Replies

[MCRogers1974]

http://www.transformingarcelormittalusa.co...Book.lowres.pdf

This document provides some interesting information regarding the steel industry, competition, wages/ benefits, etc. This document is of interest to Michigan City as numerous residents work in the steel industry.

[Bryce]

This is an excerpt from today's WSJ online edition talking about ArcelorMittal and it's Union's.

PITTSBURGH—The United Steelworkers union says it is close to a new four-year labor pact with U.S. Steel Corp. X -2.47%but that talks with ArcelorMittal MT -2.23%have stalled, prompting both sides to prepare for a strike if a resolution or extension isn't reached.

Enlarge Image

CloseDavid A. DeNoma for The Wall Street Journal

Researchers in 2011 at a facility of U.S. Steel, which is close to a labor pact..The stakes are high for both companies and their collective 26,000 U.S. workers, as well as the domestic steel industry and its customers. The companies, trying to control costs and compete with each other in the tight-margin steel business, consider the last labor deals—negotiated in 2008, just before the financial crisis erupted—a heavy burden. Meanwhile, steelworkers are trying to cling to gains and jobs amid stagnant wages and stubbornly high unemployment, and are concerned with ArcelorMittal's insistence on a two-tiered wage scale, which would be a first among major unionized domestic steel producers.

Negotiations with ArcelorMittal are at a dead end, say union bargainers. "As the clock continues to tick, ArcelorMittal continues to signal that it wants a confrontation," USW leaders wrote to members on Wednesday, in an internal memo reviewed by The Wall Street Journal. USW, which has a $210 million strike fund, also outlined what would happen in case of a strike but noted that its leaders have not yet voted to authorize a strike. "That's a strategic decision and we're not going to paint ourselves into a corner," said spokesman Tony Montana, who declined to comment on the odds of a work stoppage.

ArcelorMittal, which wants to cut wages and benefits for all workers by more than $28 an hour, or 36% from an average $77.40 an hour in 2011, has started preparing its blast furnaces and other facilities for a strike "as a precautionary measure and consistent with measures taken during past labor negotiations," according to spokesman Bill Steers. However, he said the company is "in continuous dialogue with the United Steelworkers and remains optimistic about reaching a fair and equitable contract with the USW without a work stoppage."

ArcelorMittal, which has the capacity in Europe and Canada to replace lost production in the U.S. in the event of a strike, is pushing hard for a two-tier wage scale—with new workers being paid a lower wage and receiving no company pension. It also wants the right to suspend health-care benefits if the Affordable Care Act is put into effect and workers can buy health care on exchanges, the union says.

A two-tiered wage agreement would give the company lower labor costs than other integrated steelmakers and would follow a broader trend. One third of the collective agreements that expired in 2010 had two-tier arrangements, according to Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., but those were mostly in the automotive and aviation industries. He said such agreements were fairly common during the wave of concession bargaining the in the 1980s, then abated and reappeared over the past decade.

Mr. Chaison said workers have little strike leverage at a time of high unemployment and that such a move could be viewed negatively and become politically risky during a presidential election year, diminishing labor's clout.

"A steel strike would hurt the general image of labor unions, and that's not what they want during an election year," says Mr. Chaison,

Union officials say they are close to a deal with U.S. Steel, which is trying to cut health-care and pension costs for current workers and retirees in a new pact. In its 2011 annual report, the company said its "retiree medical and life insurance plans were underfunded by $2.7 billion and our pension plans were underfunded by $2.4 billion."

"We remain committed to working with the company to reach an agreement that is fair to both sides—one that allows the company to remain competitive while ensuring good jobs and good benefits now and into the future," the union said in a statement. U.S. Steel declined to comment.

Charles Bradford, an analyst with Bradford Research Inc., said steelmakers have to be concerned about strikes and losing market share to nonunionized "minimills" like Nucor Corp. NUE -1.41%that make steel entirely out of scrap instead of iron ore, coal and limestone.