Contract Negotiations Begin for USW Workers at ArcelorMittal

USW says it expects to meet with management in July 6 in Pittsburgh and will be “prepared to receive, review and discuss a ‘comprehensive’ contract proposal from the company.”

ArcelorMittal will likely be asking for concessions to meet competitive pressures. The following statement was received by SMU from an ArcelorMittal spokesperson:

“We look forward to the upcoming negotiations with the United Steelworkers (USW) as it will be an important opportunity to discuss the competitive pressures affecting integrated steel producers.

“Fixed costs are a central theme in this round of negotiations, and ArcelorMittal USA is seeking parity in our labor cost structure with other integrated producers and material providers that have workforces represented by the USW. A USW contract that puts the company at a competitive disadvantage to our industry peers also puts ArcelorMittal and our USW represented workforce at a significant disadvantage, creating risks for both organizations. With wages and benefits that are already more than double the national manufacturing average, we are asking for the union’s support in helping us keep good middle-class jobs in America.

“Communicating expectations or certainties with our stakeholders, including the media, is challenging during this process. What we do know is there hasn’t been a strike at ArcelorMittal USA or our predecessor companies in more than 20 years. We believe this is because the parties have learned from the past and, while we may have our differences, there is too much to lose in a business with a competitive landscape such as ours.”

There is a clause in the September 1, 2012 contract prohibiting strikes and lockouts that would end when the contract expires.

Allegheny Technologies, a specialty metals producer, is currently in negotiations for a new labor agreement to replace the one expiring June 30, 2015. Allegheny, like ArcelorMittal, is feeling the pressure of foreign imports and domestic competition and is asking for concessions from its union workers on health care, compensation, and work hours. The company is making contingency plans in case a strike or lockout occurs if a new labor agreement fails to be negotiated before the deadline.

There is concern that ArcelorMittal, which had contentious negotiations in 2012, will face a similar situation in 2015.

ArcelorMittal CEO Andrew Harshaw has begun a series of articles in the blog segment, Raw Material, of the company website to address issues of pension, health care, fixed costs and competition.

“In order to remain a viable part of the steel industry, ArcelorMittal USA must achieve parity with regard to labor, medical and retiree costs as compared with other integrated steel producers, mini-mills and competing material producers,” wrote Harshaw in a recent blog. “An exact match is not required in order for us to survive, but a more level playing field would help ArcelorMittal USA take the lead in a very competitive market.”

U.S. Steel Corp. contacts will also expire on September 1, 2015. The steel industry will be keeping a close watch the negotiations as a labor-related disruption to production will affect both supply and pricing.