Belgium: Caterpillar Gosselies – dragged in by wave of layoffs

Increasing support for nationalisation to save jobs

At the end of February Caterpillar, one of the biggest industrial employers in the French speaking Walloon area in the south of Belgium, announced massive job cuts. Up to 40% of its 3,700 strong workforce at the plant in Gosselies near Charleroi will lose their jobs. This brought the total of nationally announced redundancies to 4,000 since the beginning of this year. Over the last five months, a staggering 16,000 jobs have been lost, a large amount for an economy with a relatively small workforce. Bosses, politicians and the main press seize on this social catastrophe to call for a “modern” social model, for structural “reforms”, for a competitiveness “shock” through attacks both on wage indexation and on wages themselves. Workers and their unions oppose this logic, but unfortunately without any strategic plan, leading in practice to a policy of damage control and terminal care.

This is the fifth announcement in five months’ time that involves well over a thousand job losses. The closure of the Ford plant in Genk, scheduled for the end of 2014, will lead to the loss of 4,264 jobs and up to 2,000 more in conveyor and subcontracting firms such as SML (423), Syncreon (313), IAC (298), Lear (271) and others. The closure of 7 of the 12 units of finished steel and coke production at ArcelorMittal in Liège involves the loss of yet another 1,300 jobs. At NLMK, a steel factory in La Louvière, 600 jobs are threatened. The restructuring of Caterpillar adds 1,400 permanent and 190 contract job losses to this total. While material processing, the core of the economy, is hardest hit, other sectors are also heavily affected. Banks have announced cuts of over 4,000 jobs in the coming 3 years, 1,800 at BNP Paribas Fortis, 1,000 at ING, 650 at Belfius and 500 at KBC. In other branches job losses run in the hundreds, not yet in the thousands, nevertheless electronics (Philips – 344), distribution (Photo Hall – 303), telecom (Alcatel Lucent -280), food industry (Verbinnen Poultry Group – 450) and many others, including public services, are sucked into this crisis.

Until recently, the Belgian economy seemed to resist relatively better than other European countries the effects of the crisis. In 2009 the economy contracted by 4%, but that was less than France, the Netherlands or Germany. It was the first economy in the Eurozone to recover its GDP back to the level at the start of this crisis. Together with Germany, it is one of the few Eurozone economies now with a GDP higher than it was at the first quarter of 2008. This is partly due to its role as a supplier to the German economy, but also to the so called automatic stabilizers, the albeit eroded sliding scale of wages sustaining demand and a relatively stronger social security system including the existence of economic unemployment, a subsidized system of short time working, softening the effect of the crisis. This is a consequence of the historic strength of the workers’ movement with a high degree of organization comparable to the Scandinavian countries combined with combativeness, especially in the Walloon area, more in line with the southern European countries.

To a certain extent the Caterpillar plant is a typical reflection of this. It was considered “a model”, “solid as the construction machinery it was building”, “the Rolls Royce of industry, where good wages”, at least for the elderly workers, “were compensated by high quality standards and extraordinary productivity”. For decades, bosses in Belgium preferred investment to improve productivity in order to avoid confrontation with the workers over wages. Labor productivity per hour is the fourth worldwide after Luxemburg, Norway and the US. The quality of the production in Gosselies is not questioned, but Caterpillar has invested heavily in Latin America and Asia with the Gosselies plant producing mainly for the European market with higher safety standards but less demand. As one of the shop stewards said “we are driving a Ferrari, but with speed limited to 30 km/h.” Caterpillar prefers cuts in production costs over quality. A worker says “when we receive parts from China, they are immediately reviewed. If we were producing like this, we would be punished. But in the end it’s us losing our jobs.”


The worldwide recession and the resulting reduction in demand have aggravated the overcapacity. For a while this was compensated by reductions in company tax, state subsidies for wages and underutilization of capacity through short time working as a means of safeguarding production capacity in case the markets would pick up again. Last year the Ford plant in Genk produced at less than 50% of its capacity with up to a hundred days of economical unemployment. One of the bosses of ArcelorMittal explains: “we thought the slowdown would be temporary, we now realize it will be permanent. Orders from some of our biggest clients have been cancelled or reduced, such as the car-industry.” Caterpillar made a record profit of 4.2 billion euro last year. It paid a company tax of only 3.3% on its 6.8 million euro profit made in Belgium. In 2011 it received an investment subsidy of 21 million euro from the regional authorities. It profited from several employment schemes which amounted to public support of 1,100 euro a month per newly employed worker, up to 90% of the monthly net wage, according to Yvan Del Percio, head of the Caterpillar socialist trade union delegation.

But whatever subsidies are given, however much tax rebates to companies are conceded, continuous competition in a shrinking market, will not guarantee employment. A few years ago Ford workers in Genk had accepted a wage cut of 12%, making them considerably cheaper than German or French car workers. It didn’t protect them. On the contrary, amongst the reasons given to close the plant in Genk were mentioned the limitation of the market in the region, the soft attitude of the unions and the relatively cheap cost of laying off manual workers. The actual surge in job losses is due to a combination of factors. The existing overcapacity; the economic contraction of the Eurozone and the European Union aggravated by the imposed austerity; the slowdown of the German economy that impacts heavily on Belgian exports; and the austerity measures put in place since politicians were able to scramble together a federal government after months of political crisis.

On top of this comes a threatening explosion in the employers’ costs when laying off manual workers. Historically Belgian employers offered better conditions to employees, white collar workers, in an attempt to divide the workers. As a result Belgian white collar workers, over 1.8 million now, are amongst the best protected in Europe. Redundancy notices for white collar workers are one month for every started year of employment, with a minimum of 3 months. Blue collar workers, 1.3 million now, on the contrary are amongst the worst protected in Europe, with redundancy notices of between 28 and 129 days, depending on the number of years employed. Belgium has been condemned by European Labour Courts over this discrimination. Negotiations between the bosses’ organisations and the unions however failed to provide a solution. The bosses would like to stop this discrimination by discriminating against every worker, by a new common employment law as close as possible to the existing one for blue collar workers. The unions aim for the opposite. Blue collar workers who went to court all obtained the same conditions as white collar workers. Because of this the Constitutional Court imposed July 8, this year, as the ultimate date when, if no agreement is reached by then, courts will have to apply the most favourable law to everyone. The government will not let it come to that point and will probably impose a statute undermining the existing white collar one, but nevertheless improving slightly the current blue collar one. Therefore bosses considering laying off blue collar workers are certainly bearing in mind that their redundancy costs might increase in the coming months.

Increased competition

Increased competition between capitalists tends to spill over in increased competition amongst workers. At the level of the workplace, the unions try to counter this by collective bargaining. To a certain extend two opposite political economies are confronting each other, the one of the capitalists based on competition and the one of the working class, based on solidarity. Unfortunately, while there is undoubtedly a certain degree of solidarity across workplaces, across sectors and across frontiers, many trade unions, even in companies with a European works’ council, are unable to transcend competition with a common policy based on solidarity.

When Ford announced the closure in Genk amongst workers having practically unbearable work patterns and with an average age of 48 there was limited enthusiasm to fight back. Many workers did not believe in their unions’ capacity to effectively fight back. Nationalisation of the plant did not seem a realistic cause to fight for. All hopes went to a generous “social plan” with early pension schemes and large redundancy payments. Some were hoping to get bonuses up to 150,000 euro before tax.. Workers at conveyor and subcontracting firms, much younger on average with many from immigrant background and taking home much less, felt let down. They organized their own action committee through their trade union delegations, refused to start production and as such stopped production at the Ford plant itself. Finally it was agreed a common social plan would be presented by Ford and the bosses of conveyor and subcontracting firms.

Since then however, indications for redundancy bonuses appear to be much less than many had hoped for. If that’s the case, the idea of a possible occupation, even the demand of nationalisation, will start to arise, at least amongst a combative minority. Even though it’s only rhetoric from the part of the trade union leaders at ArcelorMittal, the fact that regionalization or nationalisation was publically debated certainly helped many workers to reflect on this option. For a period the trade unions leaders at ArcelorMittal were able to channel the anger into begging politicians to intervene on their behalf. They went to the federal government in Brussels, to the European Commission in Strasburg and to the regional government in Namur. At each “negotiation” the workers demonstrating outside empty-handed, were met with water cannons, teargas, batons and shields and, in Strasburg, with rubber bullets with one worker losing an eye as a consequence. Nevertheless, conditions are maturing to build a real relation of forces that could take an initiative. Solidarity in the Genk area with the Ford workers is enormous, as it is in Liège with the ArcelorMittal workers, and in La Louvière with the workers from NMLK, and it will be no less in Charleroi with the workers from Caterpillar.

Strikes and occupations needed

The LSP/PSL has been suggesting the mobilisation of that solidarity through local demonstrations, such as the one that has now been planned for March 30 in Liège; through fraternization amongst the threatened workers, as was done when ArcelorMittal workers visited Caterpillar; and through regional strikes. We promote the idea of occupation in order to create platforms from which to organise solidarity and involve the local communities. While still abstract at this stage to many workers, we believe occupation of one site might lead to a chain of occupations similar to the movement of occupations in the 1970s. We also press the idea of forming action committees and solidarity committees as a means of providing the space for every supporter to help build the movement.

Contrary to the 1970s, when also the level of involvement and confidence amongst workers was certainly bigger, today the different authorities’ room for manoeuvre is much more limited. On February 21 the union leaders were forced into calling a mass demonstration of 40,000 against the austerity policy. LSP/PSL centred its intervention on two demands. Our placards called for “ArcelorMittal, Ford, … it’s us who build the plants: mobilize, organize, occupy for expropriation and nationalization” and “Stop austerity through a real action plan including general strike(s).” Workers enthusiastically picked up our placards as a message towards the trade union leaders. Some workplace banners featured a similar approach.

The correctness of this approach was illustrated by an opinion poll taken in the week before the February 21 demo, but published only the day after. Over 70% declared in favour of imposing job guarantees on multinationals in exchange for tax concessions, 60% in favour of legal prohibition of layoffs in companies making profit. But the most striking result was the 43% in favour of regionalisation or nationalisation as a means to combat closures and saving jobs. Of course the question was explained as becoming a public shareholder, supposedly with a public manager running the company as if it was private. It was not the kind of nationalisation we defend, under democratic control of workers and the community. It was certainly not explained as a step in the direction of economic planning, with conversion of production to tackle the urgent social, ecological, and economic challenges. Nevertheless in Brussels (52%) and in the Walloon area (53%) a majority declared in favour and even in Flanders 36% did so. The way this was presented in the press was totally misleading, reflecting the policy of divide and rule: “Walloon and Brussels in favour of nationalisation, Flanders against”.

None of the existing political parties defends such a course. All of them declare powerless in face of the multinationals, the markets and the European Union. The unions’ policies of limiting the damage through friendly relations with some of the former so-called workers’ representatives in the Christian Democratic Party or in the Social Democratic and Green parties are openly failing. As a result parts of the official unions – the regional socialist trade union federation in Charleroi/Hainaut-South organizing 110,000 workers, the francophone Christian Employees Union, organizing 167,000 employees and to a lesser extend the metal workers union in Brussels and the Walloon area – have spoken out in favour of a new political movement, involving all of the radical left, social movements and those ready to oppose neoliberal attacks. On April 27 those unions, in collaboration with the main parties and groups of the radical left, including LSP/PSL, will be hosting a mass meeting in Charleroi on the issue.

Role of trade union leaders

At the moment the federal trade union leaders generally have succeeded in containing the movement. But weakness provokes aggression. The bosses and the right wing parties feel confident to push for ever more drastic attacks. The General Christian Workers Association (ACW-MOC), which includes the Confederation of Christian Trade Unions (ACV-CSC) the largest of Belgium’s three trade union centres, came under attack over a financial deal with Belfius Bank. It was revealed by the right wing opposition that the Association made use of tax rebates which are criticised by its own union. As a result, at the beginning of March its main representative in the federal government, the minister of finance, had to resign. It is expected the Flemish Christian Democratic Party will seize on this to make an even further turn to the right.

In the ABVV-FGTB socialist trade union federation conflicts that are taking the characteristics of national divisions are looming between its Flemish and the French speaking parts; the ABVV-FGTB metal workers’ and teachers’ unions have already split into completely separate Flemish and Francophone organisations. Additionally further conflicts are developing over the new unified employment statute. Some blue collar workers’ unions estimate that any new law will be an improvement for their members, while some even warn that industry has to remain competitive. They are not inclined to help the employees’ unions to protect their members’ existing statute. The employees’ unions on the other hand argue for a generalisation to other workers of the white collar workers’ statute over a period of time.

There are a lot of potential fires that can burst out and spread at any moment. Anger over job losses, inequality, social injustice and the excessive life style of the rich, begins to impact on opinion. On the basis of the annual report of the company, the socialist trade union delegation in Bayer Antwerp, revealed some shocking figures in its workplace leaflet. Bayers’ CEO takes home an average of 2,000 euro an hour, 88 times the average of a Bayer employee. Many are already convinced it’s time for the rich to pay up. Opinion polls indicate up to 80% is in favour of increased taxes on the rich. But there is also a deep sentiment of fatalism, a widespread feeling that nothing can be done, that the trade union leaders are no better than the politicians and that when struggle is engaged, it only serves the top bureaucrats, not the membership.

As a result, while the potential is there, the left is still weak and poorly organised. But this can change quickly once the storm bursts, probably as a result of further generalised and brutal attacks on wages and living conditions. Because the potential is not fully used, mainly through lack of consistent leadership, further defeats, even big ones, of the workers can unfortunately not be excluded. As many working class activists would respond: those who struggle can lose, those who don’t struggle have lost already. While doing everything we can to stop defeats, we believe those will help to further sharpen the tactical, strategic and programmatic weapons workers need in the struggle for a socialist transformation of society.

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