After a long phase of internal crisis, the multinational Swiss aluminium company Alusuisse announced the closure of the last aluminium smelter in Switzerland in 1993. Company management claimed it was no longer profitable due to the falling market prices for raw aluminium. 

This smelter was located in the small village of Steg in the remote, mountainous region of Upper Valais in the South of Switzerland near the border with France and Italy. In all, 200 mostly unskilled workers, including some migrants from the neighbouring Italian town of Domodossola, would lose their jobs. The closure represented  a turning point for this poor and sparsely populated region in the Alps. 

Switzerland was in crisis. Many production plants were being reorganised, while unemployment figures soared. For the workers at Alusuisse and their families, the closure of the smelter in Steg was the first step towards the deindustrialisation of the whole of Valais. They feared mass unemployment. A cross-party protest movement emerged and tried to prevent the closure or at least mitigate its effects. But it largely failed, though Alusuisse postponed the closure. 

It was not primarily the protest of the workers and the community that led to this decision. Rather, the closure was halted because local government offered Alusuisse favourable incentives. When these subsidies then expired in 2006, the smelter was closed by Alusuisse’s successor, Alcan. All 160 of the remaining workers lost their job and the production of aluminium in Switzerland came to an end. 

Unlike other countries, including neighbouring France and Italy, deindustrialisation is hardly ever discussed in Switzerland. Nor is there much historical research. This seems somewhat paradoxical, as Switzerland was one of the most industrialised countries in Western Europe until 1970. In the mid-1970s (and again in the 1990s), the manufacturing industry was hit hard by several successive economic crisis. 

We are researching the story of the smelter in Steg and its protracted closure, not because this is a tale of a decisive struggle which would determine the future of an entire region (it is not). Rather, we see it as a minor but important example of how deindustrialisation – and in particular the fear that it induced in working-class communities – is playing out in a peripheral and poor region for the benefit of a multinational corporation. 

There are two important features of the Steg story that we would like to highlight: 

First, we must consider the importance of pacified industrial relations in Switzerland since the late 1930s, which still prevailed into the 1990s. The so-called «labour peace» meant that trade unions were legally obliged not to strike. As a result, the Valais trade unions did not consider direct action against Alusuisse when the mass redundancies were announced in Steg. 

The long-standing mentality of the Swiss trade unions and the resulting demobilisation of the working class (which was an essential part of the country’s economic boom in the 1950s) meant that the large companies could do as they pleased. Trade unions generally refrained from both public protest and mobilising the workers to directly oppose corporate policies of restructuring, downsizing and factory closures. Options were limited – as was the ability of the trade union movement to imagine alternative development paths in Steg. 

A second feature is Alusuisse’s successful tactic of blackmailing the local government into offering genereous tax breaks and subsidised energy tariffs to avoid the closure. We believe that this issue is not solely a Valais-specific phenomenon. We must therefore analyse the closure of factories and the subsequent relocations in terms of the local and regional balance of power within a changing international division of labour. 

The protracted closure of the smelter in Steg shows how a multinational corporation deliberately uses fear to keep production costs low. As workers correctly understood, Alusuisse’s threat to deindustrialise Valais was corporate strategy. The fear of mass unemployment, rising social costs, and pressure to emigrate were mobilized to advance corporate interests. As long as the local government offered direct and indirect subsidies, the smelter continued to operate. Every couple years thereafter, Alusuisse (and later Alcan) threatened to close the factory. As a local Valais newspaper wrote in 1995, it was a case of «management by stop-and-go-and-stop-and-go-and-go again». 

These two factors –  a reluctant trade union movement that refused to mobilise its workers and a multinational company that used the politics of fear to threaten local communities – led to an unusual outcome. While Alusuisse postponed the closure of the smelter in Steg (which was good for the workers), it was clear that the factory was doomed. It was only a matter of time. 

Regional deindustrialisation often presents itself as an uneven story full of contradictions and ruptures. It is certainly not the result of a «natural» evolution of the economy towards the service sector, but rather a question of power. We see it as a contested, open and possibly reversible process in which the regional balance of power between capital and labour plays the decisive role.