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U.S. Steel contract deal possibly forges path to end of disputes at ATI, ArcelorMittal

| Monday, Dec. 21, 2015, 10:54 p.m.

Two developments this weekend could push a resolution to labor disputes that have dragged on for months between the steel industry and its union.

There was no connection between a tentative contract agreement U.S. Steel Corp. reached with the United Steelworkers union late Saturday and a decision a day earlier by federal officials to pursue unfair labor practices charges against Allegheny Technologies Inc., U.S. Steel spokeswoman Sarah Cassella said.

But U.S. Steel's deal with the union is likely to influence negotiations with other steelmakers, including at ATI where contract talks ground to a halt following the lockout, experts said.

“Chances are U.S. Steel's agreement is going to set the pattern” for concessions the union is willing to accept from ATI and ArcelorMittal, said John Tumazos, a steel industry analyst and owner of Tumazos Very Independent Research in Holmdel, N.J.

U.S. Steel, ATI and ArcelorMittal, the world's largest steelmaker, are dealing with a major downturn in the steel industry caused by weak demand from the energy industry and a flood of cheap imports from China and others. The companies were seeking similar concessions from the union on health care and retirement benefits, worker scheduling and overtime rules.

Officials at U.S. Steel and the Steelworkers union declined Monday to detail the tentative three-year labor pact that covers about 18,000 workers.

ATI, which has more than 2,200 workers covered by a contract that expired June 30, declined to comment. Officials at ArcelorMittal, which employs 13,000 Steelworkers, could not be reached for comment. Arcelor's union contract expired Sept. 1, but workers have remained on the job under terms of the previous agreement.

In negotiations with several companies in one industry, unions typically try to set a general framework for all the contracts and minimize variations between them, said John Delaney, a labor expert and professor at University of Pittsburgh's Katz Graduate School of Business.

“There's room for minor variations,” he said. “But the Steelworkers union will create problems for itself if it accepts widely different outcomes between the companies.”

Despite the desire for consistency, the union is facing different situations with each company, experts said.

ATI's labor costs per worker are higher than U.S. Steel's, Tumazos said.

The union's relationship with ATI management has soured. Union members were incensed earlier this year when it was revealed that CEO Richard Harshman received a 70 percent raise in 2014 despite the company producing a financial loss. And the company didn't garner any goodwill when it locked out more than 2,200 workers from a dozen plants after demanding a union vote on a “last, best and final offer.”

“It appears there's no love lost between the union and ATI executives, and they're going to have to overcome that,” Delaney said.

Pressure could be mounting on ATI management to restart talks with the union because the regional director of the National Labor Relations Board in Pittsburgh on Friday decided ATI violated federal labor law when it started the lockout Aug. 15.

The NLRB decision, which paves the way for a trial before an administrative law judge, could push ATI back to the bargaining table, experts have said. The company has denied the charges and said it looks forward to defending itself.

Meanwhile, ArcelorMittal, which is headquartered in Luxembourg, has union-represented and non-union steel mills in the United States. The company, which owns a coke plant in Monessen, is taking “the hardest position” with the Steelworkers union to more closely align costs between its union and non-union mills, Tumazos said.

“Arcelor has two large plants that are non-union, and they're their most profitable plants,” he said.

But even with those differences, Delaney said it seemed likely that ATI and Arcelor would hammer out deals with the union. “With U.S. Steel settling, can ATI and Arcelor really continue to hold out?”

Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or

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