Steel Mills

USW vs. US Steel —A Historical Perspective

Written by Sandy Williams

As the deadline for contract expiration draws near (Sept 1), SMU thought a historical perspective on US Steel and USW negotiations might be in order.

In the history of US Steel there have been only two labor work stoppages. The first was a historic 116 day strike by 500,000 steelworkers in 1959. The second occurred in 1986.

The strike of 1959 was one of the most crippling strikes the United States has ever seen. At the time, US Steel was a thriving business rated seventh most valuable in the country. Workers demanded wage increases but the company refused to given in without significant changes to work rules. Steelworkers walked out in July halting production at, arguably, the most important steelmaker in the country.

As steel production faltered, so did manufacturing as steel shipments were cut off for product in the consumer market and defense. In October, fearing a prolonged strike would return the country to a recession, President Dwight Eisenhower invoked the Taft-Hartley Act to get the mills back in operation.

The Supreme Court upheld the action in November but a contact was not agreed upon until January 1960. Workers won only a small wage increase but negotiated for a cost-of-living provision. It also showed the fortitude and solidarity of union members.

The length of the 1959 strike opened the gates to imported steel as manufacturers turned to foreign sources to keep production going.

In 1986, negotiations between US Steel and the USW began on June 1. Unlike a pattern that had been developed at other mills in the 1980s, US Steel refused to open its financial records to the USW and demanded workers agree to significant wage reductions. By July, a strike vote was taken and supported by 99 percent of the union membership. Talks broke off two days before the July 31 expiration deadline. Workers offered to continue negotiations while working under terms of the previous contract but US Steel refused and on August 1 a work stoppage began at 25 US Steel plants. Management termed it a strike while the USW called it a lockout.

During the next month the USW fought for unemployment compensation for its workers and was successful in six of the seven states with US Steel facilities. It was a welcome victory for union because unemployment benefits are not provided to workers if they initiate a strike but they are eligible for benefits if management initiates the work stoppage (i.e., lockout). The benefits were crucial to supplement meager payments from the USW strike fund, especially if the work stoppage was prolonged.

Next the USW set out to stop production of steel by temporary workers and halt inventory shipments. Workers were mobilized for mass picketing.

USWA president Lynn Williams challenged any attempt to use replacement workers by saying USW members would “resist any such attempts in any way available to us.” For the first seven weeks of the dispute the threat worked, but by fall of 1986, US Steel intensified shipping of existing inventory which was met with fierce resistant by union members. Workers in Lorain, Ohio and Birmingham, Alabama took to blocking trucks and railroad tracks and the strategy soon moved across the country. US Steel sought injunctions to limit the number of picketers which allowed some improvement to shipping.

The USW received some unanticipated help by corporate raider Carl Icahn who announced October 6, 1986 his intention to take over US Steel in a either a “friendly” or “hostile” manner. Icahn upped the pressure on the contract dispute by informing the union that he was willing to give profit-sharing and stock ownership in return for wage concessions by workers.

US Steel, unsure if it could weather a hostile takeover, especially with competing steel mills ready to move in on market share during the prolonged dispute, asked to meet informally with the union president. Formal bargaining resumed on October 21 but became bogged down again a month later.

The main issue was deep wage concessions that the union was unwilling to agree to. US Steel also wanted to eliminate 1,500 jobs. The union insisted on stronger limitations on subcontracting—an issue which management strongly opposed.

Following the second impasse, US Steel intensified its steel shipments, which again was met with resistance by picketing workers and turned violent in Lorain. One hundred fifty police clashed with four hundred picketing steelworkers leading to the arrest of 14 union members and several injuries. As a result, Lorain shipments were prohibited until December 31 by a local judge in an effort to avert further confrontations.

A third round of negotiations began in December 19 with the help of a mediator. By this time the mills had been closed for five months, longer than the 1959 strike. US Steel and automotive industry order talks were soon to begin. Unemployment benefits were running out for union members. With no advantage for either party to prolong the work stoppage, a contract was finally hammered out and ratified on January 31, 1987.

In the end the company got some of the wage concessions it wanted and eliminated 1300 union jobs; the union received improved early retirement benefits and a few more restrictions on outsourced contractors.

Since that time, US Steel and USW negotiations have been much more civil and compromising. The current negotiations are causing some anxiety given the recent lockout at Allegheny Technologies.

Both sides are well aware of the condition of the U.S. and global steel industry and the need for change in order to stay competitive. The question is just how much change will be acceptable? With only six days left on the current contract we will soon have an answer.

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