Protests over redundancies at Stalowa Wola steelworks

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During 2003, trade unions at Poland's Stalowa Wola metalworking company have been organising industrial action in protest at the planned closure of the group's iron and steel works, with the loss of 1,400 jobs. The government has offered the workers to be made redundant assistance under a new programme to soften the effects of industrial restructuring.

The Stalowa Wola works (Huta Stalowa Wola, HSW SA) occupies something of a unique place in the Polish iron and steel industry. For the most part, its holding structure is an iron and steel smelting and processing company in name only, and its core activity is the production of construction machinery and military equipment. Of a combined Stalowa Wola workforce of 10,000, the iron and steel works proper employs only 1,400.

Much like other metal-related operations in Poland, Stalowa Wola is in the process of restructuring, and its restructuring programme for 2003-7 involves the closure of the iron and steel works. The proposed closure threatens to bring particularly dire consequences for those employed there, in that the Stalowa Wola holding is not included in the state restructuring programme, and is thus eligible for none of the public funds earmarked for alleviating the effects of employment restructuring. The organisation itself, meanwhile, is in no position to generate such funds. The planned redundancy of 1,400 employees has met with determined resistance during 2003 on the part of the trade union organisations active at Stalowa Wola.

During the initial phase of their protests against the closure, the unions organised strike action and occupied part of the local authorities’ offices. They demanded protective measures for the redundant employees, the restoration of pre-retirement benefits (PL0211108F) and a loan from the state to modernise the struggling Stalowa Wola iron and steel operation. Responsibility for such loans rests with the Industrial Development Agency (Agencja Rozwoju Przemysłu, ARP), which accepted the restructuring plan for 2003-7 put forward by Stalowa Wola management. Endorsement of this restructuring plan was a basic condition for the provision of a loan approaching EUR 18 million, to be used for the purchase of production plant needed for the completion of orders which Stalowa Wola has won. The ARP loan comes with one clear restriction; in the words of the ARP chair, 'this money can not be directed to the iron and steel plant on account of agreements with the European Union'.

The trade unions are unwilling to accept this condition, and the Stalowa Wola strike committee wants to discuss ways and means of assisting the iron and steel operation. While the company's board was negotiating the terms of the loan, the unions stepped up their protests – this time occupying the entire local administration building. In an interview, the chair of the strike committee declared that '.these demands must be met, otherwise there can be no question of the occupation being lifted. We won’t back down.'

In the meantime, the government has offered the newly unemployed Stalowa Wola iron and steel workers participation in the 'Perspektywa' programme, which has been devised to soften the impact of redundancies. This programme is to be launched in September 2003 with funds provided by the Ministry of the Economy, Labour and Social Policy (Ministerstwo Gospodarki, Pracy i Polityki Społecznej, MGPiPS), the state labour office and local governments. The union activists, for their part, take the position that courses and training represent little more than a waste of money, and would prefer to have the bulk of funds made available as part of this programme channelled into the funding of employment. They believe that Stalowa Wola should contribute by renting factory space and equipment to the redundant workers, who would then be able to continue activity in their own name.

Since the mid-1990s, the iron and steel industry in Poland has been undergoing a process of profound restructuring. Despite the fact that many thousands of the sector’s employees were made redundant, with almost 50,000 losing their jobs between 1999 and 2002 alone, this process has progressed in a generally peaceful atmosphere. This distinguishes the iron and steel sector from industries such as coal mining or defence production, which are widely regarded by the public as 'hotbeds' of incessant labour unrest. The recent strike mounted by the steelworkers' trade unions at the Stalowa Wola plant, however, may be the first manifestation of growing pressure in the industry.

The strike at Stalowa Wola suggests that, as successive waves of redundancies are implemented at restructured operations, they will encounter increasing union resistance, especially given high levels of unemployment. In most instances, all trade union claims are addressed to the government, at least partly because the managers of the modernised companies concerned argue that they simply have no money for alleviating the impact of collective redundancies. These circumstances pose a serious problem for the government. One the one hand, the government has a clear interest in preserving a degree of social peace, so it is willing to countenance at least some of the demands pressed by the unions, thus - in the view of some commentators - risking a long-term escalation of such demands, with employees of organisations finding themselves in similar predicaments in the future requesting analogous social packages. On the other hand, the government must abide by agreements made with the EU. It is likely that this latter point will be cited in the government’s defence once the redundancies planned for Stalowa Wola are implemented.

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