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U.S. Steel proposes $19,000 in bonuses and 4 percent raise, followed by five 2 percent raises

Steelworkers march and rally for a fair contract outside of U.S. Steel Gary Works last month.

U.S. Steel put forward a new six-year contract proposal that includes a 4 percent raise next year, followed by five annual 2 percent raises, when it returned to the bargaining table with the United Steelworkers union Wednesday.

New hires would make 80 percent as much as current workers, with a 5 percent increase in pay for every 1,040 hours worked, creating a two-tier pay scale that would reduce the company's labor costs.

The USW said in a statement late Wednesday evening that the contract proposal offered no new money, sleight of hand on wages and worse health care coverage. The union said workers would have to pay $2,000 more a year in health care deductibles, drug co-pays and coinsurance.

The Pittsburgh-based steelmaker said it is offering its 16,000 steelworkers nationwide $19,000 in "guaranteed pre-tax cash payments," including a $4,000 signing bonus that would be paid within 30 days.

U.S. Steel also is offering "$6,000 guaranteed profit sharing paid within 30 days of ratification, regardless of company performance" if a new contract is ratified by Sept. 22. It is also offering "$9,000 in transition payments (payable $1,500 per year beginning 2019) to offset employee healthcare costs."

Workers who choose a Consumer Driven Health Plan, which the company says would have no premiums and to which it would contribute $2,000 a year, would qualify for $1,500 a year in "transition payments." They also would get the transition payment if they opted instead for "continued access to a PPO plan comparable to what you have today."

The proposed PPO would require "modest premiums," the company said.

U.S. Steel said its proposal would make "no changes to the current retiree healthcare plan design" save for "small premium adjustments to extend retiree healthcare affordability." U.S. Steel said it will start paying 15 cents per hour worked toward a 401(k) retirement plan under its proposed six-year contract.

United Steelworkers union officials did not immediately respond to the latest company proposal, which addresses union concerns about a proposed switch away from traditional pay raises to variable profit-sharing, but which would take away the current health care plan they have wanted to protect. USW said the out-of-pocket health care costs in previous proposals would even reduce the total compensation of some steelworkers.

U.S. Steel employees around the country overwhelmingly voted in recent weeks to authorize a strike after union leaders expressed concerns about not sharing in the company's recent prosperity after having made sacrifices to help it out of the doldrums a few years ago.


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.