Blog

Leo W. Gerard

By Leo W. Gerard
USW International President

Red, as in furiously red, defined the day last fall when a consortium of companies announced it wanted $450 million in U.S. stimulus money to build a wind farm in Texas, creating 2,000 jobs in China and 300 in America.

Now, nine months later, things have cooled down and turned around. In a deal with the United Steelworkers (USW), two Chinese companies have agreed to build as much of the wind turbines as possible in America, using American-made steel, and creating perhaps 1,000 American jobs.

The deal is a result of white collar Chinese executives negotiating with blue collar union officers to create green collar jobs in the U.S. The agreement defies stereotypes about unions as constantly combative, excessively expensive and environmentally challenged. The USW has a track record of engaging with enlightened CEOs for mutual benefit.  It has a long green history. And it has worked to return off-shored jobs to the U.S.

The USW, like the Democrats in the House and Senate with their Make It in America program, is devoted to preserving and creating family-supporting, prosperity-generating manufacturing jobs in America. And if they’re green, all the better.

Billionaire investor Wilbur Ross has first-hand experience negotiating with unions, including the USW, to sustain U.S. manufacturing. He describes it positively. Here he is on PBS’ Charlie Rose on Aug. 2:

“I have found the leaders of big industrial unions, the steelworkers, the auto workers, they understand dynamics of industry at least as well as the senior management of the companies.”

Ross talked to Rose about dealing with the USW during the time when he was buying  LTV Steel:

“We worked out a contract that took 32 job classifications down to five, changed work rules to make it more flexible and most important of all, we put in a blue collar bonus system. . .We became the most efficient steel company in America. We were making steel with less than one man hour per ton. The Chinese at the time were using six man hours per ton. We were actually exporting some steel to China.”

Ross accomplished that while paying among the highest wages for manufacturing workers in America.

The USW approached the Chinese companies that planned the $1.5 billion Texas wind farm, A-Power Energy Generation Systems Ltd. and Shenyang Power Group, the same way it did Ross. The meetings occurred with the help of U.S. Renewable Energy Group, a private equity firm that facilitates international financing and investment in renewable energy projects. Jinxiang Lu, chairman and chief executive of Shenyang Power, said talking to the union enabled him to see its “vision for win-win relationships between manufacturers and workers.”

For the USW, this deal means the Chinese firms will initially buy approximately 50,000 tons of steel manufactured in unionized American mills to fabricate towers and rebar for the 615 megawatt wind farm in Texas, will employ Americans at a wind turbine assembly plant to be built in Nevada, and will employ more American workers in green jobs at plants constructing the blades, towers and thousands of other wind turbine parts.

For the Chinese companies, the USW, the largest manufacturing union in America, will use its long list of industry contacts to help construct an American supply chain essential to amass the approximately 8,000 components in a wind turbine. The idea is to collaboratively create a solid manufacturing, assembly, component sourcing, and distribution system so that this team – the Chinese companies, U.S. Renewable Energy Group and the USW — will build many more wind farms after the first in Texas.  

Additional wind farms mean more renewable energy freeing the U.S. from reliance on foreign oil. As U.S. Sen. Sherrod Brown, D-Ohio, says, there’s no point in replacing imported foreign oil with imported wind turbines. For energy and economic independence, green manufacturing capacity and green jobs must be in the U.S.

This deal does that. And there’s nothing unusual about foreign companies employing Americans. Many Americans, including USW members, already work in factories owned by many different foreign national companies, including German, Russian, Japanese, Mexican, and Brazilian, with names like Bridgestone-Firestone, Arcelor-Mittal, Rio Tinto, Grupo Mexico, Svenska Cellulosa AB (SCA) and Severstal.

In at least one other case, action by the USW forced the hand of a Chinese company to move jobs to the U.S. Tianjin Pipe, the world’s largest manufacturer of steel pipe, said it could not export profitably to the United States if tariffs rose above 20 percent. This was after the USW and seven steel manufacturers filed a petition with U.S. trade agencies in April of 2009 accusing China of illegally dumping and subsidizing the type of pipe used in the oil and gas industry. The union won that case this past April, and the U.S. Commerce Department imposed import duties ranging from 30 to 100 percent to give the domestic industry relief from the unfair trade practices. To continue selling in the U.S., Tianjin Pipe had no choice but to build an American pipe mill. Construction is expected to begin in Texas this fall on the $1 billion plant to employ 600 by 2010.

Although the USW is cooperating with A-Power and Shenyang Power, it will not back off its trade cases involving exported Chinese steel, pipe, tires, paper and other manufactured products. The stakes for U.S. jobs are just too high.

Back in 1990, when green was not as trendy, the USW recognized that the environment would be among the most important issues of the era and issued the report, “Our Children’s World.”  Since then, it has steadily promoted green — became a founding member of the BlueGreen Alliance and Apollo Alliance, which promote renewable energy and renewable energy jobs.

Good, green American manufacturing jobs. Establishing American energy independence. It is win-win. And it’s getting a green light now.

Leo W. Gerard

By Leo W. Gerard
International President

Let’s go back, just for a minute, to a time before screaming teabaggers, before Republicans decided to kill health insurance reform as a means to politically destroy this country’s first African-American president.

Try and remember what it was like before discussion of health insurance reform raised voices, a time when instead it raised concern. Recollect Aug. 7, 2007, during the Democratic primaries, when then-60-year-old retired and disabled steelworker Steve Skvara stood at a microphone during a political debate and told his story with tears in his eyes and a catch in his throat.

He’d worked more than 30 years at LTV Steel in East Chicago, Ind., and assumed like many who earned pensions and retiree health coverage that those benefits were guaranteed. But then LTV went bankrupt and ditched its obligations. Skvara told the candidates:

“Every day of my life, I sit at the kitchen table across from the woman who devoted 36 years of her life to my family and I can’t afford her health care. What’s wrong with America, and what will you do to change it?”

Skvara asked that question two years ago when 45 million Americans lacked health insurance. Now 46.3 million are without it.

And yet, teabaggers and Republicans are bent on preventing reform. They want to ensure only one thing – that another million Americans suffer no health coverage two years from now.

President Obama invoked Skvara’s name at the AFL-CIO convention in Pittsburgh on Sept. 15 in a speech about the middle class.

Mostly Skvara is a symbol of health insurance failure. But to Obama, he’s an emblem of something much bigger. It is a struggle of economic philosophies. For the past 20 years, the winning view has been that government should give breaks to big corporations and rich individuals. Obama told the AFL-CIO he believes in something different — an economy built on a vibrant and wide middle class.

Here’s what he said:

“For over half a century, the success of America has been built on the success of our middle class. It was the creation of the middle class that lifted this nation up in the wake of a great depression. It was the expansion of the middle class that opened the doors of opportunity to millions more. It was a strong middle class that powered American industries, propelled America’s economy, and made the 20^th Century the first American Century.

And the fundamental test of our time is whether we will heed this lesson; whether we will let America become a nation of the very rich and the very poor, of the haves and the have nots; or whether we will remain true to the promise of this country and build a future where the success of all of us is build on the success of each of us.”

Because of the extraordinary cost of health care in this country, insurance is a middle class issue. Health insurance can make or break a family – place it firmly in the middle class if an employer provides a good plan or bankrupt it if a family loses coverage during a serious illness.

Obama said as much to the AFL-CIO: “We’ll grow our middle class by finally providing quality, affordable health insurance in this country.”

Just this week, the Kaiser Family Foundation released a report showing premiums for family coverage rose 130 percent over the past decade. They now average $13,375, which is about the same as the entire annual take-home pay of a minimum wage worker.

Coverage is not affordable. The price of it is pushing families down the economic ladder. Look what it did to Skvara.  He had been a middle class steelworker and remained in the middle class after retirement. But he moved toward poverty after the LTV bankruptcy cost his wife her health insurance coverage. Loss of health insurance and the ensuing medical bills robs families of their life savings, their homes, everything until they’re bankrupt.

Skvara asked the candidates what was wrong with America and what would they do to fix it. Obama’s plan for fixing health insurance would forbid dropping or denying coverage because a person is sick or has a pre-existing condition.

He wants the public option to provide competition so that rates are affordable. That public option would cover Skvara’s wife – at a reasonable cost. So he could remain in the middle class and not find himself asking heartbreaking questions at public meetings.

The teabaggers are apoplectic because this isn’t just about health care. This is about the values of a government.

The Obama administration fails to fawn over the affluent.

Instead, Obama talked of downtrodden workers in the former Jones & Laughlin Steel mill in Aliquippa. Bosses there fired a dozen workers shortly after the National Labor Relations Act passed in 1935. The workers, mostly union organizers, challenged the dismissals all the way the U.S. Supreme Court, securing a landmark win that not only got them their jobs back, but also affirmed the constitutionality of the labor law that led to the burgeoning of union organizing, and the growth of America’s large, stable middle class.

To win that case, Obama told the AFL-CIO convention, workers of different ethnicities and faiths had to work together and stick together. That will be necessary to win this struggle to reform health insurance as well. But that reform is only the first part of Obama’s plan for the middle class:

“We will make possible the dreams of middle class families and make real the promise of the United States of America.”

That’s worth fighting for.