Steel Mills

ArcelorMittal Workers Prepare for Strike; Management Releases Proposal

September 27, 2018

United Steelworkers at ArcelorMittal are preparing for a strike after failing to reach agreement with management over proposed concessions.

“Although management certainly received the loud and clear message that we are united in solidarity and ready to fight for the fair contracts we have earned and deserve, the company continues to propose unfair and unnecessary changes to our agreements in healthcare and other areas,” said the USW in an update to members. “Many of ArcelorMittal’s deeply concessionary demands ultimately would not significantly improve the company’s long- or short-term profitability, but they would nevertheless have dramatic negative consequences for active and retired USW members and their families.”

Discussions have begun regarding the orderly idling of the plants and equipment in the event of a potential strike. Picket duty surveys have been distributed at union locals.

“In the coming days, we will begin preparations in the event of a labor dispute and may begin some informational picketing. Although we remain hopeful that management will change direction before forcing us into a labor dispute, we should ready ourselves, our families and communities.

Management Outlines Labor Proposal

John Brett, president and CEO of ArcelorMittal USA, released the following statement late Thursday regarding USW labor negotiations:

“ArcelorMittal is committed to continuing to negotiate in good faith with the USW to reach a mutually beneficial agreement for both parties. Our proposal increases both wages and pensions while addressing our competitive disadvantage in healthcare costs relative to other steel and competing material producers,” he said.

Below are some of the highlights of the company’s latest three-year proposal:

• General wage increase of 9.8 percent by year three.

• Signing bonus of $3,000.

• For pensions, the Defined Benefit multiplier would be increased from $105 to $120 by year three. The Steelworker Pension Trust would increase from $2.80 to $3.35 per hour by year three. Employees hired post June 2016 would see an increase in the 401K contribution from $.50 to $.60 per hour in the retiree healthcare account.

• Employees would be offered a second week of vacation after only two years of service. No changes are proposed to the profit sharing formula, plant incentive plans or vacation rate of pay.

• For healthcare, employees could choose between a Consumer Driven Healthcare Plan (CDHP) with no premiums or a PPO plan with modest design changes and modest premiums. For retiree healthcare, those who are pre-Medicare could choose between a CDHP with reduced premiums or a PPO plan with modest design changes and modest premium increases. Those Medicare eligible would see modest design changes and modest premium increases.

“Our focus has been and continues to be ensuring both the short-term and long-term prosperity of our operations, our people and our communities during both the good and bad times,” Brett said.

Preparing or Posturing?

Talks between the USW and the big integrated producers have proven contentious as the two sides grapple over the strong earnings reported by the mills this year. CRU Principal Steel Analyst Josh Spoores does not expect a strike, and if one occurs, it will most likely be short-lived, he predicts.

“If there is a strike and that work stoppage lasts longer than just two weeks, then we will see a steel shortage in the U.S. Affected steel buyers will have to shift orders to other mills. But there’s really no spare capacity in today’s market.”

He added: “For the mills, they don’t want to agree to an expensive deal that lasts longer than the Section 232 tariffs. For labor, if they can’t get a better deal in today’s environment, then they never will.”