Steelworkers’ Accord With USX Calls for Cuts in Jobs, Benefits

Local union officials on Sunday overwhelmingly approved the tentative contract between the United Steelworkers and USX Corp., bringing the company and union one step closer to ending the longest labor dispute in the history of the American steel industry. If the steelworkers’ 22,000 rank-and-file members at USX vote in favor of the pact in mail balloting to be completed by Jan. 31, at least some USX workers could be back on the job as early as Feb. 1, said James McGeehan, chief negotiator for the steelworkers in the USX talks.

Union workers at USX walked off their jobs last Aug. 1, when the company and union failed to work out a new agreement before the existing pact expired. The union has termed the dispute, the first major walkout in the steel industry since 1959, a lockout by management.

At a press conference following Sunday’s 38-4 vote by the presidents of locals representing USX workers, McGeehan stressed that the four-year accord will provide improved job security for USX workers.

“We feel very satisfied that the shutdown has produced the results that it has in this agreement,” McGeehan said. But the accord, completed early Saturday morning after weeks of intensive negotiations, may be a bitter pill to swallow for some union members, even though they have been out of work for nearly six months.

It calls for the union to grant USX, formerly U.S. Steel, wage and benefit reductions of about $2 per hour, including a $1.12-per-hour cut in base wages and related incentive pay.

The union has also agreed to the elimination of 1,346 jobs, an end to cost of living payments, cuts in holiday and vacation time, higher deductible payments for medical insurance and reductions in shift premiums for Sunday and night work.

Union officials said that the wage and benefit cuts will save USX about $300 million over the life of the four-year pact. In the first year of the agreement, scheduled to go into effect Feb. 1, USX’s average labor costs will be reduced by about $2.45 per hour for each employee.

With the cuts, USX’s labor costs will be only slightly higher than those paid by ailing Bethlehem Steel Corp., which won contract concessions from the union last year.

The provisions calling for more job reductions at a company where thousands of workers are already on layoff angered some local presidents. Larry Regan, president of Steelworkers Local 1014 in Gary, Ind., the largest local at USX, blasted the agreement after the vote and said he won’t recommend its approval by his members.

“There’s no way I will go back to my members and recommend that all these jobs be eliminated,” Regan said. “That’s not the way that union solidarity is supposed to work.”

But the union did win some important points in return for the concessions. USX, the nation’s largest steelmaker, agreed to a complex package under which improved early retirement benefits will be offered for two older workers for every job eliminated. That provision is designed to allow younger, laid-off workers to be rehired.

The company also agreed to tougher limits on its practice of hiring low-cost subcontractors to perform union work. The union won similar restrictions in negotiations with other major steel companies last year.

McGeehan said the new agreement on the contracting out of union work could force the company to recall between 2,000 and 4,000 workers already laid off because of the company’s use of subcontractors under the previous contract.

Laid-off workers at several idle USX mills will also be eligible for early retirement under the agreement.

Union leaders noted that in total, between 9,700 and 11,700 workers will be removed from the layoff rolls, and will either return to work or receive early retirement benefits. About 23,000 USX workers are currently laid off. USX also agreed to invest $500 million in its aging mills in the depressed Monongahela Valley southeast of Pittsburgh, and to build a modern continuous casting mill at its complex in Fairfield, Ala.

“Six months ago, we were talking about the death of the Mon Valley,” said Lefty Palm, director of the union’s District 15, which covers the valley mills. “Now, this means there is going to be a future for steelmaking in this part of the country.”

Those investment projects could give the contract widespread support at big locals in Alabama and the Monongahela Valley, and help assure the pact’s ratification by the rank-and-file.