU supporters would interrupt with their own questions.

It’s remarkable how ham-fisted these anti-union efforts can seem to those of us on the Left, recycling as they do the same tired talking points: The union is just a business that wants your dues. The union is lying and making false promises they can’t deliver on. The union is an outside third party that will get in the way of our special, direct employer-employee relationship.

Yet employers spend hundreds of millions of dollars a year on union-busting consultants. That’s no doubt because these anti-union campaigns are unfortunately often effective. So it was inspiring to see the workers fighting back in those meetings.

After months of work collecting over 1,700 union cards, the ALU filed for an election. The union faces a setback, however, when it discovers it didn’t have enough cards because of the 150 percent annual worker turnover at the warehouse. This curse of a high-turnover workplace meant the ALU had to spend several more months signing up new workers.

The union refiled more cards and got its election scheduled for March 2022. The film presents the growing drama and some tense moments during the two-month election campaign: We see yet more captive-audience meetings and write-ups of union supporters, and workers discover that Amazon is paying union-busting consultants $2,000 a day. We hear more about the issues motivating workers — low pay, the grueling pace of work, inadequate breaks, unfair disciplinary policies. Organizers become tired and are arguing. One chaotic scene shows Smalls and several other workers being arrested in front of the facility.

But ultimately the union prevailed, in a 2,654–2,131 win. The ALU press conference and celebration afterward is another moving scene. That’s when Smalls made his famous joke about company founder Jeff Bezos: “We want to thank Jeff Bezos for going to space, because when he was up there, we were signing people up.”

Union concludes with the company stalling on contract negotiations, which it is still doing today. Amazon is fighting to overturn the election win and has now joined several other employers in taking the extraordinary step of arguing that the National Labor Relations Board is unconstitutional. Given the current right-wing-dominated Supreme Court, there is a decent chance that the nearly ninety-year-old labor relations system, in place since the National Labor Relations Act was passed in 1935, could soon be discarded.
The Dominance of Smalls

ALU president Christian Smalls is undoubtedly Union’s central character. We get to know Smalls over the course of the film, as it essentially follows him around. But other organizers are given less attention — mostly in passing during meetings and discussions with Smalls. Giving more time to other ALU leaders — their backgrounds, perspectives, and motivations — may have given the viewer a better understanding of the union and its organizing process. That said, the documentary’s focus on Smalls in fact reflects his central position in the union effort.

Smalls’s dominance ends up leading to trouble. The film shows that some members find him unwilling to listen and make space for other ideas. One worker quits the union, calling it a “boys’ club” controlled by Smalls; she wants another union to come in. At one union meeting shown in the film, another member becomes agitated, claiming that decision-making is being monopolized by Smalls and a few others.

The film suggests that, despite his dedication to the union, Smalls was perhaps unable to appreciate the need for more leadership from others and more space for collective deliberation. Grievances with Smalls eventually led a faction of the members to form a Democratic Reform Caucus to protest the ALU’s strategy and what they decried as its lack of democracy.

This kind of debate about union democracy is usually healthy and necessary, and thankfully for the ALU both sides eventually reached a settlement. On March 4, the Democratic Reform Caucus announced that the union had voted “yes” on a referendum calling for the election of new union officers.
A New Organizing Paradigm?

When ALU won its election, there was a lot of discussion in the labor movement about whether their campaign suggested a new paradigm for organizing. For example, the union drive was public from the start, they filed for an election with a low 30 percent of union-authorization cards, and organizers didn’t do any worker house visits — all departures from standard union best practices.

The unconventional victory was exciting and surprising to many observers. But then the ALU lost two subsequent elections, one at another warehouse in Staten Island and one in Albany, New York. Other union efforts at Amazon have had difficulty breaking through as well — the Retail, Wholesale, and Department Store Union (RWDSU) has lost two elections at the company’s Bessemer, Alabama, warehouse.

I tend to think that organizing Amazon at scale will require the contributions of many unions and experimentation with different strategies. The winning ALU campaign at JFK8 suggested to me not that we need dramatically new organizing methods, but that the traditional techniques of constant conversations and relationship building with other workers, shown so well in the film, are still key.

Importantly, the ALU had a strong rank-and-file worker led campaign, reinforcing the important idea that the union is the workers, not a third party. The ALU was also able to organize workers inside the warehouse break rooms, a tactic that was likely crucial in allowing it to reach more workers.

The fight to unionize Amazon continues. Aside from the ALU and RWDSU actively organizing, the Teamsters have started an Amazon division and have organized one of the many Amazon delivery contractors (though the delivery company’s contract with Amazon was canceled soon after). Some Amazon workers are members of the independent Amazonians United across a number of warehouses, which has organized for improvements in the workplace, winning more water stations, reinstatement of unjustly fired workers, and the right to wear earbuds at work. The end of the film shows workers organizing at an Amazon facility in California.

Union does a great job capturing the organizing of a bold and unconventional independent union, facing off against a powerful, intransigent employer. Union campaigns often get attention only in dramatic moments like an election win or a strike. But Union presents the grind and glory of organizing before and after the election, taking the time to show us the tough and painstaking process of building solidarity.



Inside the UAW’s Southern Strategy


 
 MARCH 12, 2024

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Persuading Southern autoworkers to join a union remains one of the U.S. labor movement’s most enduring challenges, despite persistent efforts by the United Auto Workers union to organize this workforce.

To be sure, the UAW does have members employed by Ford and General Motors at facilities in Kentucky, Texas, Missouri and Mississippi.

However, the UAW has tried and largely failed to organize workers at foreign-owned companies, including Volkswagen and Nissan in Southern states, where about 30% of all U.S. automotive jobs are located.

But after the UAW pulled off its most successful strike in a generation against Detroit’s Big Three automakers, through which it won higher pay and better benefits for its members in 2023, the union is trying again to win over Southern autoworkers.

The UAW has pledged to spend US$40 million through 2026 to expand its ranks to include more auto and electric battery workers, including many employed in the South, where the industry is quickly gaining ground.

Based on my five decades of experience as a union organizer and labor historian, I anticipate that, recent momentum aside, the UAW will face stiff resistance from Toyota, Volkswagen, Mercedes-Benz and the other big foreign automakers that operate in the South. The pushback is also coming from Southern politicians, many of whom have expressed concern that UAW success would undermine the region’s carefully crafted approach to economic development.

Lauding the ‘perfect three-legged stool’

After the region’s formerly robust textile industry imploded in the 1980s and 1990s because of an influx of cheap imports, Southern business and political leaders revived the region’s manufacturing base by successfully recruiting foreign automakers.

The strategy of those leaders reflects what the Business Council of Alabama has described as the “perfect three-legged stool for economic development.” It consists of “an eager and trainable workforce with a work ethic unparalleled anywhere in the nation,” accompanied by a “low-cost and business-friendly economic climate, and the lack of labor union activity and participation.”

The prospect of a low-wage and reliable workforce has lured the likes of Nissan, BMW, Mercedes-Benz, Kia, Honda, Volkswagen and Hyundai to the South in recent decades.

Although many of those companies negotiate constructively with unions on their home turf, the lack of union membership and the protections that go with it have proved a draw for them in the United States.

As journalist Harold Meyerson has noted, these foreign automakers embraced the opportunity to “slum” in America and “do things they would never think of doing at home.”

The absence of union representation is a major reason why.

Less than 5% of workers in six Southern states are union members, and only Alabama and Mississippi approach union membership levels above 7%, according to the Bureau of Labor Statistics.

That’s below the national average, which slid to 10% in 2023.

Blaming unions for bad job prospects

One way automotive employers in the South have blocked unions is by portraying them as outdated institutions whose bloated contracts and rigid work rules destroy jobs by making domestic auto companies uncompetitive.

Automotive leaders in the South argue the region has developed an alternative labor relations model that provides management with flexibility, offers wages and benefits superior to what local workers have earned previously and frees employees from any subordination to union directives.

Southern automakers also draw on another powerful resource in resisting the UAW: public intervention by top elected officials.

In 2014, when the UAW attempted to organize a Volkswagen plant in Chattanooga. Bob Corker, Tennessee’s junior U.S. senator and a former mayor of Chattanooga, weighed in as voting commenced.

Corker claimed he had received a pledge from Volkswagen’s management to expand production in Chattanooga if workers voted against the union.

Three years later, Mississippi Gov. Phil Bryant similarly urged Nissan workers to reject the UAW.

“If you want to take away your job, if you want to end manufacturing as we know it in Mississippi, just start expanding unions,” Bryant said in 2017.

A majority of the autoworkers heeded their conservative leaders’ advice in both cases and voted against joining the UAW.

Making dire warnings

With the UAW ramping up its organizing efforts again, Southern governors are sounding alarms once more.

“The Alabama model for economic success is under attack,” warned Alabama Gov. Kay Ivey.

She then asked workers: “Do you want continued opportunity and success the Alabama way? Or do you want out-of-state special interests telling Alabama how to do business?”

Unions “have crippled and distorted the progress and prosperity of industries and cities in other states,” South Carolina Gov. Henry McMaster declared in his Jan. 24, 2024, State of the State address. He then issued an ominous call: “We will fight” the UAW’s labor organizers “all the way to the gates of hell. And we will win.”

The UAW counters that union membership means workers will get predictable raises, better benefits and improved workplace policies.

Changing context

Although these arguments from anti-union politicians haven’t changed much over the years, the context certainly has.

The UAW’s big wins on pay and benefits resulting from its 2023 strike against General Motors, Ford and Stellantis have increased its clout and credibility.

Many automakers with a U.S. workforce not covered by the UAW – including Volkswagen, Honda, Hyundai and other foreign transplants – responded by raising pay at their Southern plants. The union justifiably describes those raises as a “UAW bump.”

The UAW will presumably cite these pay hikes in its outreach to workers at Tesla and other nonunion companies involved in electric vehicle and battery production in which the industry is investing heavily.

“Nonunion autoworkers are being left behind,” the UAW’s recruiting website warns. “Are you ready to stand up and win your fair share?”

The pitch continues: “It’s time for nonunion autoworkers to join the UAW and win economic justice at Toyota, Honda, Hyundai, Tesla, Nissan, BMW, Mercedes-Benz, Subaru, Volkswagen, Mazda, Rivian, Lucid, Volvo and beyond.”

Some Southern autoworkers, meanwhile, have been expressing concerns over scheduling, safety, two-tier wage systems and workloads that they believe a union could help resolve.

It’s also clear they’ve been emboldened by the gains they have seen UAW members make.

Southern autoworkers applaud the union-organizing drive underway at a VW factory in Chattanooga, Tennessee.

Revving up

The UAW’s campaign is just starting to rev up.

In accordance with its “30-50-70” strategy, the union is announcing the share of workers who have signed union cards in stages. Once it hits 30% at a factory, the UAW will announce publicly that an organizing campaign is underway. At the 50% mark, it will hold a public rally for workers that includes their neighbors and families, as well as UAW President Shawn Fain.

Once it gains support from 70% of a plant’s workers, the UAW says it will seek voluntary recognition by management.

A recent National Labor Relations Board ruling provides unions with additional leverage in this process. If management refuses to recognize the union’s request, the employer would then be required to seek an NLRB representation election.

To win, unions need a majority of those voting. Under the new rule, if management is found to have interfered with workers’ rights during the election process, it could then be required to bargain with the union.

So far, the UAW has announced that it has obtained the support of more than half the workers at factories belonging to two of the 13 nonunion automakers it’s targeting: a Volkswagen plant in Chattanooga, Tennessee, and a
Mercedes-Benz factory near Tuscaloosa, Alabama. It has also obtained 30% support at a Hyundai plant in Alabama and a Toyota engine factory in Missouri.

I believe that the stakes are high for all workers, not just those in the auto industry.

As D. Taylor, the president of Unite Here, a union that represents workers in a wide range of occupations, recently observed: “If you change the South, you change America.”The Conversation

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Bob Bussel is Professor Emeritus of History and Labor Education at the University of Oregon.

A New Life for Mexico’s Oldest Union

 

MARCH 11, 2024
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Photograph by David Bacon

Humberto Montes de Oca is the Secretary for Internal Relations of the Mexican Union of Electrical Workers (SME). He was originally a working-class art student who became active in the left-wing political movements of the period of Mexico’s Dirty War (1970s to early 1980s). He joined the SME as a political act to become part of the country’s radical working-class movement, and he became one of its most important leaders.

In 2009 the administration of Felipe Calderón dissolved the Power and Light Company of Central Mexico, one of the country’s two national providers of electrical power. He then declared the union non-existent and terminated the jobs of its 44,000 members. While other administrations had regarded the SME, one of Mexico’s oldest, and most democratic and radical unions, as a political opponent, no government before had taken such an extreme step.

About 16,000 of the union’s members decided to resist the attack, and they began an effort that continues today to recover their jobs and workplace rights, including the union contract. They kept the union’s structure and headquarters intact, and then set up an allied workers’ cooperative to generate work and help members survive. The other members took the government’s severance package and gave up their union and job rights.

In this interview, presented as a first-person narrative, Montes de Oca describes the current state of the union and its relationship with the progressive administration of President Andrés Manuel López Obrador (AMLO).

The Current State of Labor Reform

Today we are in a situation created by the 2019 freedom of association reform. To some degree that reform was forced on the government by the pressure of unions in Canada and the United States, as part of the negotiation of the new free trade agreement T-MEC (Tratado–Mexico Estados Unidos Canada, USCMA in English). Pressure was put on Mexico to make changes in union representation because charrismo and the employer protection contracts were used to cheapen the labor of Mexicans. Workers in Canada and the United States were at a disadvantage. Capital investment comes to Mexico because of these more favorable conditions.

In Mexico, those unions argued, workers should have greater ability to defend their interests to increase their benefits and income. This reform was implemented using this logic. It requires all unions to show that they are legitimate representatives of workers, and to create legitimate collective labor contracts. The corporate and employer protection unions opposed this reform because it goes against their interests. But they have also adjusted by inventing a strategy in which they go through the process, even though everything actually remains the same.

It is true that U.S. and Canadian unions sought to integrate the labor reforms in Mexican legislation into the labor chapter of the T-MEC. But it is also true that in Mexican unionism there is a tradition of democratic struggle. Our very survival as a union has been a fight for union democracy in tough battles in the 70s, 80s, and 90s.

But the reform created bodies, like the Federal Labor Registration Center, which exercise very arbitrary power in a way that does not correspond to the spirit of the law. There is a danger that unions themselves will lose their autonomy and the labor movement its independence.

Yet there are groups of workers who are taking advantage of the situation to free themselves from charro unions. The example of the independent union victory at the General Motors plant in Silao is the clearest. We can see that it is possible for workers, using this legitimation process, to displace charro unions and achieve authentic collective bargaining.

So there are two kinds of outcomes. On the one hand a sham process allows charro unions and protection unions to become legitimate through a fraudulent procedure. On the other hand, an authentic process makes it possible to displace the charros and create new democratic unions.

Unfortunately, there is as yet no commitment to a widespread challenge by established independent unions to the old Confederation of Mexican Workers (CTM) structure. Democratic unions are fragmented.

At the same time, the Left no longer talks about unions. It is losing its link with the workers. We need a workers’ movement that thinks of itself as a class, beyond individual sectors or branches. The new Central Obrero, and organizations in other sectors who want a movement for union democratization in our country, should come together. We have common issues: freedom of association, union democracy, social security, pensions, retirements, salaries—the basis for generating a movement. In that movement there’s room for many efforts, including the Casas Obreras, the new emerging unions and federations of unions, and the old pillars of democratic unionism such as the SME.

Perhaps in the medium- and long-term there will be a regrouping. Even if some are not moving in that direction now, perhaps later they will be convinced that this is needed, and they can help to build that process.

Nationalizing the Energy Industry

We share with the government the idea of nationalizing the electrical industry. In the past, we defended the nationalized electricity industry against the gradual privatization that took place in previous administrations.

Today we call for reversing Enrique Peña Nieto’s structural privatization reform, imposed in 2013. But we want to add a social dimension, the recognition of the human right to energy as a constitutional right, and the social management of this strategic area, with broad participation of technicians, workers, and energy users. We need researchers who can manage this public company and not turn it into a political instrument of the state and the party in power. This is what we’ve frequently seen in our country, in the case of public companies.

It is not enough to nationalize or renationalize the energy industry. We need the social management of strategic industries for the common good, with the broad participation of society, of workers, of specialists, of the energy consumers themselves. The right to energy is an inalienable human right. The solution is not as simple as saying, “let it be made public and that’s it.” What we have now is the bureaucratization of the management—public officials who obey commercial logic rather than the general interest of society.

The Federal Electricity Commission, the company that supplies electric energy, is a public company, but that does not mean that it has a social character. The company will still cut you off if you don’t pay.

Difficult Relations with the Lopez Obrador Administration

AMLO was running for office in 2010, during the hunger strike in which our union fought the attack meant to destroy us. On one occasion he came to be with us. He gave us a letter in which he promised that when he became president, he would reintegrate us into the workforce. To date he has not fulfilled this commitment, and he has not given the union a hearing.

Instead, AMLO has supported the former leaders of our union, who in 2009 called for the capitulation of the SME. They wanted to collect severance pay, so they resigned from the union and tried to dissolve it, liquidating its assets and distributing the money among the workers. We made a commitment to resist, and to fight against the extinction decree. They abandoned this fight and yet, after we fought for 14 years, they are the ones close to the president.

Some officials, like presidential spokesperson Jesús Ramírez Cuevas and the director of the Federal Electricity Commission, Manuel Bartlett Díaz, are using these dissident groups to attack the union. They threaten to take over our facilities by violence and mount a media campaign of slander.

People in this government believe that the governing party should have unions that are useful, loyal, and subordinate. To them, a corporatized SME would be useful. Since we have not shown any subordination, and we safeguard our autonomy, they don’t like this.

Our organization has always been critical. We recognize that the president is making an effort to recover the country’s energy sovereignty, but we also have criticisms of its labor policy. There are many unresolved conflicts and strikes, like the three-year strike in Sur Notimex and the miners’ strike in Cananea. There is no solution for our colleagues of the National Coordination of Education Workers. In short, the regime’s labor policy is not what one might hope for from a democratic government.

The current government has little dialogue with social movements, unlike the progressivism in South America, where presidents like Lula, Chávez, and Evo Morales have had a lot of communication with them. In Mexico, many social movements that supported MORENA [the current governing party] in 2018 feel disappointed because they have not seen their situation improve or attention to their demands. The government proposes a direct relationship with the population without intermediaries. In its view, a union, a neighborhood organization, or an organization of academics or researchers is an intermediary. Instead, the government supports the people through its social policy and assistance programs.

This is a clientelistic electoral policy, and in Mexico City, MORENA lost the majority of the mayoralties in the last election. The city has been the cradle of the left-wing social movement in Mexico, but there is not a good relationship between the government and its social movements.

The Status of the SME Today

Currently we have a membership of approximately 15,000 active workers and 10,000 retirees, who come from the former company Luz y Fuerza del Centro. We have work in the generation plants recovered from that public company, and other economic ventures where we have collective contracts. We have a collective bargaining agreement with Generadora Fénix and a contract with the Portuguese company Mota-Engil, where we are part of the public limited liability company that generates electricity. We have the right to 50 percent of the company’s profits.

We have other collective contracts with other companies, smaller agreements, which enable us to keep the national industrial registry of our union. We also have people working in the LF del Centro cooperative. The union is made up of workers who work under a collective labor contract, cooperative workers who work in the union’s social and solidarity economy projects, and workers who do not have a job.

We are incorporating the children of the workers in resistance as members, not only in terms of looking for a job, but creating spaces for our young people and children. We have groups for women and for pensioners and retirees. Under Mexican law we have a legal and legitimately constituted, democratically elected leadership. We want to provide spaces for participation.

We have a strong presence in the central states of Mexico, with a union structure in Morelos, Michoacán, Hidalgo, the State of Mexico, and Mexico City. We maintain a strong strategic alliance with the users of electrical energy—the National Assembly of Electrical Energy—and we hold days of struggle on the 11th of each month. Our objective is labor reintegration in the nationalized electricity industry. For users, we want recognition of the human right to energy. Users need a clean slate so their debts are forgiven.

We have very good relations with the unions in the United States and Canada. We were able to present a complaint under the labor chapter of the old NAFTA because of help from the unions in both countries. That complaint helped us put pressure on the Peña Nieto government to find a political solution to our conflict. We work to maintain those relationships.

This link between unions is necessary to defend the interests of the working class in our three countries. There is actually greater protection and more freedom for workers in Mexico than in the United States, where labor rights are very restricted. Article 123 of our Constitution and the Federal Labor Law are the products of our social movements. Paradoxically, however, our income levels are much lower, and unions in our country often operate on behalf of employers’ interests and not those of the majority of workers. And there is no authentic respect for the autonomy of unions.

We are part of the process of change in Latin America. We have scheduled several events bringing together international energy workers. We try to support the workers of France, who are defending their retirement system, and the Peruvian people who are being massacred. We just signed a statement opposing the attacks on the Indigenous Zapatista communities by paramilitary groups linked to the political elite in the state of Chiapas.

Creating a Class-Conscious Membership

Before the government’s attempt to destroy the union in 2009, we had a school for union activists, organized by retired colleagues with a political background. All union representatives had to participate in this mandatory training school. We had an escalating series of general modules, from the history of the labor movement and of our union to the study of political economy, historical materialism, and Marxism.

When I held the position of departmental representative, I was a rank-and-file underground distribution worker in the underground cable department. As soon as I began to represent my colleagues, I immediately began to attend these classes.

Trainers came from the national university and other higher education institutions, like Alejandro Álvarez and Andrés Barrera. We had workshops on the human right to energy. But it was often a very stuffy, dogmatic education, in the sense that reality was interpreted with the eyes of the past. The proof of the dogmatism was that the teachers who taught those classes were among the first to give up when the government attacked us in 2009.

What had to be done was to create theory and practice based on new challenges and conditions—a new situation with new goals. The challenge is to understand the reality we are living in, and use Marxism as a methodological tool to interpret and change it. What happened 100 years ago can’t just be duplicated now. There are many changes in the economy, in politics, in ideology, that need a contemporary analysis from a revolutionary perspective, trying to formulate an alternative.

We are capable of creating and recreating revolutionary ideas based on the needs of our time.

We are going to reactivate and restructure the school for activists. We have to deal with the reality of generational change, and make sure our leaders have the tools and knowledge that will allow them to give the right direction to our union.

We have scholarships for the children of workers who belong to the union. We call them the children of the resistance, the sons and daughters of the workers who resisted the extinction of our source of work and the forced dissolution of our union during the past 14 years. We are incorporating them into our training program. They get an introduction about unions, and then an explanation of how our union was born and its history over 100 years. We talk about the most important moments of struggle, how we created a process of resistance to prevent its disappearance, and our perspective for the future.

This article from the North American Congress on Latin America (NACLA) is an abridged version of a UCLA interview series. The full-length conversations were published by the Institute for Research on Labor and Employment (IRLE), the Labor Center, and the Center for Mexican Studies at UCLA. 


Unions Can’t Be Rebuilt Piecemeal. We Need

to Go Big.

The 1930s rise of the Congress of Industrial Organizations led to millions of people being union members for the first time. The lesson of the CIO is that it’s necessary to harness the collective power of the working class on a grand scale.
March 11, 2024
Source: Jacobin

CIO workers on the picket line at a mill in Greensboro, Greene County,

 Georgia, May 1941. (Jack Delano / Library of Congress via Wikimedia Commons)

Erik Loomis is a professor of history at the University of Rhode Island and the author of A History of America in Ten Strikes (New Press, 2018) and Empire of Timber: Labor Unions and the Pacific Northwest Forests (Cambridge University Press, 2016). Loomis presents here a strong case in favor of the idea that the CIO did about as well as it could do to exploit the political-economic conditions of the 1930s.


In Loomis’s view, the CIO harnessed the disruptive power of the sit-down strike, a tactic that Loomis argues was difficult to pull off successfully and understood its perception by a public that believed in the mythology of private property. They profited from the investment of the communists, even though the communists’ contributions were mixed. And against those who say they should have helped found a labor party, Loomis argues that their investment in the Democratic Party paid off handsomely in neutralizing the typical business-government collaboration.

Loomis concluded our interview by emphasizing the importance of going big. In many ways, our present moment is one of lowered political horizons, and it’s easy to retreat to small-scale, local, or personal projects. But the lesson of the CIO is that it’s necessary to harness the collective power of the working class on a grand scale.


Benjamin Y. Fong

What was the CIO, and what is its primary historical significance?


Erik Loomis

The CIO, the Congress of Industrial Organizations, was the first large-scale attempt in American history to organize the large industrial workplaces on an industrial union model. It succeeded, by and large, and then remerged with the American Federation of Labor (AFL) in 1955. The significance of this can hardly be overstated. You had millions of workers that the AFL either could not, or in many cases would not, organize, who were demanding economic justice and were desperate for unions.

And so the CIO, under United Mine Workers of America leader John L. Lewis, broke away from the AFL in 1935 to start an alternative federation that was dedicated to mass-scale organizing. The CIO also wanted to be involved in electoral politics in a way that the American Federation of Labor had been reticent to be, going back to its founding in 1886.

Again, in terms of this broader significance, the CIO led to millions of people being union members for the first time. It led to the American working class rising in their economic power. It led to the labor movement being a core part of Democratic Party politics. It led to the attempts, some of which were successful and some of which were not, to influence basically all parts of American society, including parts that do not seem directly connected to the labor movement. And by and large, it brought the American working class into an era of prosperity that it had never seen before, and arguably has not seen since.


Benjamin Y. Fong

For roughly fifty years until the CIO broke from it, the AFL was the labor federation in the United States. And given its craft orientation, it was narrow and limited in its aims. How did this narrowness constrain previous moments of upsurge?


Erik Loomis

Yeah, it’s not as if the CIO came out of nowhere. You had half a century of radical and mass-based organizing that appeared from time to time, particularly in 1919 when there’s a huge upswelling of labor activity, and the AFL simply was not willing or able to take advantage of that. So with the AFL, you effectively have a vacuum in American labor because it is so backward-looking.

The AFL is really an organization of the nineteenth century. It’s a movement that in some ways was already dated when it was founded in 1886. It’s a movement that’s based on the idea of a worker, particularly an Anglo-Saxon worker, whether that was a native-born American or perhaps an English immigrant, like AFL leader Samuel Gompers was, who stood up for himself and with his fellow workers in his very specific job in order to maintain an independent manhood that would not be pressed down by companies or by the government.

The AFL aimed to protect people who were skilled workers in very specific jobs, people who bore an identity by which they could organize themselves to protect their interest as these very specific workers with very specific needs. This meant lots of different kinds of unions, even at one workplace. So even railroad workers, for instance, organized into brotherhoods that were specific to the job, not as railroad workers per se.

The AFL also simply would not organize women. It would not organize African Americans, by and large. It would not organize Asian Americans, and in fact it actively attempted to halt the organizing of Asian Americans. It would not organize children, who were a big part of the workforce. And it really was quite hesitant in organizing a lot of the Eastern European laborers. And so, you have a scenario in which you have these moments of uprising, but there’s no institution that’s willing to actually work with these people in order to get them a union, get them a contract, and get them that kind of dignity that they deserve.

Occasionally you would have some group organizing, and that group would be moved to one of the established unions, a union that claimed jurisdiction over this particular industry, and then that group would be given second-class status within that union because it didn’t fit the politics of a conservative labor movement. It might have been ex-IWW [Industrial Workers of the World] people, for instance. In those cases, maybe the group would not be given voting rights in the union because leadership was so determined to maintain this backward-looking, nineteenth-century vision of labor. It’s amazing that this goes almost unchallenged within the labor movement until the 1930s.

In the heart of the Great Depression, the AFL was actually opposed to unemployment insurance for workers. The idea behind this for the AFL was that anything that’s not negotiated in a contract could be taken away by the government, if it’s given by the government. Maybe there’s some truth to that. But they also just didn’t like dependence, especially on the government. They thought it would undermine the autonomy of the single male worker. This ideal led it to support positions totally disconnected from the realities of the Great Depression.

It really took an extremely rare rank-and-file rebellion within the American Federation of Labor just to get the labor movement to support something like unemployment insurance, which eventually would become law. So, the AFL was really just, in many ways, hopelessly out of touch in the 1930s.


Benjamin Y. Fong

Aside from breaking with this backward-looking vision, what else made the CIO successful?


Erik Loomis

It’s a combination of tactics and context. The reality is that I think it would’ve been very difficult for the CIO to do this at a different time in American history. But the Great Depression, the wholesale rejection of the Republican Party in 1932, and the election of Franklin Delano Roosevelt really opened up new opportunities for legislative change. I think that one of the real binding issues in American labor history, especially when compared to Western Europe, is that employers and the government have really worked together to crush unions. And the number of unions that have succeeded in the face of the government just openly siding with corporations is very small.

In some of the core CIO victories, the corporations basically expected these newly elected Democratic governors or FDR himself to send in the military to crush the strike. And these Democratic governors wouldn’t because they had been elected with worker support. That really changes everything. And so, some of it is the fact that this happened at a moment in which workers, and just Americans generally, were so angry at the system that they elected really brand-new people with brand-new ideas.

Another factor here was a fear of communism among the American labor movement. Key foundational figures in the CIO, such as John L. Lewis, were concerned that in the vacuum of not having unions for all of these industries, the communists were going to be able to come in and successfully organize them outside of the labor movement and into real left-wing radicalism. Certainly, the communists had some success in this before the CIO, including unemployment marches in 1931 and ‘32, and with the gigantic uprising of workers in 1934, which spurred the Roosevelt administration to pass the National Labor Relations Act in 1935.

I think another key point here is that Lewis was the head of the [United] Mine Workers, which was really an exception with the AFL because it was an industrial union. Because so much of the coal was consumed by the steel industry, there was really no way that Lewis could create long-term unionization and a strong organization in the Mine Workers without also organizing steel workers. The AFL was not really willing to engage in that kind of industrial organizing to create what would eventually become the Steel Workers Organizing Committee, and later the United Steelworkers of America within the CIO. So Lewis was also acting to promote his own interests and the interests of his union in creating similar kinds of models. When the AFL simply refuses to play along, Lewis finally leaves.


Benjamin Y. Fong

You talked about the combination of context and tactics. One of the key tactics that the CIO moment is known for is the sit-down strike. What did this tactic mean for the emergence and success of the CIO?


Erik Loomis

I think that the sit-down strike is one of these tactics that can be romanticized, outside of its appropriate context. But the Flint sit-down strike is the key moment, with workers occupying parts of plants, and it did change the equation to a certain extent. People have debated where exactly sit-down strikes began. Maybe the US, maybe Europe. But it was an occasionally used thing until the mid-‘30s.

In Flint, you have a pretty organized group of workers occupying Fisher Body Plant no. 1, which was a General Motors (GM) facility. By sitting down and staying in there, the idea was that first, it would show workers’ responsibility. They would do this but do this in a respectable way. And so, drinking wasn’t allowed, and they were very clean. A lot of the early examples of the sit-down strike really emphasized this respectability narrative. But it was also just an effective tactic. It would prevent strikebreakers. The problem with the traditional strike is that you leave the factory, and even if you have pickets around the factory, generally the courts and the police were working on the side of the companies, and so would basically force the allowance of strikebreakers into the factory. The sit-down was intended to prevent that. The idea, at least theoretically, was that a company would not want to destroy its own facility.

However, it’s worth noting that GM would’ve been happy to destroy its own facility. GM wanted the police to go in and kick those people out at any cost. And this is, I think, a key part of this broader story. The reason that it doesn’t happen (and it’s worth keeping in mind that the Flint police force was completely bought and sold by GM) is that the workers of Michigan had elected a guy named Frank Murphy to be governor. Murphy had campaigned on never betraying workers. He had said would not use the police or the National Guard to break a strike. He’s close to FDR and is a good strong liberal governor, but nobody really knows how he’s going to react to this. In fact, he has a panic attack as it all goes down.

But in the end, although GM is demanding that he call the National Guard, he refuses to do it. It’s really only after he refuses to call the National Guard that GM sits down and says, “Okay, we give up,” which again goes back to the issue I mentioned earlier. If unions can neutralize that government-corporate alliance (and you can’t really ever expect government to be on the side of unions in the United States, that’s really rare), so they don’t call in the cops or the army, then it really changes the whole perspective.

So that tactic got a ton of play, and you saw different versions of it pop up very quickly. But it’s worth noting that it’s a very, very difficult tactic to pull off. If we’re going to talk about Flint, it’s probably also worth a brief discussion of the failed attempt by a newly forming union with the CIO called the United Chocolate Workers to use a sit-down strike at its plant in Hershey, Pennsylvania, in the big Hershey plant. This was a complete and unmitigated disaster, in part because they did not have the political support, in part because Hershey bought his milk off of local farmers. The local area was completely opposed to it, versus the solidarity culture you had in Flint. And in fact, the United Chocolate Workers never organized that plant.

So if we’re thinking about the sit-down strike, we do need to understand that it has some pretty sharp limitations to it, and by no means worked in all cases.


Benjamin Y. Fong

Part of the CIO leadership’s skittishness about the sit-down was that they felt the public was turning against this tactic. Why was that?


Erik Loomis

People turned against the sit-down strike in part because it felt like an attack on private property. We have to understand that unions were not exactly popular among the American people as a whole. I think this is always worth noting, that even at the very peak of the labor movement, huge parts of the country were effectively totally unorganized. This will come back to seriously haunt the CIO down the line.

What you have here is a lot of Americans who strongly believe in this mythology of private property, and that very much includes many union members and the leaders of the labor movement. Some CIO lawyers were pushing a legal idea that people had a right to their job, that their job was a sort of property. Let’s just say the American courts were not very welcoming to this idea. And so, it really felt like, for many Americans, that this was a radical tactic that was perhaps communist — sometimes it was and sometimes it wasn’t — and that really threatened the core identity of an America that defended private property.

Truth be told, the Supreme Court simply declared the tactic unconstitutional in 1939. So one of the reasons that you don’t see it today is that it’s outright illegal. If we’re talking about sit-down strikes in the present, first of all, rather than just romanticize it, I think we have to consider, first and foremost, is this a good tactic? Would this actually work in a given workplace? And then secondly, what are we going to do about the fact that it’s illegal? Now, that doesn’t mean that we shouldn’t do that. I’m not making evaluations or judgements here, but the fact is that the courts declared it unconstitutional.


Benjamin Y. Fong

You just mentioned the geographical limitations of the CIO, and they did try to expand, specifically to the West and the South. How did its western venture go?


Erik Loomis

Being located mostly in a fairly small number of states, one of the CIO’s strategies was to expand to other parts of the country, and the West Coast made sense. The West Coast had a relatively robust union tradition, at least compared to, say, the Great Plains or the South or other places where it really needed to expand if it was going to succeed in the long term.

But what the West Coast really lacked, at least until World War II, was the large-scale industries that the CIO is really based upon. These West Coast unions are mostly pretty small. They’re longshoremen, which are people who load and unload boats. They’re timber workers, but there’s not a River Rouge in the timber industry. There are some big companies, and then there are a ton of tiny companies, but there’s not a gigantic space for organizing, which really was something that, say, the UAW [United Auto Workers] or the steelworkers were able to take advantage of.

There were miners, farmworkers, and a lot of them had very strong communist ties, or at least radical ties. There are still, in the ’30s, remnant IWW members in some of these areas. And that’s really the last place that the IWW had people identifying like that. And so, it’s a weird fit. Culturally, it’s a weird fit. Their politics are very different. The structures of work are very different.

This changes somewhat when the auto, airplane, and shipbuilding industries begin to move out to California in World War II. But in those early years, yeah, it’s unions with a really strong radical edge, many of which had a lot of former IWW members in them. This did not always go over very well with Lewis, but to some extent, it also didn’t go over well with some of the other communists operating in places like New York because West Coast socialism was of a much more independent character.


Benjamin Y. Fong

What do you see as the more general limitations of the CIO project?


Erik Loomis

There’s a bunch, but one again was an inability to organize in large parts of the country. I think it’s worth noting that in 1955, half of all CIO members were in five states, and there were almost none in many other states. So there were some structural problems, certainly.

The CIO also just stalled out. It hit fast, right away. It wins at GM, US Steel, Chrysler, but that’s it. Even when FDR was unwilling to send in the military, like in Little Steel, which was not so little despite its name, the companies would resist unionization with violence. The head of one of these companies, a guy named Tom Girdler, was basically buying up all of the poison gas he could get to potentially use against workers. In fact, he is responsible for the Memorial Day Massacre in 1937. This puts a limitation on that first big wave of organizing.

In many ways, World War II is what puts the CIO over the top because FDR and the Roosevelt administration are determined to be as close to strike-free as possible during the war. And so, they come up with these deals in the National War Labor Board that effectively institutionalize the CIO by forcing these recalcitrant companies, such as Ford, Little Steel, and a lot of others, to acquiesce to having a union. But when the union wins in that way, you don’t necessarily have a culture developed that’s going to continue to create union militancy.

It should be said as well that these are very top-down organizations. Lewis was top-down as you can possibly get. So a lot of the CIO unions were very undemocratic and really did not have a lot of interest in allowing workers to control the agenda from the shop floor up. So there are some internal issues as well, and there are battles between communists and non-communist workers too that will eventually play a pretty big role in undermining the CIO.


Benjamin Y. Fong

Some historians believe that there was a widespread anti-capitalist mood at the time that the CIO played a role in constraining. What do you think of this idea?


Erik Loomis

I tend to be skeptical of that kind of statement. I think it’s very easy for left-leaning historians of the movement to want to read a lot into this history that maybe isn’t there. I think there’s plenty of reason to be skeptical that there was large-scale, true anti-capitalism among the American working class. I guess that would run straight up against what we were just talking about earlier with the reaction to the sit-down strike, which was not popular even among all workers.

We know now as well that there was significant disagreement and infighting in locals, sometimes fighting between communists and non-communist workers. Certainly, especially during the war, the communists were very good at maintaining control and dampening any kind of working-class uprising. That’s for sure. But I don’t know that you would have had a significantly more radical and more sustained movement if the communists had not played that disciplinary role.


Benjamin Y. Fong

Another claim that’s often asserted about the CIO moment is that they should have invested more in founding a labor party. Was the CIO too invested in the Democratic Party? Or was the Democratic Party what made possible the CIO?


Erik Loomis

I tend a little bit more toward the latter on that. I mean, I’m very familiar with those arguments. I don’t think they make much sense. In truth, the number of successful third-party movements in American history is almost zero. And I think people who want more of a multiparty democracy often will push this kind of a line. But within the winner-take-all structure of American politics, I don’t know that it really would’ve been very effective.

It may have led to other outcomes in certain places. Let’s say, in Detroit, not working within the Democratic Party may well have led to scenarios by which you have more radical people get elected to be mayor or congressperson. In areas that are truly dominated by one political party, going an independent route is a way to create a difference between the radicals and the more moderate or conservative Democrats. So, there, at the local level, I think there was some potential.

Now, it’s fair enough to say that the CIO never really grew to be more than a junior member of the Democratic Party. Despite all the work that people like Sidney Hillman did, despite people like Walter Reuther really trying to create a Democratic Party that took labor’s concerns seriously, as in postwar France and England, it didn’t happen. It’s easy to look back and say, “Well, that was a mistake,” and that a Labor Party would’ve made a difference. But again, I’m not really sure that it would’ve, because I don’t know how it would’ve operated in any way that would’ve been particularly useful.

Moreover, I don’t think that it would’ve attracted the number of workers that a lot of people think that it might have. Working-class people have multiple interests in their lives. If you look at, say, the big UAW plants in the late ’30s and ’40s and into the ’50s, there are a lot of Southern workers in those plants. They’re both black and white, and part of this migration north. Many Southern white Democrats who are moving up north have very close ties to the Democratic Party for historical reasons.

I think it’s projecting to say, “Oh, the workers are there for the picking. Large numbers of these workers would’ve voluntarily joined a labor party, and it would’ve been successful.” I don’t really see that. Again, if you look through American history, when have unions had success? It is when they’ve been able to neutralize that government-business alliance. And that’s one thing that having the CIO within the Democratic Party was at least partially able to do. Not fully, but partially, and it was a big reason for their success.


Benjamin Y. Fong

How would you describe the communists’ role in the CIO?


Erik Loomis

Well, it’s a very complicated role. There’s no question that communists were able to organize some of the most effective unions in the CIO. Unions on the west coast and smaller unions like [the Mine, Mill, and Smelter Workers], which was active in Southwest mining, largely organizing Mexican miners. These unions did a great job in bringing economic justice to workers who were really marginalized. These were areas that even other CIO unions were really not going to go in and organize. They were also influential within some UE [United Electrical, Radio, and Machine Workers] locals, and at the UE national leadership level. So there were spots within the CIO in which the communists made critical and very important changes.

But I think that the communists also hurt themselves a lot. That’s a big part of the story too. There was a whole debate in the ’70s and ’80s. People had said that the communists in the United States were taking orders from Moscow, and others called them a bunch of red baiters. And then the archives opened in Moscow, and lo and behold, they were in fact taking orders from Moscow.

I think it’s important that we recognize this, especially when you’re talking about the foreign policy issue as we’re moving toward World War II. When the orders came from Moscow to change positions on the war, especially around Germany, other workers were like, “What the heck is going on here? Yesterday, they said this. Why?” Workers thought they were being gaslighted at that point.

So you have a lot of workers who were at one time favorable to a lot of what the Communist Party was doing in their union, these workers stop trusting them. Communists were also running tickets for locals. I’m not blaming them for this; it’s legitimate to run a ticket in an election. But the non-communists who might have lost those elections sure felt empowered to complain to the government that communists were taking over their locals. When the Dies Committee starts in ’38, which eventually becomes the House Committee on Un-American Activities, these non-communist workers complain about communists that have taken over their unions. So it’s a complicated scenario.

At the same time though, the communists also did more than almost anyone else to bring black Americans into the CIO. This is also really important to recognize because one of the other limitations of the CIO in the broader scheme was division by race. Even if leadership was pro–civil rights, that sure as heck didn’t mean the rank-and-file were. The Detroit hate strike in ’43 had UAW members participating. There’s lots of examples of that going on in the ’30s and ’40s. There’s a racial division that the CIO had to deal with. In some unions, like the Packinghouse Workers, the organizing really becomes a combination of both labor and racial justice.


Benjamin Y. Fong

The CIO rejected the AFL’s racist and exclusionary practices, but how did it approach issues of racial and ethnic division?


Erik Loomis

It was really hard when CIO leadership, whether at the international level or at the local level, tried to take on racial issues. It would tend to be over things like hiring on the job, but also issues like public housing, which the CIO was very heavily involved in, that you would sometimes see really significant rank-and-file reactions against leadership for doing things like trying to create desegregated public housing.

Public housing was supposed to be for the workers, the white workers, or so they believed. Then black workers were moving into Detroit, Chicago, or Milwaukee, and these white workers revolt against their own unions. You see this on a number of occasions as early as 1940 or so. You see workers actually vote for Republican candidates based on a white-backlash ticket over the issue of desegregating public housing. This is just after they won the UAW.

So, it’s not necessarily a deep alliance, and this is something that union leaders have to take on very carefully. It’s not that long before this that a lot of these industries — steel, mining, and a couple others — are incredibly divided by ethnicity between different white ethnic groups. These divisions had gotten in the way of organizing in, say, the mining industry. And so, the race and ethnicity issue is really tricky.

By the ’30s, packinghouse work, which was such difficult work, had become a pretty heavily black industry. In that scenario, because of an already relatively high level of black labor in that industry after 1919, creating more of a multiracial union fighting against segregation made some sense and could be effective. But in other areas, like some of the UAW locals, again you had large numbers of migrants coming up in places like Kentucky and West Virginia and Tennessee, with long histories of white supremacy. So okay, yeah, they’re activated on class now, to a certain extent. They’re voting. They’re becoming strong union members and all of this, but that doesn’t necessarily mean it was going to cut against their racial prejudices.

A lot of this is around hiring after the March on Washington Movement forces Roosevelt to desegregate industries that are doing defense work, which is basically all industries in the war. So you begin to see, say, African Americans hired for jobs other than as janitors and the like. And white workers often react very negatively to that.

So for leadership, it was very much a walking on eggshells thing. It’ll continue that way. We know, for instance, that Walter Reuther, head of the UAW, helped to pay for the March on Washington. He speaks at the March in 1963. And UAW locals are furious about this and rejecting proposals to desegregate jobs. So it’s always a real challenge for pretty progressive union leaders on race.


Benjamin Y. Fong

When would you say that CIO moment was over?


Erik Loomis

You could say that by 1949, when the communists began to be expelled, that whatever potential the CIO had, it’s gone by then. It’s only a few years before the merger. But you could also argue that by ’41, the potential was gone when they bought into the war. Or in 1937, when they lost to Little Steel.

You can make arguments for any of those dates. I would say though personally that the strongest argument is for the later date, for ’49. In the end, the CIO existed to organize people on an industrial basis within the American capitalist system. And during World War II, it was very successful in doing that. These unions became financially secure, which was a real issue.

I don’t think it’s a failure to be involved in the government in the way it was. In some ways, this is what these organizers had wanted. I think that if we look at the CIO as little more than a radical challenge to capitalism, then yeah, I think it makes sense maybe to argue for these earlier dates. But the ultimate goal of the CIO was still in the air during the war and then immediately after the war with the strike wave in 1946.

But the passage of Taft-Hartley in ’47 — which makes a lot of what the CIO had done in the early days illegal, things like sympathy strikes and such, as well as creating right-to-work and forcing communists out of the unions — and then in ’49when that really happened, that’s the end of the CIO moment.

I think the eviction of the communist unions was probably inevitable. I don’t think there’s actually a way that the American labor movement survives in any form that it looks like today if this doesn’t happen, because you have to remember that it’s not just that Taft-Hartley passed, but it passed with overwhelming support that was massive. It overrides [President Harry] Truman’s veto. It’s not like it was close.

So, the unions had very little support in American public life in 1947. It’s very easy, I think, to say, “Well, the CIO screwed up by evicting the communist unions.” Maybe it did. Maybe it didn’t. Maybe they needed to do that just to survive. But I think it is safe to say that by undercutting the radical edge of organizing, the actual reason for a CIO to exist anymore is pretty much gone, because they’re just not organizing in the same way after 1949.


Benjamin Y. Fong

What lessons does the CIO moment have for the present?


Erik Loomis

I would really focus on the issue of bigness. We are in a moment in which there’s a lot of emphasis on individual autonomy and small-scale change and things like, I don’t know, organic food and symbolic gestures.

In labor circles, I think that’s led to a kind of romanticizing of the IWW. That’s an organization that a lot of particularly younger people look to as an inspiration. And there’s some good reasons for that. Certainly, the cultural productions were amazing. They did great visuals. And there was a focus on a kind of decentralized, individualized way of making change without compromising with the state or anything like that.

I don’t have any particular problem with this except to note that it was an abject failure. The IWW never really succeeded in American life. And where it did, it disappeared almost immediately after that success. There’s not a lot of evidence that you can organize the American working class based on individualistic means.

The CIO brought collective power to the working class. The CIO brought millions of people into a movement by organizing big companies all at once and moving into industries that had never had unions before. And all of a sudden, there are millions of union members in an industry.

If we’re going to succeed in building a labor movement, rebuilding a labor movement today, it’s going to happen through size and power. There’s a lot of interest in independent unions that are going to keep independence from those big union bosses or whatever. You’re never going to build the American labor movement back that way. There are too many workers in America to rebuild the labor movement in groups of twenty or thirty or even one hundred. You need thousands and thousands of people to be joining the labor movement at the same time, which is what the Teamsters, for instance, are trying to do with Amazon. It’s why SEIU [Service Employees International Union] is trying to fund movements that would organize Starbucks and things like that, because they know they’ve got to target the big industries.

I think bigness is not something that a lot of Americans are very comfortable with today. Bigness is the way of the future if we want to actually have the kind of collective power that we need to make the change. That, to me, is the lesson.