Steel Mills

US Steel Contract Negotiations Begin

July 11, 2015

Contract negotiations have kicked off between the United Steelworkers and US Steel Corp. USW officials and US Steel representatives met in Pittsburgh to begin ironing out the details of a new three year contract to replace the current one due to expire Sept. 1.

The talks come at a time when the steel industry is facing tough competition from imports that have resulted in layoffs and low steel prices. US Steel posted a net loss of $75 million in the first quarter, due to shutdowns, lower prices, and lower sale volumes.

“It’s clear that the current state of the steel industry, especially the effects of unfair trade, will make for a difficult summer of bargaining,” said officials of USW Local 1938 in Virginia, Minn., in a letter to members posted online last week. “If we all work hard, remain patient and stick together, we are confident we can reach a fair settlement.”

Low ore, oil, and steel prices and the onslaught of imports at prices that undercut the domestic steel industry have caused a slew of layoffs across the industry and, especially, at US Steel. The company’s taconite plants in Minntac and Keetac laid off 800 workers this past spring due to the collapse in the price of iron ore. Last week taconite was selling at around $45 per ton, the lowest level since 2009.

OCTG producing facilities were cut back due to falling demand for oil tubular products resulting from low oil pricing. More than 9000 WARN notices were issued by US Steel in the last several months, although at the end of first quarter, US Steel had followed through on only around 2,800 of those potential layoffs.

USW District 7 Director Mike Millsap commented on the upcoming negotiations, “It is going to be a tough round. Business is slow because of these imports, so it’s expected to be difficult. But our position is the industry has its ups and down.”

It is expected that US Steel will ask for concessions from the workers to mitigate the loss of market share to unfairly traded imports. US Steel, itself is not commenting on the negotiations at this time.

Other issues that will concern the USW will be wages, benefits, safety, health care and pensions.

ArcelorMittal also began contract negotiations with the USW and three years ago took a more aggressive stance than US Steel. Cliffs Natural Resources is another major player that will be negotiating new contracts with USW workers this summer.

“Our goal this summer is to get a labor agreement, but not at any cost,” said USW Bargaining Committee Chairman Tom Conway. “We are coming together at a difficult time – there is no denying that. But there’s also no denying that we’ve been through situations like this before. We will get through this together. Solidarity and communication will be the keys.”