Dnipropetro­vsk Oblast's Arcelor­mit­tal, in Kryvyi Rih, rat­tled by la­bor strikes for higher wages

Kyiv Post Legal Quarterly - - Contents - BY JOSH KOVEN­SKY KOVEN­[email protected]

KRIVYI strike­break­ers. RIH, Ukraine — It ended with the In May, this city of 650,000 peo­ple more than 400 kilo­me­ters south­east of Kyiv was gripped by a strike as work at its big­gest fac­tory — the Arcelor­mit­tal Kryvyi Rih steel plant — ground to a halt. Op­er­a­tors of the fac­tory’s in­ter­nal rail sys­tem had gone on strike for higher wages, re­fus­ing to guide trains along the fac­tory’s self-en­closed sup­ply chain un­til they re­ceive monthly pay of 1,000 eu­ros. But lack of sup­ply placed the fac­tory’s fur­naces in dan­ger of de­struc­tion, forc­ing man­age­ment to make a choice: cede to the work­ers’ de­mands or find a way to buy time? Man­age­ment brought in brigades of work­ers from state-owned rail­way com­pany Ukrza­l­iznyt­sia to run the fac­tory, break­ing the strike but leav­ing the cen­tral dis­pute in place. At the core of the con­flict is brain drain — or, as la­bor or­ga­nizer Yevgeny Galin­sky joked, “arm drain.” “Glob­ally, the sit­u­a­tion is that a mas­sive amount of peo­ple from Kryvyi Rih, as the only re­main­ing in­dus­trial cen­ter in Ukraine which brings not a bad amount of dough to the state, have started leav­ing en masse,” said Yury Samoylov, head of the Kryvyi Rih Con­fed­er­a­tion of Free Trade Unions. “Be­fore, the city was re­ally a com­pany town, and peo­ple rarely left.” The dwin­dling num­ber of avail­able work­ers is plac­ing pres­sure on Arcelor­mit­tal to raise wages, as the fac­tory’s trade unions push for an av­er­age wage of 1,000 eu­ros per month. But the plant’s up­per man­age­ment sees costs un­ac­cept­able tibil­lion-dol­lar ect cru­cial as­so­ci­ated to the threat fac­tory with com­pany’s to higher mod­ern­iza­tion an am­bi­tious, global salaries strat­egy. as proj- mul- an chief Ac­cord­ing pro­cure­ment to Arcelor­mit­tal of­fi­cer Girish Kryvyi Sar­dana, Rih “Peo­ple are mi­grat­ing to Poland, to the Czech Re­pub­lic, to other coun­tries.” “Whether you in­crease the salary or what­ever you do, the short­age will re­main,” he said. “We can raise the salary but then we have to de­fer more projects.”.

Mas­sive his­tory, re­duc­tions

For most of its his­tory, Arcelor­mit­tal Kryvyi Rih has been known by its orig­i­nal, Soviet name: Kryvoryzh­stal. A mas­sive mo­saic fea­tur­ing shirt­less steel work­ers and Vladimir Lenin (the plant’s first name­sake) still greets the fac­tory’s 24,000 work­ers as they en­ter and exit their daily shifts. Soviet au­thor­i­ties or­dered a steel plant built in the iron-rich Kryvyi Rih in 1931, forc­ing thou­sands of con­struc­tion work­ers and engi­neers to move to the city. The first blast fur­nace started work­ing in 1934. By the 1970s, Kryvoryzh­stal was one of the largest steel mills in the Soviet Union, with its ninth blast fur­nace hav­ing the world’s largest smelt­ing ca­pac­ity. Af­ter in­de­pen­dence, the plant un­der­went a failed pri­va­ti­za­tion at­tempt in which var­i­ous oli­garchs tugged at the fac­tory, un­til it was auc­tioned in 2005 to Mit­tal Steel for $4.8 bil­lion. The new, In­dian man­age­ment in­her­ited a fac­tory with Soviet sys­tems and so­cial­ist obli­ga­tions to its work­force. Since then, the fac­tory has fired thou­sands of work­ers in the name of ef­fi­ciency, re­duc­ing the amount of work­ers from 57,000 to to­day’s fig­ure of 24,000. “What was the 57,000?” asked HR di­rec­tor He­len Pilipenko. “Cater­ing, medicine, the so­cial sphere, and agro­farm­ing — pigs, cows, milk­ing them, etc.” “We had 12,000 pigs here,” added

oc­cu­pa­tional Tes­lyuk. had farm­ing blood work­ers Arcelor­mit­tal's fo­cused into buy­outs. con­tin­gent Tes­lyuk the on health elim­i­nat­ing work­force,” per­son­nel said and while that safety “bring­ing the of­fer­ing man­age­ment man­age­ment chief steel Sergey young mill’s older di­vi­sion in es Arcelor­mit­tal terms ad­min­is­tra­tor likes of pro­duc­tiv­ity. pro­duces to frame Yuriy 199 its Ro­mas Hu­man work­force tons of said steel re­sourc- is­sues that per per­son, per per­son. roughly half of Azovstal’s 415 tons place,” “In terms he said. of pro­duc­tion, “We pro­duce we’re two in times fifth less per per­son than our [Ukrainian] com­peti­tors.” Union of­fi­cials ar­gue that Arcelor­mit­tal Kryvyi Rih dif­fers from oth­ers steel mills in that it has the whole pro­duc­tion cy­cle — from min­ing ore to smelt­ing steel — in­te­grated within the plant, mean­ing that pro­duc­tion per per­son will in­evitably be lower. “We’re los­ing both head­count and in­flu­ence,” Samoylov said. “We want to know that our pay will be drawn nearer to Euro­pean stan­dards over a ne­go­tiable pe­riod of time.”


Arcelor­mit­tal lion into mod­ern­iz­ing has in­vested the plant around since $4.8 2005, bil­match­ing the pur­chase price. Ac­cord­ing to chief tech­nol­ogy of­fi­cer Vi­nay Ti­wari, the fac­tory is in the midst of an am­bi­tious, multi­bil­lion-dol­lar cam­paign to im­prove its steel­mak­ing process while re­duc­ing its eco­log­i­cal foot­print in line with an agree­ment signed un­der the pri­va­ti­za­tion. Many of the mod­ern­iza­tion plans will lessen the amount of coal ash re­leased into the air, while one ini­tia­tive will nearly elim­i­nate the need for large natural gas pur­chases in steel­mak­ing. The Euro­pean Bank for Re­con­struc­tion and De­vel­op­ment re­cently gave the fac­tory a $350 mil­lion loan to up­grade the fac­tory’s iron ore re­fin­ing pro­cesses and to add new lin­ing to a blast fur­nace. Ti­wari framed the im­prove­ments as tar­geted at en­vi­ron­men­tal pro­tec­tion and com­pet­i­tive­ness. “If they can be a part­ner in build­ing up a good en­vi­ron­ment for so­ci­ety, then why not,” he said of the loan. From a broader per­spec­tive, the com­pany’s Kryvyi Rih fac­tory is key to the com­pany’s strat­egy of in­creas­ing mar­ket share in sup­ply­ing steel to Africa and Latin Amer­ica. the “This mill, year and will we will start do to a pro­duce mod­ern­iza­tion re­bar coil, of which is very good for the mar­ket of Latin Amer­ica and Europe,” said mar­ket­ing of­fi­cial Evgeny Irhin. He added that the loss of the Rus­sian mar­ket due to war and the loss of the Egyp­tian mar­ket due to heavy tar­iffs had forced the fac­tory to re­ori­ent it­self. “It’s a wide op­por­tu­nity to di­ver­sify,” he said, adding that two new con­tin­u­ous cast­ing plants would open up a new av­enue of sales for cus­tomers only will­ing to take that type of steel.

Brain drain

March and to ers reg­is­ter “There a were head. stag­nat­ing 2018 a gath­ered, was la­bor saw a protest, dis­pute,” salaries ten­sions which sig­na­tures at said we the over then Galin­sky, plant job of used losses work- come the to union ary Ukrainian The was or­ga­nizer. fac­tory’s Hr av­er­age. 10,278 2017 ($391), av­er­age slightly monthly above sal- the away. Other con­di­tions are push­ing work­ers Kryvryi Rih it­self is fa­mous in Ukraine for its pol­lu­tion, known as a punch­line by many for the red-tinted snow that falls in the win­ter due to the high level of iron par­tic­u­lates in the air. Yel­low fog grips the town in the morn­ing, and it’s dif­fi­cult to find a place in the town that doesn’t smell vaguely of sul­fur or ash. The fac­tory has agreed to raise salaries by an av­er­age of 25 per­cent, but union or­ga­niz­ers are push­ing for more. “Pay is higher ev­ery­where else in Arcelor,” Galin­sky said. “Peo­ple are quit­ting in brigades.” Pilipenko, the plant’s HR man­ager, framed the is­sue in terms of so­cial sta­bil­ity. “Imag­ine for one sec­ond if there was 1,000 euro pay at this fac­tory,” she said. “When next door, teach­ers, medics, are re­ceiv­ing five or six.” “Would that be a real col­lapse, or not?”

A worker at Arcelor­mitt­tal Kryvyi Rih op­er­ates con­trols in­side one of the steel mill's blast fur­naces. The fac­tory has been rat­tled by strikes in re­cent months amid a push by the plant's unions to raise pay. (Kostyan­tyn Ch­er­nichkin)

Arcelor­mit­tal Krivyi Rih is fight­ing off ef­forts by its unions for rad­i­cal pay in­creases, claim­ing that rais­ing salaries would slow down a mod­ern­iza­tion plan key to the com­pany’s busi­ness strat­egy.

Newspapers in English

Newspapers from Ukraine

© PressReader. All rights reserved.