After three months of negotiations with U.S. Steel that went right up to the deadline, the United Steelworkers union bargaining committee is returning home from Pittsburgh to ask members for a strike authorization vote.
Saturday evening, U.S. Steel announced that the corporation and USW have agreed to an ongoing extension for collective bargaining agreements, which was originally set to expire midnight on Saturday. U.S. Steel also announced that their facilities will continue to operate.
If rank-and-file union members authorized a strike and union leaders chose to take that step, a work stoppage would affect thousands of local steelworkers – 3,875 at Gary Works alone – as well as countless contractors, suppliers and others connected to the steel industry that built Northwest Indiana and remains one of its largest sectors. A strike would be very costly for U.S. Steel during a prosperous time for the steel industry when hot-rolled coil is selling for around $900 a ton.
Union leaders, who have been pushing for pay raises, job security and a preservation of health care and retiree benefits, said U.S. Steel won't budge on deep concessions it's asking from workers that would raise health care premiums up to $237 per month and reduce total compensation by $1.19 an hour for some Labor Grade 3 jobs. The current contract expires at midnight Sunday.
Union locals have scheduled some strike authorization votes for Wednesday.
"The union and company are still far from a fair agreement," the USW said in an update to members. "U.S. Steel continues to demand a six-year contract with deep concessions throughout. It has offered bonus and wage increases the first three years, designed to appear meaningful, but the bulk of their 'bonus' is the profit sharing we will have already earned. There is nothing but financial sleight of hand in the way they now do business."
U.S. Steel did not return messages and typically declines to comment on ongoing negotiations.
The company has proposed signing bonuses of $1,500 and pay raises of 3.25 percent, 2 percent and 1 percent over the next three years, but then would phase out traditional wage increases that would be replaced with variable profit-sharing bonuses that may or may not materialize.
The union bargaining team has criticized the offer, partly because there's no assurance workers would ever see those bonuses and partly because U.S. Steel also is asking for higher out-of-pocket health care costs that would reduce steelworkers' total compensation so there's only a negligible increase and in some cases a loss.
"The company has also demanded cuts in the current active health care program which would double the amount you would pay in deductibles and out-of-pocket maximums," the USW said in an update to members. "It then proposed you pay premiums for your health care plan of up to $237 per month for family coverage in 2019 and rising by 10 percent per year over the rest of the contract. After subtracting these premiums and additional out-of-pocket expenses, the proposed wage increases is actually an average of only 0.2 percent per year for a family."
U.S. Steel also is asking for many concessions, including a high-deductible health plan for new hires, the ability for the company to modify all incentive plans, random drug tests for employees, an elimination of the 40-hour a week guarantee so workers could be reduced to 32 hours a week at management's discretion, not having to first discuss layoffs with the union, and cuts to many different benefits.
"This is a staggering proposal from financial flimflam artists who have spent the last three years taking care of themselves and fattening their pocketbooks at the expanse of everyone, their workforce, customers and even their shareholders," the USW said in an update to members. "They care only for themselves and their behavior is evidence of that."
The union bargaining committee is returning home to schedule informational meetings and strike authorization votes. The union would have the option of striking if members voted to authorize it and would have to provide U.S. Steel with a 48-hour notice of any strike so they could safely shut down operations since blast furnaces must be manned around the clock.
"We will also continue to try to bring the company to their senses, but that authorization is necessary to bring them into the real world," the USW said in an update to members. "The local leadership will then return to Pittsburgh to try to finalize a deal before we take any strike action. Hopefully, the company brings forward a proposal worth your consideration for ratification. Their current one is not.... Hopefully, a strike will not be necessary, but the company continues to ignore the workforce's needs."
New York City-based steel analyst Charles Bradford said there was no indication that U.S. Steel or other steelmakers have been stockpiling inventory so they would be able to continue serving customers during a strike, the way they historically have during contract negotiations.
"Usually, there are no winners," he said.