Whyalla steelworkers accept wage cut in second vote

Workers at the Whyalla steelworks have voted to accept a 10 percent pay cut, four weeks after rejecting the same proposal. Owned by mines and minerals company Arrium, the steelworks are the main employer in Whyalla, four and a half hours outside Adelaide.

Arrium has been under the control of administrators since April, after its profits were hit by collapsing global steel and iron ore prices and a series of failed investments. A global overproduction of steel has created a crisis that threatens thousands of jobs in Australia and hundreds of thousands more in China and Europe.

Arrium administrators KordaMentha pushed for the pay cut to make the steelworks more attractive to potential buyers.

When the workers first voted on 24 August to reject the wage cut, trade union officials, KordaMentha and the corporate media were taken by surprise. Contrary to the rhetoric that Arrium’s crisis is a “community issue”, workers know that they’re the ones taking the fall for the failure of the market.

Their pay packets have already shrunk significantly over the last 12-18 months, and they are angry that the administrators and bosses continue to be paid handsomely while they’re expected to prop up the company.

Arrium’s workforce might also remember the fate of South Australia’s car manufacturing workers, who in 2013 accepted a three-year wage freeze and significant cuts to conditions because they were told it would save their jobs. Only months after agreeing to the cuts, workers learned that Holden was pulling production out of Australia anyway.

But KordaMentha refused to accept the workers’ first decision. The media lambasted the workers’ temerity, while politicians like Nick Xenophon declared that workers must “understand how difficult things are” and “do their bit”.

The pressure was likely compounded by the policies of the major parties, which have both said that any government support to keep the steelworks open would depend on management cutting production costs. The unions chimed in to agree. Scott Martin, Australian Workers’ Union Whyalla branch secretary and Labor Party candidate in the recent federal election, openly admitted that the unions had folded, telling the media, “There needs to be a pay cut; the question is how deep that should be”.

After the wage cut failed to pass the vote, officials from all unions representing Arrium’s workers – AWU, AMWU, CEPU and CFMEU – met and quickly agreed with administrators that a second ballot should be held. By playing on workers’ fears about losing their jobs and their community, KordaMentha got the pay cut over line, 67 percent of the steelworkers voting in favour. Arrium’s mineworkers also voted for the cut and will now join the steelworkers on a single cut-price enterprise agreement.

This is the latest in a string of “sacrifices” imposed on Arrium’s workforce. More than 1,000 jobs were cut last year as the company mothballed large parts of its South Australian mining operations. KordaMentha has made it clear that further restructures are on the cards, suggesting that it may have plans for more attacks on wages and conditions. Its blackmail strategy has proven effective to date and will likely continue to feature in future dealings with workers.

With union leaders backing the administrators’ stance, there are reports that some workers have left their unions. Decades of attacks on jobs, wages and conditions, coupled with the retreat of the union movement, have left many workers feeling like they’re over a barrel. “It is a gamble either way”, wrote one Arrium worker on a campaign Facebook page. “Our choices are take a pay cut and lose our jobs or not take a pay cut and still lose our jobs.”