Sept. 16, 2015

Steel Industry Anxiously Awaits New Labor Pacts

As unions and management continue to arm wrestle over their next contract, the steel supply chain is left to ponder the potential effects of a strike or some other type of job action.

Talks between the United Steelworkers and ArcelorMittal broke down two weeks after the two sides agreed to continue negotiating beyond the previous contract’s expiration. The old deal expired Sept. 1. “Our committee delivered a comprehensive proposal to ArcelorMittal management that would meet the needs of active and retired Steelworkers, while maintaining benefits and saving the company millions of dollars in expenses and liabilities. The company’s response was not what we hoped. Instead of staying and engaging in good faith negotiations, management has walked away from the table,” read a statement from the USW. No response from ArcelorMittal.

While no deal has been worked out between the USW and U.S. Steel, and the negotiating committees put further negotiations on a two-week hiatus, there seems to be less acrimony in their talks. A notice on the USW’s website indicated the two sides remain far apart, but they have made “some significant progress this summer on some important issues.”

In contrast, the situation remains tense at Pittsburgh’s Allegheny Technologies, Inc., where workers have been locked out since mid-August. ATI claimed before the lockout it had made its “last, best and final offer,” and has not resumed bargaining since then.

Despite these standoffs, it is another set of labor talks that may be more meaningful to steel service centers and toll processors. The most recent agreement between the United Autoworkers and Fiat Chrysler Automobiles expired on Monday, though the two agreed to extend the deal while talks continue on a new four-year agreement. Negotiations with GM and Ford will follow an agreement with FCA.

There are signs the auto industry talks will yield a contract without any disruptions. At the recent SMU Steel Conference in Atlanta, John Anton of IHS Global Insight said it appears the automakers do not anticipate a strike. If they did, they would have done more to build up vehicle inventories. “If there is a strike, they are in trouble because they don’t have product to sell,” he added.

Peter Meyers, vice president of ferrous sales and marketing for recycling company Metalico, Inc., said the auto industry negotiations actually are the more important ones for the metals supply chain. A labor disruption on the steel side could slow production and reduce the current oversupply in the market, improving pricing. “If the United Autoworkers go on strike, and auto plants stop buying steel, there will be immediate and very negative effects on the steel industry,” he said.


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Monday, October 23, 2017