The United Steelworkers and ArcelorMittal kicked off contract negotiations in Pittsburgh, and the union said the steelmaker is seeking major concessions that would affect thousands of workers across Northwest Indiana as it continues to lose market share to mini-mills.
The union said the Luxembourg-based steelmaker wants cuts to incentive pay, vacation pay, family and medical leave, funding for the Institute for Career Development and health insurance, as well as to make changes to sickness and accident, severance, supplemental unemployment policies. ArcelorMittal proposed doubling monthly health care contributions for retirees, eliminating the $10,000 pension equity plan for former ISG employees, and forcing employees to pay $200 a month premiums for a lesser Preferred Provider Organization health care plan or to switch to a "consumer-driven" health care plan with $8,000 a year in out-of-pocket costs.
"The company’s initial proposal fails to include any wage or pension increases or specific commitments to invest in the future of our facilities, even though the market for steel and the products we supply has improved dramatically from the historic lows we experienced in 2015," USW said in a press release. "Clearly, our committee has much work to do when bargaining resumes in Pittsburgh on Monday, July 16."
ArcelorMittal USA President and CEO John Brett said the steelmaker needs to be more competitive as it loses ground to mini-mills.
"We still struggle with global overcapacity, and imports continue to be of concern," Brett said. "New steel mills are being built in our country, and mini-mills are expanding both their capacity and capability. In fact, some sophisticated steels that were once only available through integrated manufacturers can now be produced by mini-mills, thanks to advancing technologies. In the past 10 years, integrated mills have lost another 10 percent of market share to mini-mills, which now account for 70 percent of the market. This fact highlights our continuous need to be cost competitive."
Brett said the steelmaker needed to bring its costs down to compete with other U.S. steelmakers, both mini-mills and integrated producers.
"While the company and the USW are committed to achieving long-term sustainability for our USA business, bargaining is not a quick process," he said. "In fact, in our last cycle, it took nine months for both parties to reach an agreement. We ask our employees and stakeholders for their patience throughout the process. While the company and the USW are committed to achieving long-term sustainability for our USA business, bargaining is not a quick process."
The last contract was negotiated three years ago during the depth of the steel market downturn and did not include any pay increases, though the USW was largely able to protect health care benefits ArcelorMittal wanted to cut. The collective bargaining agreement expires on Sept. 1, though the USW could agree to continue to work under the current contract if a new deal isn't reached by then.