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.
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