Big Steel Firms Plan to Go Separate Ways in Bargaining With Labor
Under mounting pressure from both imports and domestic firms with lower labor costs, the nation’s biggest steelmakers agreed to dissolve their collective bargaining council and instead negotiate independently with the United Steelworkers, the companies said Friday. The move ends nearly three decades of unified labor negotiations in the industry.
But analysts said the widely anticipated decision, reached late Thursday, does little more than put an official stamp of approval on the efforts of many steel companies to cut separate deals with the union in order to compete more effectively with low-cost foreign steel.
They noted that the bargaining council, originally formed in 1956--to the advantage of both the major producers and the union--to eliminate domestic competition over labor rates, has outlived its usefulness now that the real competitive threat is coming from overseas.
Membership Declined
In fact, membership in the council, traditionally dominated by giant U.S. Steel, has steadily declined over the last few years as troubled firms have dropped out in order to try to win separate concessions from the union. The group now has just five members--U.S. Steel, LTV Steel, Bethlehem Steel, Armco, and Inland Steel--down from 10 members as recently as 1977.
The most recent dropout was National Steel, now half-owned by the Japanese steelmaker Nippon Kokan, which left the group last summer.
“This move has been telegraphed for months; the bargaining group has crumbled and is now down to just a nub of its former self,” said David Healy, steel industry analyst with Drexel Burnham Lambert. “With so many of the steel companies facing financial troubles, they have been cutting independent deals with the union right and left, and now there are almost as many deals as there are companies.
“It had gotten to the point where the people left in the group were the only ones paying list price for their labor, while everyone else was getting it at a discount, and they were feeling dumber and dumber,” Healy added.
“This means that recognition is finally being given to the fact that the union has already bargained separately with some companies; it’s a recognition of a fait accompli, “ added Ben Fischer, director of labor studies at Carnegie Mellon University in Pittsburgh, and a former top official of the steelworkers union. “The union had already set (separate) deals all over the place, so this group was left in an untenable situation.”
Became a Necessity
J. Bruce Johnston, U.S. Steel’s chief bargainer and chairman of the bargaining group, the Steel Companies Coordinating Committee, said in Pittsburgh that the unanimous decision “reflects and supports the unprecedented change in the American steel marketplace.”
He added that separate bargaining has become a necessity for the major producers because of imports, the rise of joint ventures between U.S. and foreign steel companies, the industry’s huge losses, as well as the union’s willingness in recent years to negotiate separate deals with troubled firms.
Lynn Williams, president of the United Steelworkers, said Friday that the union won’t immediately decide what bargaining strategy to follow in its next round of industry talks with the steelmakers in the summer of 1986.
But union officials said they might consider picking individual companies as strike targets in an effort to hammer out agreements at those firms, which can later be used as patterns in negotiations with the rest of the industry. That type of bargaining strategy has been used successfully over the years by the United Auto Workers in its negotiations with the auto industry.
But such a strategy could also foster increased labor relations volatility and make a strike more likely in an industry that hasn’t suffered a nationwide work stoppage since 1959.
But with U.S. steel employment plummeting and imports soaring, the union also will be under intense pressure to give the biggest producers the kinds of concessions that it has already granted to some of the weakest companies in the industry.
Union officials said the breakup of the bargaining council will make it easier for the union to bargain “more creatively” in an effort to improve productivity and make the domestic industry more competitive. “It does make the rules clearer now,” said a union spokesman. “And this gives us more flexibility in bargaining. We don’t see this as a particularly negative thing.” But now that negotiations are being decentralized, he added, the union also will be forced to strengthen its internal organization so that its leadership can continue to coordinate and maintain control over all of its bargaining efforts.
