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Steel workers ratify contract with U.S. Steel

| Monday, Feb. 1, 2016, 3:42 p.m.

Union workers at U.S. Steel Corp. ratified a three-year labor agreement that avoids deep concessions on health coverage initially sought by the Downtown-based company as it struggles to stem losses from a major downturn in the industry.

The United Steelworkers union said 18,000 employees covered under the contract voted 2-to-1 in favor of the deal, which includes a wage freeze but only modest increases in health care costs for union members.

The union fought back against an initial proposal from U.S. Steel — which last week reported a $1.5 billion loss for 2015 — that included monthly contributions toward health insurance premiums and a high-deductible health plan when the two sides began talks six months ago.

“I am extremely proud of the solidarity and the commitment to fairness that the Steelworkers showed throughout this process,” Tom Conway, the union's vice president and lead negotiator, said in a written statement. “These hard-working men and women were determined not to be made scapegoats for what is a global crisis.”

U.S. Steel CEO Mario Longhi said the company was pleased by the vote.

“We believe these three-year agreements are in the best interests of our company, our employees and all of our stakeholders,” Longhi wrote in a statement.

John Tumazos, an analyst and owner of Tumazos Very Independent Research in Holmdel, N.J., called the pact “a draw.” Based on a summary of the contract proposal sent to union members, Tumazos said, he estimated U.S. Steel will save between 2 percent and 4 percent a year on costs related to the union workforce.

“Given the kind of money U.S. Steel lost in the fourth quarter ... the union didn't step up to save them,” he said.

The company said it will begin seeing a financial impact from the labor agreement starting in the second quarter this year.

In addition to a wage freeze, the agreement calls for a slight increase in health coverage deductibles and co-payments for workers. But workers will not have to contribute toward the monthly premium for their health plan. New hires no longer will receive company-sponsored health insurance coverage once they retire.

The company also agreed to boost a profit-sharing formula that will distribute more money to workers when U.S. Steel becomes profitable.

United Steelworkers President Leo Gerard acknowledged that steel companies are suffering but said the solution to the industry's troubles would come by lobbying the government for stronger enforcement of trade laws.

Cheap imports, particularly from China, have been blamed by both U.S. Steel and the union for weak prices. The company also has been hurt by weak demand from oil and gas drillers, which have cut production to deal with low prices.

“The key to weathering this crisis is not to attack each other, but to work together to find solutions to our common problems — namely the severe imbalance and unfairness in our trade system,” Gerard said in the union's statement. “This must be our shared goal as we move forward.”

U.S. Steel's settlement with the union stands in contrast to ongoing negotiations at two other steel companies.

Specialty steelmaker Allegheny Technologies Inc. locked out 2,200 USW workers on Aug. 15. The two sides are holding talks with a federal mediator.

ArcelorMittal, which employs about 13,000 USW members, has been in talks with the union since the summer and workers remain on the job.

Labor experts have said the union's deal with U.S. Steel could establish a model for negotiations with ATI and ArcelorMittal.

Alex Nixon is a Tribune-Review staff writer. Reach him at 412-320-7928 or anixon@tribweb.com.

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