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U.S. Steel, Steelworkers Seek to Share the Pain

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After dragging on for months, contract talks between U.S. Steel and the United Steelworkers finally yielded an agreement last month, which was awaiting ratification by union members as of MCN’s press time. If approved, the three-year deal will cover 18,000 employees at U.S. Steel’s flat-rolled and iron-ore mining operations, plus tubular operations in Fairfield, Ohio, and Lone Star, Texas. Details of the pact aside, what the membership is actually voting on is how the two sides will share the pain caused by the illegal dumping of steel in the U.S. As USW International Vice President Tom Conway said, “Our members were determined throughout this process not to be made scapegoats for the problems of unfair trade and global overcapacity.”

Bargaining between the company and the union began in June in the midst of a crisis for American steelmakers. Steel prices had plunged dramatically due to the surge of low-priced imports and historically low oil and natural gas prices that sharply curtailed drilling in North America’s oilfields. Negotiating a labor contract at a time when the mills face such an urgent need to cut costs, and the unions such an urgent need to save jobs, no doubt added to the tension. To their credit, it appears the two sides found some common ground in a common enemy. “We believe this competitive three-year contract further supports the mutual success we have had with the USW in confronting the unfair trade that is significantly impacting our industry,” said Mario Longhi, president and CEO of U.S. Steel.

While union negotiators acknowledged the mill’s need to downsize some operations and reduce capital spending, they stayed firm in their opposition to a two-tiered wage system that would pay less to new hires, according to the Pittsburgh Post-Gazette, which obtained a copy of the contract. They did agree to higher co-pays for workers’ insurance claims, but not a contribution to health care premiums. Along with the shared pain, the contract reportedly provides for shared gain should the market turn around. If U.S. Steel makes $50 per ton of steel shipped, workers would get 15 percent of the profit. If profits are in the range of $10 to $50, workers would receive 7.5 percent, the same as in the last contract, the newspaper reported.

Representatives from the USW and Allegheny Technologies, Inc., met with a federal mediator late last month to renew negotiations in light of the U.S. Steel settlement. Bargaining between the Steelworkers and ArcelorMittal was set to resume Jan. 4. Hopefully, they will recognize their common interest, as well. The entire steel supply chain has a stake in how amicably and productively the mills can work with their unions as the market strives to recover in the next few years.