Recently The New York Times reported a dispute at a meeting in France of the Organization for Economic Cooperation and Development (OECD). The disagreement between France and the U.S. “centers on whether the organization will endorse giving workers a role in corporate management, as they have by law in some European countries but do not have in the United States.”

Here in the U.S. there are several examples of what the OECD calls “corporate governance.” The ones that come to mind are the Auto Workers union, which negotiated a union-designated board member at some companies, and my own Steelworkers union.

Personally, I think this is promoting and perpetuating an illusion for workers that there is something democratic about the corporate structure or that it can be addressed at the board level through benevolence or an uprising of stockholders.

The USWA negotiated concession contracts with several steel companies in the late 1980s and got a member on several corporate executive boards. Our own past International Union President Lynn Williams was on the board of Wheeling-Pittsburgh Steel. At Bethlehem Steel, where I worked, there was also a union-designated board member. Along with the stock we got for our concessions, this was supposed to be the example of workers’ involvement with owning and running the company. At the OECD they would call that corporate governance.

Well, when times got tough at Wheeling-Pitt the first person who got fired was Williams. Before Bethlehem went bankrupt and was bought by International Steel Group (ISG), we had accumulated two members on the board and thousands of dollars of phony stock through more concession bargaining. We were supposed to get the full value of the stock upon retirement. The union board members proved to be as useful as teats on a boar and after the bankruptcy our stock was almost worthless.

I saw a bulletin board where workers posted their stock checks that the bankruptcy court sent them. One check was for $0.01. That’s right, a check for a penny.

Then there’s Weirton Steel. It has an independent union that negotiated a landmark Employee Stock Option Plan in the early 1980s. The ESOP was held up to the rest of us as the example of the future – employees owning the plant. In reality, the workers floated loans through concessions to the same bosses that ran the company before, all of which was negotiated by the banks. Eventually the whole scheme fell apart, and just before it was sold to ISG the workers’ stake in the plant had dwindled to around 11 percent.

What is truly amazing is that the argument in France over the language is happening at all. It is some of the most milquetoast-like language that one has ever seen. The existing principles state: “Performance-enhancing mechanisms for employee participation should be permitted.” The compromise proposal is to change “permitted” to “encouraged.” Yet to have any statement is impermissible to the Bush administration and that is why they are opposing it.

It was also reported that the approach that some labor unions in Europe were taking was trying to discredit managers in hopes of gaining an advantage. John G. Evans, the general secretary of the Trade Union Advisory Committee to the OECD, told a conference on corporate governance at the French-American Foundation, “You almost need a new slogan, Capitalists and workers unite in the struggle against managers.”

The problem is that the corporate managers are doing the bidding of the capitalists. Workers’ interests aren’t the same as the capitalists’ and the only real control workers will have in running any steel or auto company will be when they are owned by the people and run for the benefit of the people. Profits will be used to build new schools and roads and hospitals. The name for that is not corporate governance; it’s socialism.

Paul Kaczocha is a steelworker in Indiana. He can be reached at pww@pww.org.


Paul S. Kaczocha
Paul S. Kaczocha

Steelworker Paul Kaczocha is a long-time union and civil rights activist in Gary, Indiana.