A first for Aceralia: worker directors on the board

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The board of directors of Aceralia, a steel-making group that is in the process of being privatised, was constituted in November 1997. Its members include the general secretaries of the metalworking federations of the UGT and CC.OO union confederations, thereby making it the first private company in Spain with union representatives on the board.

Aceralia, formerly CSI, is the only integral steel-making company in Spain. It employs about 12,500 workers, and in 1996 had a turnover of around ESP 300,000 million and earned profits of ESP 15,000 million. The privatisation of this company took a step forward in July 1997 with the sale of 35% of its shares to the Luxembourg-based group Arbed. Although 52.8% of the company is still in public hands, the Government plans to complete the privatisation before the end of 1997 by launching a public offer of shares. Arbed will then be the major shareholder in the company .

The Spanish trade union confederations, UGT and CC.OO, have expressed their serious disagreement with the Government since the beginning of the privatisation process (ES9707117N). The trade unions have accepted the entry of private capital into Aceralia, but believe that the state must retain a majority shareholding, since integral steel-making is a strategic sector with a great importance for the Asturias region. From the outset, the unions have also demanded greater participation in the privatisation process. Since June 1997, rallies and strikes have been called in Aceralia due to the lack of response from the Government .

In this context, it is significant that the general secretaries of the metalworking federations of UGT and CC.OO, José Manuel Fernández Lito and Ignacio Fernández Toxo, have obtained a place on Aceralia's board of directors. The board of directors was constituted in late November 1997. It has 15 members and will sit for a duration of five years - a decisive period for the future of the company. In these five years the shareholding structure of Aceralia will be fully established, the investment commitments agreed with the Government will be met and the future strategy of the steel-making group will be decided. The presence of their representatives on the board has been welcomed by the trade unions, which have been demanding greater union participation in the strategic decisions of the company since the beginning of the privatisation process.

The union leaders' presence also sets a precedent. Aceralia will be the first private company in Spain with union representatives on its board of directors (Consejo de Administración). Previously no private company had allowed union representatives on to its board - not even the Spanish subsidiaries of multinational groups that have union representatives on the board of directors in their countries of origin. The unions sit only on the board of directors of public companies with more than 1,000 workers, and generally their margin of action is very limited, since most of these companies have set up executive boards (Consejos Directivos) on which the unions are not represented.

The Aceralia precedent is therefore of great importance for UGT and CC.OO, since it may facilitate the presence of unions on the boards of directors of other companies that are being privatised, or of totally private companies - a demand that they have been making for some time.