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U.S. Steel proposes raises of 3.25, 2 and 1 percent that USW calls insulting

USW workers march from downtown Gary to U.S. Steel Gary Works on in 2015 in Gary.

U.S. Steel proposed signing bonuses of $1,500 and raises of 3.25 percent, 2 percent and 1 percent over the next three years, at which point the Pittsburgh-based steelmaker would phase out traditional raises and replace them with profit-sharing bonuses that may or may not materialize.

The United Steel Workers union describes the steelmaker's seven-year contract proposal as "an insult."

"U.S. Steel calls this a transformational proposal because in the future any wage increases and economic adjustments would come solely through their profit-sharing bonus schemes," USW said in an update to members.

"After our many sacrifices and diligent work to keep this company in operation through tough times, and the misery our members have suffered in many locations, this is an extremely insulting proposal."

Under U.S. Steel's contract proposal, three years from now, raises would be replaced with lump sum annual bonuses of up to 5 percent of wages, based on if the worker works in Flat roll or Tubular, and if revenue hits annual targets set by management. Workers could get nothing if Earnings Before Income, Taxes, Depreciation, and Amortization fails to reach the prescribed goals.

Local steelworkers who haven't gotten a raise from U.S. Steel in six years would be eligible for the annual profit-sharing bonuses and get no conventional raises during years four to seven of the proposed contract.

New hires for production jobs would be paid 80 percent of what steelworkers earn now and would be put on a different health care plan with deductibles of up to $3,200 and out-of-pocket maximums of $6,000 a year. Those benefits would be slashed in half if new hires got laid off.

U.S. Steel is asking workers for 25 percent monthly contributions of $9 to $27 a month to keep their current dental plans, to double health care deductibles and for a family monthly premium of $210.

Pre-Medicare retirees would get their benefits cut and premiums increased to $320 a month in 2019, up from $220 per month today, and by $20 every year thereafter. Pre-Medicare retirement premiums would go up to $580 per month in 2019 and by $50 in each subsequent year, while Medicare-eligible retirement premiums would rise by $10 to $120 per month, and then by $10 each year thereafter.

U.S. Steel's proposal would phase out corporate protection, including successorship, neutrality, right-to-bid, investment commitment, upstreaming and lean management, and also ask for further concessions.

"They talk of alignment with the bosses and then shave and 'normalize' the annual economics and profit-share proposal," USW said in an update to members.

"The U.S. Steel wage proposal is so far off the mark, it is laughable. With time running short, the company needs to come to its senses and make an honest and fair contract with the union and recognize the work we've done at U.S. Steel."

The current contract, which covers thousands of steelworkers in Northwest Indiana, is due to expire on Sept. 1.

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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.