Steel Mills
USW Ratifies Contract with ArcelorMittal USA
Written by Sandy Williams
June 23, 2016
USW members overwhelmingly ratified a new contract with ArcelorMittal today (June 23). The new agreement covers nearly 14,000 union-represented hourly production, maintenance, and technical workers at the company’s 15 locations through Sept. 1, 2018.
“We have settled our differences with management at the table, so together now we can focus on addressing the industry’s real problems, such as global overcapacity and the unfair and often illegal foreign trade practices that depress prices, close plants and cost jobs,” said USW International President Leo W. Gerard. “The USW negotiating committee, activists and members at each of the facilities deserve our thanks and credit for staying united throughout the long, difficult process.”
The ratification culminates a year of bargaining with ArcelorMittal USA. USW District 1 Director David McCall said negotiations were expected to be tough but the union understood the challenges facing the company and the industry.
“Even though negotiations took much longer than anyone anticipated, the solidarity of USW members within and between each of the facilities enabled our committee to fight for and win a fair agreement that works for all of us,” McCall said. “Thanks to many months of hard work and dedication from everyone involved, the new contract preserves our wages, benefits and other contractual protections without lowering the standard of living for current or future retirees.”
Contract highlights
John Brett, vice president of ArcelorMittal and CEO of ArcelorMittal USA provided highlights of the new contract on the ArcelorMittal website:
VEBA – The company has regularly made contributions of $25 million per quarter to the Voluntary Employee Beneficiary Association (VEBA) trust that provides benefits to retirees and mitigates the cost of health care increases. The new contract will allow ArcelorMittal to suspend payments until Q1 2018. It also changes the future contributions to 5 percent of EBIT per quarter.
Retiree Health Care – Retirees will have an option for a Medicare advantage plan that improves use of government subsidies. Medicare eligible retirees were moved from a self-insured plan to a Medicare advantage plan. Retirees will see modest premium increases, the first since 2008. For new hires, ArcelorMittal will contribute $0.50 per hour worked into a 401(k) for in lieu of retiree healthcare.
Active Health Care Costs – Three different health plans that were in place at the company have been consolidated into one ArcelorMittal plan, saving administrative costs. Workers will have in-network deductibles for the first time and increased out-of-pocket maximums. Depending on which plan an employee had previously, there may be changes related to use of use of generic prescription drugs, custody requirements for dependent care for new hires, and working spouse coverage.
Wages – It was agreed there will be no wage increase during the duration of the contract. A profit sharing plan using a hot roll price mechanism will allow employees to prosper when the company prospers.
Production and Location – Employees will be able to request transfers between locations should production cutbacks be implemented. Production in the USA will be “based on customer demand, meaningful technology differences, and meaningful logistics and geographic demand for products.”
Said Brett, “No, we did not get everything we asked for from the United Steelworkers, and they didn’t get everything they requested either. Some say that’s the sign of a successful negotiation. I say that we made many important strides toward a more sustainable future, but there is still work to be done in order to become the most cost effective and productive workforce possible, and to match the cost structure of our closest competitors.
“We’re pleased to have the new contract ratified, and we look forward to working closely with every ArcelorMittal employee to ensure a sustainable and successful future here in the United States.”
Sandy Williams
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