Steel Mills

Steel Labor Negotiations Grow Tense as Contract Deadline Approaches

August 30, 2018

United Steelworkers have not reached a collective bargaining agreement with ArcelorMittal or U.S. Steel with just one day remaining before the current contracts expire. As union officials consider their options, including a possible strike, marches and rallies were planned for Thursday, Aug. 30, at ArcelorMittal and U.S. Steel locations to show union solidarity.

“Steelworkers have made sacrifices over the past several years that have allowed both companies to be very profitable,” said USW International President Leo W. Gerard. “All we are asking for are fair contracts that recognize those sacrifices and allow workers to have a share of that success.”

The USW is asking for wage increases after conceding to a three-year wage freeze during the last contract negotiations. U.S. Steel reported net losses of $1.7 billion during the period 2015-2017 and was forced to idle Granite City and shut down the Fairfield blast furnace. The energy sector slumped as drilling activity plunged and steel import levels rose. Close to 2,000 workers were laid off at various U.S. Steel facilities. Union workers accepted a wage freeze, although held firm on healthcare concessions in a contract agreement in December 2015.

Since then, consumer prices are up 8 percent and private sector wages have climbed 9.3 percent, said the USW. In 2018, wage growth was slower, but the Bureau of Labor Statistics reports the average wage increase is 2.7 percent year-to-date. A robust economy has boosted steel demand, and Section 232 tariffs sent steel prices soaring for record profits at the mills. The Granite City furnaces are back on line, and U.S. Steel is looking forward to an EAF at Fairfield.

The USW released a fact sheet on strikes, lockouts and working without a contract to union members who have not seen a labor dispute in recent years. Said the USW in its communique to U.S. Steelworkers, “Despite these improvements, U.S. Steel has demanded concessions throughout the Labor and Benefits Agreements. Under these circumstances, a strike or lockout is a very real possibility. Once again, we must be prepared.”

A release by USW officials for ArcelorMittal employees is similar: “We are going through a challenging period and, unfortunately, ArcelorMittal has responded to these challenges by demanding its employees accept a sweeping series of concessions. Under these circumstances, a strike or lockout is a very real possibility, so we must be prepared. Your bargaining committee will not do anything to jeopardize members’ jobs, and we will do everything we can to avoid a work stoppage. We know that the best way to prevent a labor dispute is to prepare for one.”

The U.S. segment of ArcelorMittal falls under ArcelorMittal NAFTA, which includes the U.S. mills as well as ones in Mexico and Canada. ArcelorMittal NAFTA sales increased 12.7 percent from first to second quarter to $5.4 billion. EBITDA increased 79.8 percent to $791 million as compared to $440 million in Q1. ArcelorMittal Group reported net income of $1.9 billion for the quarter.

ArcelorMittal USA acknowledged the right of USW employees to peacefully demonstrate, but stressed the need for safety at rallies and while performing job functions, adding that employees should “not allow negotiations to serve as a distraction” while working.

Said the company in a labor negotiations update: “As we near the contract deadline of Sept. 1, ArcelorMittal remains in continuous dialogue with the United Steelworkers and is committed to reaching a fair and sustainable contract without a work stoppage. If an agreement is not reached by the deadline, the parties have a number of options available to them under applicable labor law, including the continuation of the current agreement.”

NOTE: ArcelorMittal EBITDA was incorrectly reported. The article has been changed to reflect Group EBITDA increased 79.8 percent to $791 million as compared to $440 million in Q1.