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Lessons in ArcelorMittal layoffs

Published: 
Thursday, December 10, 2015

The layoff of several hundred workers at the ArcelorMittal steel plant not only brings home the reality of recession, but emphatically sends a message to trade unions that they have to change their negotiating tactics.

According to a statement issued by the company, ArcelorMittal was attempting to at least delay the layoff option by having selected workers take vacation leave from December to mid-January, as well as do alternative tasks. The Steel Workers Union of T&T has not denied this, but claims that the company took the decision to lay off the workers before the union could consult with its members and frame a response.

This, however, contradicts earlier statements from union leaders that ArcelorMittal was flouting contractual agreements by having workers perform tasks outside their remit. Now, the SWUTT is considering taking the company to court to challenge its decision to lay off workers.

The irony here is that the union itself seems to have been adhering to a legalistic approach in its negotiations with the company, with SWUTT’s labour relations officer Timothy Bailey telling the T&T Guardian that, “We said to the company legally we did not have the powers to send workers on any forced vacation.”

The reasonable inference is that the union did not recommend this proposal to its members before basically telling management that such an option was not on the cards. Additionally, Mr Bailey also accused ArcelorMittal of firing workers who were paid the least as soon as the company “hit a rough patch”.

This assertion is incoherent in two ways. First of all, the plant has been idle for several months since the company was unable to produce steel profitably after its contract for electricity and natural gas expired. Yet the workers were kept on with a Memorandum of Understanding, even as the firm tried to re-negotiate its contract. This alone shows that ArcelorMittal did not act hastily, as Mr Bailey implies.

Secondly, it is unclear what he means by faulting management for laying off workers who earned the least. Is he saying that the company should instead have let go the higher paid workers? If the lowest-paid workers were fired, it is most likely because they were the least skilled and also least likely to have other people dependent on their salaries. So, once the hard decision was taken, the company seems to have taken the least disruptive path.

None of this, however, has prevented union leaders from making the clichéd claim that workers are bearing the brunt of the economic recession. But who is supposed to bear this brunt? Again, the union spokesmen are speaking as if market realities can be ignored. If a company is not producing, it cannot earn revenue and if it cannot make money it cannot pay workers.

As Energy Chamber CEO Dr Thackwray Driver noted in yesterday’s T&T Guardian, ArcelorMittal may well choose to entirely close down its Trinidad plant if it cannot make a profit here. “If we’re not competitive, people are not going to go on producing and investing in Trinidad,” said Dr Driver.

This is all basic economics. Yet the SWUTT spokesmen and other trade union leaders are making statements which only emphasise their incomprehension, feigned or otherwise, of the dire fiscal straits T&T is in. But, in times of economic downturn in developed nations, progressive trade unions understand the need to work with management to stave off the worse effects on workers, knowing that some will have to suffer.

It is unfortunate that such harsh realities seem not to have penetrated the bound hides of T&T’s union leaders.

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