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USW rejects 80 percent health care cost hike, warns ArcelorMittal 'provoking a stoppage'

Steelworkers rally for a fair contract in downtown Gary in August.

The United Steelworkers union is pushing back against what it calls ArcelorMittal's "deeply concessionary demands," including raising health care premiums by 80 percent and out-of-pocket health care expenses for retirees by 80 percent.

The union continues to negotiate on behalf of 12,000 steelworkers at 14 facilities in six states, including at ArcelorMittal's operation in East Chicago, Burns Harbor, Gary, Riverdale, and New Carlisle. But it cautions that frustration is mounting and a strike could loom. Union leaders warned that "ArcelorMittal management is provoking a work stoppage that promises to bring pain to the communities in which it operates."

USW Bargaining Committee Chairman David McCall and Secretary Mike Millsap wrote in an update to steelworkers that negotiators' frustration has been growing since bargaining began in July.

"The company opened negotiations by telling us how much they appreciated our contributions over the previous three years," they wrote. "They admitted that since 2015, our productivity had improved and our health care costs had decreased. The company then began the summer demanding concessions in wages, in both active and retiree health care (including future retirees), in pensions, on security issues and a wide range of other givebacks.

"Since 2015, the company has made a financial turnaround and has generated hundreds of millions of dollars in cash. While they were improving financially, they continually ignored and violated our contract and disrespected our relationship."

ArcelorMittal workers voted overwhelmingly to authorize a strike in mid-September, but the two sides returned to the bargaining table.

The union takes credit for the turnaround of the U.S. domestic industry, partly by forgoing raises for the last three years while steelmakers were struggling and losing money. Steelworker pay has risen only 4.5 percent since 2012 as compared to 15 percent for other private section workers, according to the Bureau of Labor Statistics. It's also failed to keep pace with the 8 percent inflation over that period.

"Our health care plans already require co-pays on medical and prescription drug coverage, deductibles and cost sharing with ArcelorMittal," McCall and Millsap wrote. "We are not abusers of health care — it is, in fact, a part of our compensation. We deserve it and have earned it, and we should not have to fight about keeping health care every time we enter into negotiations. Not only is our health care being attacked, but the promise and commitment for our retiree health care is under constant assault by ArcelorMittal."

Beyond proposing cuts health care benefits, the union said the company refuses to increase pensions to keep up with inflation, won't adjust the profit-sharing formula and is trying to eliminate full-week guarantees and severance pay provisions. The USW questioned the fairness at a time when steel prices are the highest they've been in a decade, the company is highly profitable and executives have paid themselves bonuses.

"The union has sacrificed wages over many years to maintain decent health care coverage," McCall and Millsap wrote. "We have stepped up to help the company significantly reduce its operating costs. Our members and retirees have endured layoffs and losses. In many cases, our pain has been very real personally, in our steel communities and within the businesses we support."

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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.