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Steelworkers approve new contract with U.S. Steel

Thousands attend a union steelworkers rally outside the gates of Gary Works. Steelworkers voted by a 2-to-1 margin to approve a new three-year deal with U.S. Steel.

After six months of negotiations and uncertainty for thousands of Northwest Indiana families, it's finally over.

United Steelworkers voted by a 2-to-1 margin to approve a new three-year deal that would freeze their pay but keep their health insurance benefits largely intact and boost profit sharing. Retirees will have a slight increase in out-of-pocket costs, and laid-off workers will get supplemental unemployment benefits.

The new contract, which takes effect immediately, covers 18,000 U.S. Steel employees, including at Gary Works, East Chicago Tin and the Midwest Plant in Portage.

"We are pleased with the outcome of the ratification vote," U. S. Steel President and Chief Executive Officer Mario Longhi said. "We believe these three-year agreements are in the best interests of our company, our employees and all of our stakeholders."

The contract has no-strike provisions and expires on Sept. 1, 2018.

The union said the six months of negotiations had been extremely difficult, but it was able to hold the line by resisting big out-of-pocket expenses for health care, including significant premium contributions.

"We are proud of the productive relationship we've built with U.S. Steel," USW District 7 Director Mike Millsap said. "We hope to build on it as we move forward from what has been a very challenging year."

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Negotiations started back in June, and U.S. Steel initially wanted major cuts in pay and benefits that would have cost workers as much as $6,300 a year in out-of-pocket health care extensions. The Pittsburgh-based steelmaker, which lost $1.5 billion last year and has been looking to cut costs, also wanted work rule changes the union objected to.

Neither side wanted a work stoppage, so they agreed to keep talking under the old deal when it expired on Sept. 1. They traded proposals back and forth and the USW held the line on health insurance. The new deal freezes pay for the next three years, but boosts profit-sharing so workers would get bigger bonuses when the company becomes profitable again.

"The past year has been a difficult one for the steel industry, for USW members, and for manufacturing towns all across this country," USW International President Leo W. Gerard said. "The key to weathering this crisis is not to attack each other, but to work together to find solutions to our common problems — namely the severe imbalance and unfairness in our trade system. This must be our shared goal as we move forward."

The two sides reached a new contract after a rough year for the industry, when 12,000 steelworkers nationally lost their jobs, Indiana Harbor Long Carbon got idled and operations were scaled back at East Chicago Tin. U.S. Steel and other domestic steelmakers have been weathering an import crisis caused largely by China, which exported a record 120 million tons of steel last year, flooding the world market and leading other countries to illegally dump their steel.

But the union stayed strong, USW International Vice President Tom Conway said.

"I am extremely proud of the solidarity and the commitment to fairness that the Steelworkers showed throughout this process," said USW International Vice President Tom Conway, who led the union's bargaining committee. "These hard-working men and women were determined not to be made scapegoats for what is a global crisis."

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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.