Despite the workers’ will to fight, the IG Metall union organizes a clearance sale in the German steel industry
Despite the workers’ great will to fight, the IG Metall union and the employers’ associations have agreed on a massive reduction in the real wages of the 68,000 steelworkers in the northwest, even if the companies are making record profits. The new contract should also be adopted for 8,000 industrial workers in East Germany.
Metalworkers will receive 6.5% more pay over an 18-month period. The salary increase comes into effect on August 1 and runs until the end of November 2023. For June and July there is a one-off payment totaling €500.
The agreement is equivalent to a 4.3% annual wage increase, which is only half of the demand of 8.2% over a one-year period that the union had initially put forward in negotiations. And even that would have barely covered inflation, which was 7.9% in May according to the Federal Statistical Office.
If inflation remains at this level, the cost of living when the collective agreement expires will be 12% higher than today. Metalworkers would therefore have to accept a real wage loss of 5.5%. However, experts believe that prices are likely to rise even faster and that the official inflation rate does not adequately reflect real price increases, which are particularly high for basic necessities like food and fuel.
At the same time, workers in the steel industry have already suffered significant income losses in recent years. For three years, there has been no percentage increase in base wages, with workers being pushed to one-time payments. Accordingly, the 6.5% increase will be applied to the 2019 salary level.
IG Metall agreed to the deal in the fourth round of negotiations despite – or because – the will to fight was extremely high. The steelworkers concerned were unanimous on the need for a substantial increase in wages. This was also demonstrated by the warning strikes in which, according to the union, around 28,000 workers from more than 60 workplaces have taken part since June 1. On Monday alone, more than 11,000 workers took part, the majority of them in Salzgitter (3,500) and Duisburg (2,100).
In recent years, several thousand jobs have been lost in the steel industry. IG Metall and its representatives on the works council have repeatedly imposed pay cuts on workers by concluding company-by-company agreements rather than a sectoral contract. The reason given was that steel produced in Germany would not otherwise be competitive on the world market.
Works council leaders, such as the chairman of the general works council of Thyssenkrupp Steel Tekin Nasikkol, hypocritically claim that these job and wage cuts guarantee “job security”. Under Nasikkol’s watch alone, some 4,000 jobs have been destroyed in the past three to four years.
All for the sole purpose of maintaining profits. Witness the example of the 2,400 steel tube workers at the Vallourec factories in Mülheim and Düsseldorf, whose factories will soon be closing. While Vallourec employees participated in warning strikes, the works council is “fighting” for a “socially acceptable” closure of the factory.
During the coronavirus pandemic, steel workers have risked their health and their lives working for almost the entire period in aggravated conditions. Where short-time work due to the pandemic-related drop in production has occurred, particularly in the automotive industry, they have suffered wage losses.
Since the government lifted all COVID-19 restrictions as part of its profit-before-death policy and the war in Ukraine led to higher steel prices on the global market, corporate profits steelworks exploded again.
Industry leader ThyssenKrupp posted a profit before interest and tax of 495 million euros for its steel division in the first quarter of the financial year, after a loss of 161 million euros in the same quarter last year. The second largest steel producer, Salzgitter AG, posted an annual profit of 753 million euros for 2021 after a loss of 119 million euros the previous year.
The war in Ukraine and Germany’s rearmament expenditure of 100 billion euros are popping champagne corks on the boardrooms of steel companies. Steelworkers now produce steel for tanks, submarines, and warships. ThyssenKrupp also benefits directly from the construction of submarines and ships through its subsidiary Marine Systems (TKMS), headed for several months by the former regional director of IG Metall, Oliver Burkhard.
With the prospect of siphoning off a large part of the 100 billion euros, TKMS has meanwhile taken over the bankrupt Wismar shipyard and wants to become heavily involved in the production of warships. Of the 3,000 former shipyard workers, 800 are to remain, and later the number is to rise to a maximum of 1,500.
If corporate leaders like Burkhard have their way, workers will still have to foot the bill for superprofits. During the first round of contract negotiations, the steel companies had offered to subcontract workers with a one-off payment of €2,100, like that of the chemical industry. In the third round of negotiations on Friday last week, they then offered to raise wages by 4.7% for 21 months.
On Monday evening, the fourth round of negotiations began in Düsseldorf. IG Metall had threatened a ballot and indefinite strikes if the employers did not move. This was an attempt to deflect the growing will of the steelworkers to fight. It was the usual uproar of the bureaucracy before accepting the clearance sale.
When 3,000 steelworkers demonstrated outside the ThyssenKrupp steelworks in Duisburg last Thursday, the chairman of the general works council, Nasikkol, spoke of historically high inflation and high corporate profits. Whenever he or shop steward Klaus Wittig even hinted that there would be an indefinite strike if their demands were rejected, the steelworkers backed him up loud and clear.
But IG Metall was not planning to ask companies to pay to improve the wages of steelworkers. IG Metall leader Jörg Hofmann, who also spoke at the Duisburg rally, demanded a “fair offer from employers”.
The next day an interview with Hofmann appeared in the Suddeutsche Zeitungin which he clarified that IG Metall worked closely with corporations and the government to defraud workers, in order to benefit corporate profits and the government’s war chest.
He explicitly rejected the claim for compensation for the high level of inflation and said: “IG Metall is acting reasonably. We have the good of the whole country in mind. By this, the leader of IGM, who should reap as much in a month as a metallurgist earns in a year, means stock prices and company profits.
For years, German and international experience has shown that wages and jobs cannot be defended if unions control and can plan attacks on workers together with employers’ associations.
IG Metall responds to the growing social crisis – the enrichment of a tiny layer of billionaires and the militarization of society, on the one hand, and the growing radicalization of workers in factories and offices, on the other – by working even more closely with boards and government. He uses all his apparatus to quell the rising workers’ rebellion.
To win, the metalworkers must break organizationally and politically with the unions. The Sozialistische Gleichheitspartei (Socialist Equality Party) advocates the creation of independent grassroots action committees in every workplace. They must organize the fight against inflation and wage cuts, factory closures, layoffs and social cuts, and establish links with workers in other places and countries.
The companies operate internationally. Workers can only successfully oppose it if they also unite internationally. The International Committee of the Fourth International and its affiliated Socialist Equality Parties launched the International Alliance of Rank and File Committee Workers a year ago to create “a framework for new forms of independent and democratic workers’ rights in factories, schools and workplaces around the world.
We call on all workers who are unwilling to pay with their wages, labor, health and lives for war, militarism and filthy shareholder enrichment to contact us.