Port Kembla jobs ransom pays off for BlueScope

Workers at BlueScope Steel in Wollongong have been silenced as part of a deal struck between management and the union that will lose hundreds of jobs.

Arthur (not his real name), who has worked at the Port Kembla steelworks for decades, told Red Flag that he and his workmates had been made to sign confidentiality agreements. “Because fucking BlueScope Steel put a letter out, any leaks out on the media we get in trouble. They made us sign to say if anything comes out, instant dismissal.”

Arthur says that workers are angry that bosses are enriching themselves while workers pay with their jobs. “If there’s one thing I would want the public to know, it’s that they’re feathering their own nest big time”, he said. “And the people that make the money for them, they’re fucking [us] over.”

He says bitterness about job cuts is intensified by the knowledge that the company has done well in the last financial year. “They just made $130 million. They say they got no money – but about eight months ago the bosses gave themselves pay rises and bonuses. Then the CEO gave himself a $300,000 bonus while he’s sacking 500 people.”

On 24 August, the company announced its best financial return since 2008, and a net annual profit of $136.3 million (later upgraded to $180 million). In the same statement, BlueScope CEO Paul O’Malley warned that the company wanted more. He outlined BlueScope’s plan to hold thousands of jobs to ransom to get it – threatening to close the Port Kembla steelworks unless the unions delivered “game-changing” concessions and governments offered tax breaks. O’Malley set the savings target at $200 million and gave an eight-week deadline.

Eight weeks was all it took. On 9 October, the Australian Workers Union announced that it had brokered a new enterprise agreement with the company that included a three-year wage freeze, 500 job losses and provisions that will make further restructuring even easier.

On 26 October, the NSW government announced that, without any strings attached, it would allow BlueScope to defer a $60 million tax bill for up to 15 years.

According to Arthur, things have been tough at Port Kembla for some time now.

“They’re not training any new people. They won’t employ anyone … so if somebody goes, they’re not replacing them. It’s been like that for the last two years … They’d rather give you overtime than employ someone else because they reckon it’s cheaper.

“They just squeeze people more and more and more. This new boss we got, he’s fucking ruthless. All the people they’re bringing in are ruthless. And they’re starting to put cameras everywhere now … They always check on you to find a way they can sack you.”

Arthur’s guess is that BlueScope has been downsizing in preparation for a takeover, citing Japan-based giant Nippon Steel as a possible candidate. Nippon and BlueScope began a joint venture in value-added steel products in 2013.

Whatever the plan, it’s clear that management is pleased with the company’s positioning. In the pages of the bosses’ papers, commentators explained just how well BlueScope had done in extracting its price from workers and the government.

“If BlueScope chief executive Paul O’Malley wasn’t humming Lou Reed’s ‘Perfect Day’ as he jogged his way across the Sydney Harbour Bridge at dawn on [26 October], then there is something seriously wrong with him”, wrote Mathew Stevens in the Australian Financial Review.

Pulling back the curtain on the company’s strategy, Stevens continued: “What looks to have happened very quickly indeed, is in fact, the product of a crisis productively anticipated by BlueScope management and one that they were determined would not be wasted”.

After winning a surrender of this scale, management has every reason to be optimistic about how much more profits it can wring out of Port Kembla workers. BlueScope also has an ideal model to look to at its North Star steel mill in Ohio, USA.

On 2 November, for US$720 million, it bought full ownership of the North Star steel mill, in which it previously had a 50 percent stake. In the lead-up to the deal, O’Malley spoke enthusiastically about North Star’s “highly motivated and focused workforce”. Steelworkers at North Star stand to lose up to half of their pay if the company doesn’t turn a profit.

In a presentation to investors in 2014, North Star management boasted that its “high performance workforce is completely non-union and [the] company has never had to contend with collective labour contracts [or] work stoppages”.

Back at Port Kembla, where Arthur and all of his workmates are union members, the disappointment is palpable that the union didn’t put up more of a fight.

“The union are fucking suckholes too, man. The people are too scared to open their mouth because of all the bullying. The officials, they’re bound by government rules now, too. If you go on strike they fine you.

“The union should be there for every little fight that happens. They should be the first to be notified. But as soon as you go in there … [with] the bosses, they want nothing to do with it.”

Arthur and many others – mostly those like him, who are older and past the crushing burden of mortgage repayments – have put in for the voluntary redundancies provided for in the new agreement. But, he said, the bosses are scrimping right down to the bitter end.

“They say, ‘If you want to take the VR [voluntary redundancy] take it!’ Then they say, ‘You can only go at our discretion and on our terms’”, he said.

These older workers remember when the steelworks had a fighting union and a rank and file that could strike and could win. “The morale in the workforce is shit right now”, Arthur said.

Much has been made in the media about the union’s concessions being necessary to keep the fires burning at Port Kembla. But for steelworkers, the blast furnace isn’t the only flame that needs to stay alive if they’re to have a future.