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Strike shutters Ukraine's greatest steel plant ArcelorMittal Kryvyi Rih

The work-to-rules initiative is aimed at creating safe working conditions, raising the average salary to 1,000 euros, stopping job cuts and pressure against the trade unions
15:00, 25 May 2018

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ArcelorMittal Kryvyi Rih (AMKR) is Ukraine's biggest integrated steel company. The first metal was produced in 1934, then the enterprise was called Kryvorizhstal. State enterprise Kryvorizhstal became internationally known after privatization in 2004 for a sum of $800 million by a consortium called Investment-Metallurgical Union, which included Ukrainian oligarch Rinat Akhmetov’s SCM and Interpipe Group, controlled by President’s Kuchma’s son-in-law Pinchuk. By initiative President Yushchenko, the privatization deal was dismissed, and reprivatization by Mittal Steel took place in 2005. The company was renamed Arcelor Mittal Kryvyi Rih in 2006.

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In 2010-2018, ArcelorMittal Kryvyi Rih began to bring its owners 3 times higher net income, however, during these years, the share of wages fell from 11.3% to 5% of the cost of production. The factory staff continued to shorten continuously - from 65 thousand workers in 2005 to 23 thousand in 2018. This kind of optimization really meant increased exploitation of those who stayed at the plant, reduction of the owner's costs for outscored employees, and lack of state-run retraining programs for those people, who lost their workplaces due to the automating of the production process. The situation was similar in other factories and mines of Kryvbas economic region, key Ukraine’s area, specializing in iron ore mining and the steel industry.

Related: ArcelorMittal Kryvyi Rih to receive $350 million syndicated loan from EBRD

Kryvyi Rih workers gave their response to the actions of their owners: in May 2017, coordinated protests of workers took place at the main enterprises of the city (Kryvyi Rih Iron Ore Plant, EVRAZ Sukha Balka corporation, AMKR) – production suspensions, rallies, and seizure of the plant administration. Miners are demanding an average salary of $ 1 thousand. For the first time, this claim was voiced during the May Day demonstration in 2017. In modern Ukraine, this sounded almost unreal, but before 2014, this was a usual salary of some trades of this industry. The labor conflict has stopped after reaching an agreement on the gradual increase of wages by 50%.

The government seemed to be distanced from the problem, for example, in 2016, the State Labor Committee commissioned dozens of violations on the AMKR, but in January this year, the court rejected a demand to temporarily stop production. One day in work-to-rule regime means for the Kryvy Rih factories and mines $ 2.5 million loss in export earnings (and $ 7.5 million in terms of a full-fledged strike).

Related: Kryvyi Rih miners on strike: Incomes for wage increase instead of offshore funneling

On the night of March 3rd to 4th, the roof of the "ArcelorMittal" converter shop collapsed, resulting in the death of a 25-year-old worker. March 14, AMKR workers held a rally and voiced claims to AMKR owner and CEO: create safe working conditions, raise the average salary to 1,000 euros, stop job cuts and outsourcing, and not put pressure against the trade unions. After several days, more than 12,000 hired workers have signed this appeal. March 15, representatives of AMKR trade union held a briefing in Verkhovna Rada, asking the MPs to find the solutions to the key challenges faced by the enterprise. March 27, the workers held a special conference, where representatives of different plant departments and trade unions decided on a labor dispute (this procedure was necessary to legally and peacefully conduct the negotiations between the parties).

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ArcelorMittal converter shop roof collapsed

Related: Rockfall in Kryvyi Rih mine: Miner died under rubble

In April, the administration has been delaying the work of the conciliation commission, and at the beginning of May, it agreed to sit down at the negotiating table. May 3, an organizational meeting, in which the parties had just to settle the composition of the reconciliation commission, turned into a 26-hour challenge, during which the owner’s representatives were killing the clock, the police blocked the trade unions representatives right in the negotiating room, and the workers rushed into a spontaneous rally and hardly seized it plant administration. The necessary documents were signed, the composition of the representatives from the factory workers and the owner agreed.

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Workers rally in Kryvyi Rih

Related: Cabinet consolidates state mines: What will be consequences of coal industry reform?

May 10, the first meeting of the reconciliation commission was finally held, the secretaries were elected and the rules were determined. However, the next day it turned out that the administration sued, demanding to declare the conference on March 27 illegitimate. May 14, independent trade unions of Ukrzaliznytsia launched a work-to-rules strike. They demand higher wages, the return of abolished social benefits, and new engines. The work-to-rules initiative was joined by the AMKR railway production facility; they stopped the delivery of raw materials to the furnaces.

Related: How Trump's trade barriers to change the life of Ukrainian metallurgists?

May 18, the administration involved the strikebreakers, and then "Ukrzaliznytsya" brought its locomotives to AMKR to renew its work. The situation around the plant is so intense that May 25, the owner of the corporation, Lakshmi Niwas Mittal, arrives in Ukraine. And AMKR's CEO Paramjit Kahlon offers trade unions an increase of UAH 1.1 billion (compared to the wage fund of the factory in October). This number might seem really astronomical, but in fact, it means raising the average monthly salary by about 130 euros. According to the calculations of the Ukrainian economists, increasing salaries up to 1,000 US dollars per month is equivalent to that AMKR owners would funnel to offshore one-third less money.

May 23, one of AMKR trade unionist held a speech in European Parliament and reported on the situation with the labor dispute. The negotiations are continuing.

Related: Russia takes out coal from Donbas and sells to Europe

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