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USW Preparing for Cliffs Natural Resources Negotiations

Written by Sandy Williams

USW members at Cliffs Natural Resources are watching labor negotiations at ArcelorMittal and US Steel very carefully. The USW contracts with Cliffs will expire on October 1, 2015 and cover 2,600 employees at four local unions in Minnesota and Michigan.

In a statement to the membership, union officials cautioned workers that negotiations at the two steel companies may preview what to expect in the Cliff’s negotiations—in particular, health benefits and retirement issues.

“At the bargaining table both US Steel and ArcelorMittal are attempting to use the temporary downturn in the domestic steel industry as an excuse to strip away decades of progress at the bargaining table. Both steelmakers are demanding dramatic increases in the amount that workers pay for health insurance, concessions in contract language around overtime, safety, and job security, and cutbacks in retirement security.”

The union acknowledged that the recent downtown in the iron and steel industry has made business challenging.

“Our union is not naïve. We understand the very real challenges that our industry is facing right now and we are fully prepared to work with all of our employers to ensure the security and viability of our industry and our workplaces. But we also understand that we are working in a cyclical industry and we’ve faced good times and we’ve faced challenging times. Right now, both US Steel and ArcelorMittal are attempting to make deep and permanent cuts to address a temporary downturn in our market. We also know that the challenges that our employers are facing weren’t created because of the cost of our benefits or our contract language, and these challenges can’t be fixed by gutting our contracts.”

Cliff’s Natural Resources, under CEO Lourenco Goncalves, has been trying to bring the company back to profitability during a prolonged period of low pricing for raw materials and steel. Divesture of non-core assets and cost cutting resulted in a net profit $60 million in second quarter 2015.

Production at United Taconite will be idled in August and resume when market conditions improve. The layoffs will affect 375 hourly workers and 45 salaried managers. No other layoffs are planned at this time. During the second quarter earnings call, Goncalves praised employees for their great work “day in and day out” in the “worst market conditions ever.”

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