Union Takes Hard Line in U.S. Steel Talks : Vows to Fight Firm’s Request for Wage, Benefit Cuts in New Contract
Disputing U.S. Steel’s claims of poverty, bargainers for the United Steelworkers vowed to fight the company’s demands for steep wage and benefit cuts as the two sides opened nationwide contract talks here Thursday.
In what is widely expected to be one of the most turbulent sets of contract talks in the recent history of the steel industry, union leaders warned company bargainers that they cannot count on the company’s 21,300 active union workers to shoulder all of the burden for U.S. Steel’s problems.
“The problems of the steel industry cannot be solved at the collective bargaining table,” Jim McGeehan, the union’s secretary-treasurer and its chief negotiator, told U.S. Steel officials.
During a meeting at Pittsburgh’s convention center, McGeehan also indicated that the union will reject the company’s demands for the kind of wage cuts that the union has granted weaker steelmaking companies in recent months. Well before the talks began, U.S. Steel Chairman David Roderick publicly called on the union to allow his company to match the lower labor costs of its major competitors, LTV Corp. and Bethlehem Steel.
“We have heard many statements from Mr. Roderick saying that the company needs a competitive agreement,” McGeehan told company bargainers Thursday. “But I’m sure you know that there are many meanings for ‘competitive agreement,’ and we also need a competitive agreement.
“You must remember that our members are not in the same position as the company,” he added. “Our members can’t take their jobs and run.”
Ever since the steel industry broke up its coordinated bargaining council last year, meaning that the major steelmakers would negotiate separately for the first time since the 1950s, industry observers have been predicting that the U.S. Steel talks would be the most troublesome.
Holding the Line at U.S. Steel
After a severe cost-cutting drive that has included dozens of plant closings and thousands of layoffs, U.S. Steel remains the largest and healthiest of the nation’s steelmakers. So now that the union is able to work out different agreements with each firm, it has decided to give the weaker companies large wage cuts while holding the line on concessions to U.S. Steel.
The union has already settled with U.S. Steel’s major rivals, making U.S. Steel seemingly more vulnerable to a strike. While its plants would be strikebound during a summer walkout, U.S. Steel’s major competitors--LTV, Bethlehem and National Steel--would be operating and ready to steal U.S. Steel’s customers.
But, while both sides insist that they can reach a settlement before the July 31 expiration date and avoid a strike, U.S. Steel has angered the union by mounting a major publicity drive among its workers to convince them that the company needs a lower wage level for its workers.
The company began its push for reduced wages last year after the union gave Wheeling-Pittsburgh Steel Corp. concessions that lowered its total labor costs--the sum of wages, benefits and administrative costs of employment--to $18 an hour from $21.40. Wheeling-Pittsburgh is still in bankruptcy court reorganization.
Across the industry, labor costs average $23 per hour, and U.S. Steel says its labor costs total $25.20 per hour.
In March, LTV Steel reached a USW contract that would lower its labor costs by $3.60 to around $22 per hour. National Steel’s settlement with the union cut $1.50 from its labor costs of nearly $24 per hour, and Bethlehem Steel settled for a $2.35-an-hour reduction to around $22.50. Inland Steel and Armco are still in negotiations with the union.
Just before U.S. Steel opened talks with the union, the company sent a 32-page pamphlet detailing its financial problems to its 45,000 active and laid-off workers. To drive home the point that it is ready to take drastic action to cut labor costs, the company included a list of every U.S. Steel mill that has been closed since 1980. UNITED STATES STEEL CORP
1986 1st Quarter ended March 31 1985 1984 1983 1982 1981 Net income (loss) (249) 313 414 (1,161) (361) 1,077 In millions of dollars
AVERAGE HOURLY LABOR COST Including fringe U.S. Bethlehem benefits Steel LTV Steel $25.20 $21.50 $22.49