The jobs of 1100 workers at the Whyalla steelworks in South Australia are at risk after their employer, Arrium, went into administration in early April. Altogether 7000 jobs across the country are threatened if the company collapses.

Labor leader Bill Shorten has called on the government to guarantee the use of Australian steel in all government projects, and to put up money to keep the company afloat through co-investment with its owners. This has exposed the Liberals’ blind faith in the free market, as they rejected bailing out the company and instead offered just an $80 million order for a rail line upgrade between Adelaide and Tarcoola. But this won’t save the steelworks—according to The Australian the company needs between $100 and $120 million in additional orders in the next two years to keep it open.

Even under Labor’s plan there would undoubtedly be cuts to jobs and pay for workers at Arrium. The company has already sacked 900 staff in South Australia in the last year, and last month asked 400 miners to take a 13 per cent pay cut.

This mirrors the restructuring at BlueScope Steel at Port Kembla. In November, its workers voted to accept 500 job cuts and a three year pay freeze. The company threatened to close the plant unless they agreed.

Such trade-offs do not guarantee jobs. Workers at Holden made concession after concession, agreeing to work half-time during the 2008 economic crisis, then accepting a wage freeze in 2013. But the company still decided to shut up shop.

There is a global glut of cheap steel coming from China. This is threatening steel producers worldwide, with Tata Steel in Britain also facing closure with the loss of 15,000 jobs. But there is no reason to lose a single job or for anyone to take a pay cut. There should be a fight to demand the government nationalise the company and guarantee the jobs.

If workers occupied the steel plant, it could prevent the company moving out valuable equipment and stock. Such a fight for jobs could win support across the country, and put serious pressure on the government to act.

This is a challenge to the logic of free market capitalism, which says that profitability comes before all else. But the thousands of workers’ lives that would be destroyed through sackings are more important than the bosses’ profits. Unions need to lead a fight to save the jobs—at any cost.

By James Supple

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