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USW alleges U.S. Steel 'playing a dangerous game of chicken'

United Steelworkers union members rally for a fair contract outside Gary Works earlier this month.

The United Steelworkers union is accusing U.S. Steel of "playing a dangerous game of chicken with the markets, steelworkers and America," as the possibility of the largest strike in more than three decades looms over ongoing contract talks.

U.S. Steel employees across the country voted overwhelmingly to authorize a strike as the USW and U.S. Steel return to the bargaining table. The company has proposed a six-year contract it said would mean stability for families, a slight increase to 401(k) plans and a raise of 4 percent in the first year and 3 percent in each of the next two years.

The union objects to out-of-pocket health care costs that would in some cases reduce workers' overall compensation, a switch from traditional pay raises to profit-sharing over the last three years in a six-year contract and a reduction in retiree benefits.

"Our current labor contracts are under an extension agreed upon by both parties," U.S. Steel said in a statement. "Our plants continue to operate in a safe and orderly fashion. While we are aware of the strike authorization vote, talks are ongoing and we continue to work diligently to reach a mutually agreeable conclusion."

USW Rapid Response Coordinator Richard Cucarese said in an update to members that the company's latest contract proposal was "regressive and damaging," and that U.S. Steel was risking "the possibility of the largest work stoppage in the domestic steel industry since 1986." 

"Over the past few months, with their labor contract set to end, USW members felt confident their hard-fought efforts to help restore the corporation to its best financial position in a decade would be rewarded," Cucarese said. "But CEO David Burritt had other plans, approaching the contract negotiations with an insulting offer of minimal pay raises that would immediately be wiped out by astronomical increases in what workers would have to pay for health insurance over a proposed six-year period. Burritt wanted to eliminate overtime rules, give the corporation the ability to shorten work weeks with no notice, change health plans with no notice and institute a plethora of other injustices that would wipe out 70 years of USW collectively bargained improvements for workers."

The steel industry has been booming with the Section 232 tariffs of 25 percent, and steelworkers want a share of the profits their work creates, Cucarese said.

"Burritt also is playing a dangerous game of cat-and-mouse with his shareholders, who may abandon ship, feeling a work stoppage at this critical juncture would injure the company, plunging U.S. Steel back into single digits and poor bond ratings and preventing needed investments in the mills from ever taking place," Cucarese said. "Lastly, Burritt is playing a dangerous game with the Steelworkers. Burritt and his upper echelon executives lavishly have rewarded themselves with over $40 million dollars in compensation since 2015. In addition, they gave shift managers $10,000 to $30,000 annual bonuses. Meanwhile, Steelworkers scraped by without raises for years and thousands at the Granite City, Ill., mill remained idled, wondering if they’d ever work again."

Steelworkers made concessions during the last round of contract talks when the industry was struggling, Cucarese said.

"Just three years ago, U.S. Steel was on the verge of bankruptcy, a situation caused by a mixture of bad business decisions, poorly timed austerity measures and illegally subsidized, underpriced Chinese steel dumped onto world markets," he said. "It was at this time that the steelworkers agreed to freeze wages over three years and give up the guarantee of a 40-hour work week, reducing it to 32, in the hopes that when the company rebounded, it would reward the workforce in the next round of contract talks."

Any strike at U.S. Steel would affect an estimated 16,000 workers nationwide, including thousands in Northwest Indiana.

The union would have to give the company 48 hours notice before any work stoppage.

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.