By John W. Miller 

This is the week when steelworkers take to the factory gates to march in solidarity, make speeches and chant slogans.

With a Sept. 1 deadline looming for notching a new three-year labor deal with two of the country's top steelmakers, the United Steelworkers union is organizing a "week of action for fair contracts."

The 30,000 workers whose wages and benefits are being hashed out this summer in Pittsburgh hotel rooms will rally at a dozen or so sites run by U.S. Steel Corp. and ArcelorMittal USA LLC.

Both workers and the companies are struggling. Steel prices in the U.S. have tumbled more than 20% since Jan. 1 because of inexpensive imports, a sluggish economy and the collapse of oil prices that has hurt demand for steel pipes and tubes used in oil and gas drilling. Both companies have closed plants and laid off workers. U.S. Steel lost $261 million in the second quarter.

These labor talks are the first in a generation to be held during a down market. During the past two negotiating sessions--in 2008 and 2012--prices were strong. Workers had bargaining leverage, and they negotiated solid blue-collar paychecks including health-care benefits and wages well over $50,000 a year.

This time around, the shoe is on the other foot. The companies say they need a more favorable deal to stay in business.

"We cannot base our 2015 contract on a hope that a return to a new steel and commodities boom is ahead," said Bill Steers, a spokesman for ArcelorMittal.

Workers don't see it that way.

Management, USW says on its website, is using a "temporary downturn in the domestic steel market as an excuse to permanently gut workers' contract language and benefits." The rallies are being held to "show management that we're strong and united and ready to do whatever it takes to win a fair contract."

They're upset, among other things, about U.S. Steel CEO Mario Longhi receiving a $7.6 million compensation increase as he issued layoff warnings to over 9,000 workers. Mr. Longhi said in May that his raise had generated "a lot of noise" because it was announced around the time of the layoffs.

"They want us to give concessions, yet they make millions," said a worker at a U.S. Steel facility, who declined to be identified for fear of losing his job. "So, yes, people are upset when you hear they want us to pay for insurance, change vacation structure and so forth."

At the heart of the contentions: health care.

The companies want to raise health-care premiums for U.S. workers and retirees.

Not having workers pay some health-care costs puts the company "in an unfair position," ArcelorMittal Chief Executive Lakshmi Mittal said in a recent interview.

ArcelorMittal has proposed freezing pay, cutting total compensation for some workers and requiring monthly health-care premiums of $150 for individuals and $250 for families. U.S. Steel has a similar proposal.

The current health plan at both steelmakers doesn't require workers to pay any premiums, while at similar industrial companies, employees make significant contributions to their medical benefits package.

Officials at the union, and U.S. Steel, declined to comment.

Health-care premiums are also a big issue for the United Auto Workers union, which is negotiating a new contract with Ford Motor Co., General Motors Co. and Fiat Chrysler Automobiles NV, with a Sept. 14 expiration. Like steelmakers, car companies say rising medical costs are unsustainable.

UAW President Dennis Williams is also keen on finding new ways to keep health-care costs in check, rather than shift more of the cost burden onto members. Combined, Ford, GM and Fiat Chrysler will spend more than $2 billion a year on health-care costs for its U.S. hourly workers in 2015, or about $14,800 per worker.

The USW rallies will range widely. On Wednesday afternoon, for example, there will be a "Solidarity in Steel" rally in Steelton, Pa., near an ArcelorMittal plant. A "Solidarity on the Iron Range" rally will be held Thursday afternoon in Virginia, Minn., for workers at an iron-ore mine co-owned by both companies and Cliffs Natural Resources Inc. A "Day of Action and Solidarity" will take place Friday morning in Braddock, Pa., site of U.S. Steel's last big Pittsburgh area mill.

Christina Rogers contributed to this article. The Week Ahead looks at coming corporate events.

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

Arcelor Mittal (NYSE:MT)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Arcelor Mittal Charts.
Arcelor Mittal (NYSE:MT)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Arcelor Mittal Charts.