U.S. Steel's labor contract includes significant increases

Joe Napsha
| Wednesday, Aug. 13, 2008

The United Steelworkers on Tuesday heralded a tentative four-year labor contract it reached with U.S. Steel Corp. as one that will "set a new standard for the industry" because it includes "very significant" wage and benefit increases.

The proposed settlement that covers 16,000 steelworkers at 12 plants, including about 2,600 in three Mon Valley plants, provides a substantial bonus and improves benefit programs for active employees and retirees as well as reduces health care premiums for retirees, the USW said in a statement. The new contract would replace a five-year pact that expires Sept. 1, if approved by the rank-and-file in a mail-in vote.

"Our union was instrumental in restructuring the industry, and this new contract rewards our members for their hard work, improves the living standards of our retirees, and the capital investments that will be made in our mills protects our communities far into the future," USW President Leo Gerard said in a statement.

The USW and U.S. Steel, both based in Pittsburgh, declined to release details of the tentative agreement reached late Sunday. Presidents of the local unions at the U.S. Steel's domestic plants on Monday overwhelmingly approved the tentative contract, which will be sent to the membership for a mail-in vote that will be counted after Sept. 1, Dickey said.

The contract is competitive and in the best interest of the company and its stakeholders, U.S. Steel CEO John Surma said in a statement.

While the USW was close to reaching an agreement with U.S. Steel, contract talks with ArcelorMittal USA, the world's largest steelmaker, broke off on Friday, union spokesman Gerald Dickey said. Those negotiations affect about 14,000 steelworkers at 14 plants, including a mill in Weirton, W.Va.

The 2008 labor negotiations were conducted as the steel industry is enjoying huge increases in earnings as a result of the jump in global demand and a spike in prices. U.S. Steel last month said it set a quarterly earnings record of $688 million and quarterly sales record of $6.7 billion during this boom time. That was not the case in 2003, when the contract was negotiated while the steel industry was shrinking because of numerous bankruptcies.

Steel industry analyst Charles Bradford of Bradford/Soleil Securities said he understood there was an incentive at U.S. Steel's top level to reach an agreement before the pact expires to show customers there would be labor peace. Bradford said he thought an agreement might have been reached in July, but "it's still pretty good" to get it done in mid-August.

The proposal will be explained to the steelworkers during a series of local union meetings, Dickey said. Local union presidents Joseph Ballas at the Irvin finishing plant in West Mifflin, Chuck Jackson at the Edgar Thomson steelmaking plant in Braddock, and Andrew W. Miklos Jr. at the Clairton Coke Works, could not be reached for comment.

As for ArcelorMittal USA, which is based in Chicago, it said in a statement the parties have made a lot of progress and it expects to resume negotiations this week. The company said it remains committed to reaching a settlement before the Sept. 1 deadline.

Mark Glyptis, president of USW Local 2911 at ArcelorMittal's Weirton plant, could not be reached for comment yesterday.

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