Unions protest at ArcelorMittal Steel Galaţi’s proposed temporary unemployment measures

A month after protest actions in March 2009, steel workers’ trade union representatives picketed prefecture offices in eight Romanian counties, as well as the Ministry of Public Finance in Bucharest. Among their grievances was the decision of ArcelorMittal Steel Galaţi to close the coke plant operating in the city’s industrial park, and to force into technical unemployment all of the company’s employees, by rotation, in 10-day stages during the second quarter of 2009.

Cutbacks in steel industry cause tensions

The economic crisis affecting global markets has caused a loss of orders and generally diminished the demand for steel products. This has had an impact on ArcelorMittal Steel Galaţi, which initially introduced a voluntary redundancy scheme, backed by attractive severance pay. All of the company’s staff – amounting to some 13,000 employees – were eligible for the scheme.

Since 1 January 2009, about 2,700 employees have taken up the voluntary redundancy scheme. Of these, 1,100 people have been granted approval to leave the company. The scheme is a follow-up of the restructuring plan instigated in 2003, which has reduced the personnel by more than 10,000 employees; about 12,000 workers now remain at the Galaţi industrial platform in eastern Romania.

In the first quarter of 2009, the management organised 10-day leave of absence periods – taken from the annual leave – by rotation, for each employee. Later, company management announced its intention to close some of the facilities of the coke plant in the Galaţi industrial park, a decision that could jeopardise the jobs of some 1,500 employees.

Moreover, the company informed the workers that, starting with the second quarter of 2009, it would organise 10-day technical or temporary unemployment stages, by rotation, for all employees. During this period, the company would pay 75% of the base salary and the length-of-service bonus. This measure follows a government ordinance stipulating that, during technical unemployment, both employers and employees shall be exempted from the payment of social security contributions.

Trade union actions

On 24 March 2009, the Solidaritatea Trade Union (Sindicatul Solidaritatea) staged a protest rally in Galaţi, with the participation of over 400 persons, who expressed their disapproval of the technical unemployment scheme.

The workers declared their intention to demand the appointment of a competent management and the reclassification of the enterprise as a public entity, due to the – in the opinion of the workers – breach of the company’s privatisation agreement. Sindicatul Solidaritatea highlighted the obligation of the company’s foreign investor to fulfil its commitments regarding technology upgrading, environmental programmes, and the social schemes assumed under the restructuring and viability plan; this plan was a component part of the privatisation agreement.

After the rally, the management and trade union leaders held discussions. The ‘Metarom’ Steelworkers Trade Union Federation (Federaţia Sindicală a Siderurgiştilor Metarom, FSS Metarom), the Local Federation of Free Trade Unions (Uniunea Teritorială a Sindicatelor Libere, UTSL) and the Forum Trade Union (Sindicatul Forum) demanded that workers on technical unemployment should be paid 90% of the base salary in addition to the length-of-service bonus. Meanwhile, Sindicatul Solidaritatea proposed either 100% of the base salary plus the length-of-service bonus, or 90% of the base salary together with the length-of-service bonus and a 15% salary increase with effect from the second quarter.

At the beginning of April 2009, the trade unions picketed the prefectures of eight counties where steel plants are based and, on 13 April, they came to the capital city of Bucharest where they protested at the Ministry of Public Finance (Ministerul Finanţelor Publice, MFP). The unions declared that, ‘since November, nobody is working any more, people are being dismissed’. The trade unions are requesting government intervention, and demand that privatisation agreements must be verified with regard to the investment obligations assumed thereunder.

On 15 April, some 2,000 workers barred entry to the Galaţi industrial park.

Results of negotiations

After several rounds of talks with members of the cabinet, who promised support for the steel industry within the limits permitted by the European Union (EU) regulations regarding state aid, the company management decided to postpone the technical unemployment scheme. It agreed that such a scheme would entail paying 85% of the base salary and the length-of-service bonus. In addition, the management decided to reduce compulsory holidays to five days for each employee.

Commentary

It is obvious that the ArcelorMittal Group is experiencing economic difficulties, considering the above cost-reduction strategies. Moreover, the Group made a statement at the end of 2008 about redundancies involving some 9,000 employees worldwide, 6,000 of whom would be expected in Europe alone.

Trade union members are aware of the pessimistic prospects, and they are trying to save the Group’s Romanian sites of Galaţi, the westcentral city of Hunedoara, and the northeastern cities of Roman and Iaşi. This is one of the main reasons for their protests and for their disagreement with the closure of the coke plant in Galaţi. However, industrial tensions have arisen more than once in the company in the recent past (RO0805029I, RO0704039I).

Constantin Ciutacu, Institute of National Economy, Romanian Academy

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