USWA stands by as 95,000 lose medical coverage
By Lee Sustar | February 14, 2003 | Page 11
SOME 95,000 retirees at bankrupt Bethlehem Steel are set to lose health care benefits March 31--and their union isn't lifting a finger to fight it. The United Steelworkers of America (USWA) President Leo Gerard did denounce the cutoff as "morally callous" and a "disgrace."
But the elimination of retiree health care--along with an earlier hand-over of the pension plan to a government agency--was a condition for the takeover of Bethlehem by International Steel Group (ISG), a company formed by Wall Street financier Wilbur Ross.
Just two days after a bankruptcy court judge okayed the health insurance cutoff, ISG signed the deal to buy Bethlehem for $1.5 billion. "We are thrilled," Ross said.
Far from being shocked at the cutoff, Gerard and the USWA leadership allowed it to happen. "The union has been well aware of Bethlehem's inability to pay its retirement health care on an indefinite basis," said Bette Kovach, a Bethlehem Steel spokesperson. "The union also supports the sale to ISG, and ISG doesn't carry health care insurance for retirees."
In fact, Gerard is working hand in glove with Ross to restructure the industry--at retirees' expense. As Business Week put it, Gerard "has put into motion a drastic industry restructuring almost entirely on the backs of his members. He is allowing the merged companies to dump most of the enormous pension and retiree health-care costs that weigh down an industry with 600,000 retirees--and only 124,000 active workers. It's the ultimate irony that after a long history of bitter clashes with management, it has taken a labor leader to salvage what's left of Big Steel."
Since taking over as USWA president two years ago, Gerard has established himself as a fiery speaker at global justice rallies. He spoke about the need to fight for jobs and fight for political issues such as national health care.
Yet in practice, Gerard has proved to be a typical business unionist, joining with employers in the "Stand Up for Steel" campaign that helped pressure George W. Bush to increase tariffs on a wide variety of imported steel.
Such measures, USWA leaders claimed, would boost industry profits and save jobs. But while profits did improve, the jobs went anyway. "There will be loss of jobs," Gerard told the Wall Street Journal. "But the union is showing its leadership by saving this industry and helping to reorganize the companies." In other words, the union is putting profits ahead of workers and retirees.
The cutoff of retirees at Bethlehem is a repeat of the collapse of LTV Steel, which eliminated pension and medical benefits for 85,000 retirees, widows and dependents in December 2001. ISG bought up LTV plants in Indiana and Cleveland, and later, Acme Steel. Before purchasing Bethlehem, ISG had a total of 3,200 workers--and had eliminated 40 percent of the former LTV workforce, allowing a huge increase in productivity.
USWA members at the plants are set to vote on a proposed new contract with ISG that includes pay raises but lets management pay just a token amount for retiree benefits. Under the deal, LTV retirees would receive some medical benefits from a trust fund tied to profits.
"We do not yet know how much money this will involve, and it will be some time before enough is collected to actually start providing benefits," a USWA summary of the ISG agreement admitted. "But it is our hope that the trust will accumulate sufficient funds to provide at least some kind of medical and/or drug plan for LTV and Acme retirees."
The deal is expected to be the model for a new agreement between ISG and the USWA for 13,000 workers on the Bethlehem Steel payroll. Industry observers expect ISG to seek elimination of many of those jobs. And for the 95,000 Bethlehem retirees, hope won't cover the gap between their current monthly $6 payments for health insurance to the $200 to $300 they would have to pay to maintain coverage.
USWA leaders say that retirees should be eligible for government-paid medical benefits under legislation designed to help workers left jobless because of the impact of foreign imports--but just what will be available remains unclear.
Retirees over age 65 can sign up for Medicare, which won't replace their prescription drug plans. And although LTV and Bethlehem pensions have been taken over by the federal government's Pension Benefit Guarantee Corp., the rash of corporate bankruptcies has turned an $8 billion surplus into a deficit of nearly $2 billion. The shortfall creates the possibility that benefits could be cut.
A real fight to save steelworkers' livelihood wouldn't look to corporate boardrooms for saviors, but an all-out mobilization of the labor movement to fight for jobs and real reform for health care benefits and pensions.
The steel industry was unionized in the 1930s only after decades of fierce and difficult struggle. The fight to save the union means reviving those fighting traditions today.