Workers say the biggest issues are the company's demands for a four-year contract, the institution of bonuses, and a wage hike that may not keep up with the rising rate of inflation. The wages and working conditions of aluminum workers, once among the best paid in Iceland, have worsened relative to others in Iceland as a result of a long-term company assault.

For example, there has been a 90 percent increase in production over the past 10 years. At the same time the number of workers employed was slashed by 13.5 percent. On the average this equals a production increase of 120 percent for each worker over the past decade.

The aluminum workers' vote took place less than two weeks after the state negotiations committee reached an agreement with the teachers union, which had been on strike for two months, the longest in Iceland for decades. The teachers won a considerable pay raise as a result of their fight.

In late January fishermen voted to go on strike in the middle of March if they have not reached a labor agreement by then. One indicator of the increase in labor disputes here is a government announcement that in 2000 there were more hours logged at the state negotiators table than any year since 1980.

The aluminum industry is the second largest in Iceland after fishing. Last year aluminum accounted for 18 percent of the foreign trade compared to 67 percent for fishing products. In a drive to make Iceland the second largest aluminum producer in Europe by the end of the decade, the ruling class here plans to further expand production. Building aluminum plants in Iceland is attractive to capitalist investors because of the cheap energy prices and low labor costs. The electricity is generated from dams and geothermal power plants, both of which are renewable resources.

Today there are two large aluminum plants in Iceland. The ISAL plant in Straumsvík is owned by the Canadian and Swiss company, Alcan. It is situated 10 miles south of the capital city of Reykjavík. The plant, in operation since 1969, produces about 168,000 tons of aluminum a year.

Nordural, opened in 1998, is owned by Colombia Venture, a U.S.-controlled operation, and is located in Hvalfjordur, about 20 miles north of Reykjavík. Nordural currently produces 60,000 tons and plans to expand production to 240,000 tons a year. The company says that with new technol-ogy they estimate a production increase of up to 300,000 tons annually.

A group of Icelandic capitalists and the Norwegian company Hydro aluminum are seeking to build another plant on the east coast that would produce 360,000 tons of aluminum a year.

But these plans have sparked some disagreement within the ruling class over whether to grant permission to build the plant on the east coast or give Colombia Venture permission to expand.

At issue is the need to increase electrical production by building a huge hydroelectric power station. This has caused widespread debate here due to the dam's impact on the environment.  
 
Contract issues
The new contract was to give the workers an immediate 20 percent wage increase and another 3 percent each January for the next four years. In addition workers would receive productivity, "safety," and other bonuses, called "licking bonus" by the workers. The employers have repeatedly tried to institute an extensive bonus system over the years, in particular after the plant was set up, but without lasting success.

Workers voted the contract down mainly for two reasons. Many oppose the bonus system and view it as a way for the company to kill workers' morale and pit them against each other.

The other reason is the length of the contract, which is four years. Inflation has been running between 3 percent and 6 percent last year. At the same time the Icelandic krona has fallen drastically compared to the U.S. dollar, cutting further into workers' buying power.

At the moment, the workers are still debating various aspects of the contract. They have not been told what the union officials or the company are going to do, but as one worker put it, "We voted this contract down and we can do it again."  
 
 
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