22,000 in Steel Union Stop Work at USX Corp. : Action Described as Lockout, but Firm, Seeking Steep Wage and Benefit Cuts, Calls It a Strike

More than 22,000 union workers at the nation’s largest steelmaker stopped work at midnight Thursday after USX Corp. rejected an offer from the United Steelworkers to continue contract bargaining.

“Operations at all struck facilities have ceased,” company spokesman William Hoffman said in Pittsburgh Thursday night. The company has been “compelled to complete an orderly shutdown of facilities,” he added. Hoffman said that no new contract talks are scheduled.

The union called the action a lockout and the company said the workers were on strike.

“The lockout is on. We’re in for the long haul,” union spokesman Gary Hubbard said late Thursday night. “It’s going to be a long fight. Nobody wanted this strike.”

Still Far Apart

Spokesmen for both USX--formerly U.S. Steel Corp.--and the union agreed that they were still far apart on the company’s demands for steep wage and benefit cuts, and some industry observers predicted that the first major labor action in the American steel industry since 1959 could be a long one.

The dispute coincides with the worst crisis in the modern history of the steel industry.

With prices depressed because of a glut of steel-making capacity, losses and layoffs are mounting, and some major steel producers are nearing the breaking point. LTV Corp., the nation’s second-largest steel producer, entered bankruptcy proceedings in mid-July, joining seventh-ranked Wheeling-Pittsburgh Steel in bankruptcy court.

Meanwhile, Bethlehem Steel, the country’s third-largest steelmaker, set off alarms on Wall Street this week when it reported yet another big quarterly loss and omitted its dividends on preferred stock. Many analysts are worried that Bethlehem could soon join LTV and Wheeling-Pittsburgh in Chapter 11 bankruptcy proceedings.

But USX is apparently willing to endure a strike.

Union’s Offer to Work

Union officers said the company action amounted to a lockout because the union had offered to continue working under the contract, which expired Thursday. If state employment officials in any of the nine states with USX plants agree with that interpretation, the steel workers would be entitled to unemployment benefits.

The company decided not to continue bargaining after USX Chairman David M. Roderick said on Wednesday that the firm was prepared to weather a strike in order to win contract concessions from its workers.

In fact, the giant steelmaker has been getting ready for the walkout over the last week by idling many of its mills, and many of its customers have already canceled orders for steel scheduled for delivery in August and September. About half of the company’s active work force had been laid off before Thursday as USX wound down its operations.

Ever since their contract talks began in June, USX has been demanding that the union agree to lower the steelmaker’s average labor costs by $2 to $3 an hour to make the company competitive with other major domestic steel producers.

Union Gave Concessions

Earlier this year, the union granted such concessions to several weaker firms, including LTV Corp. USX argued that it could not afford to be the only major steel company in America still paying full labor rates of more than $25 an hour.

But union officers have stressed that USX, by far the largest and healthiest domestic steel producer, does not deserve the same breaks given to weaker companies. Steelworkers President Lynn Williams has repeatedly warned that the union would never grant USX the same labor rates permitted at a bankrupt firm.

Still, the union was willing to agree to freeze wages at current levels and said it was also willing to negotiate changes in certain fringe benefits in return for greater job security and reductions in USX’s practice of using subcontractors to handle union work. But, in its last proposal just before the strike began, the union pulled back from an earlier offer to suspend cost-of-living pay adjustments.