Vol. 79/No. 28      August 10, 2015

Steel bosses in the U.S. confront weakened demand and increasing competition from overseas capitalists, particularly from China, pushing prices down. In response, the two steel giants are laying off thousands of workers, demanding the government install protective tariffs and seeking steep concessions from the union.

The initial proposal from ArcelorMittal, the world’s largest steel producer, includes a three-year contract with no wage increase, a two-tier system of lower wages and benefits for new hires and major reductions in vacation pay and sickness and accident benefits, a July 20 Steelworkers negotiations update said. The steel giant proposes changes to health care plans for active and retired workers that reduce coverage and increase costs, instituting for the first time monthly premiums of $150 for an individual and $250 for a family. The company also demands the ability to propose more concessions.

“This is all about money,” Candy Colvin, a paramedic, and member of USW Local 1010 at ArcelorMittal in East Chicago, Indiana, for 11 years, told the Militant. “We have to watch out for the retirees. How can they live if they triple the cost of health insurance?”

ArcelorMittal also wants to end contributions to the Voluntary Employee Beneficiary Association, which covers health care and prescription drug costs of retirees who had benefits terminated by bankrupt steel companies.

VEBA was set up in 2002 by the USW and the International Steel Group, which was later bought out by ArcelorMittal. Its funds are based on company profits and steel tonnage.

“We do not have two tiers here now,” Reuben Ervin, a member of Steelworkers Local 979 at ArcelorMittal in Cleveland, told the Militant in a phone interview. “The new hires get the same wages and benefits as everyone else. But ArcelorMittal wants two-tier in this contract. This is a union-breaking system that will divide us.” Ervin, who is on the local’s grievance committee, has worked at the mill since 1978.

“It’s not like we are getting a free ride,” he said of the current health care coverage. “We work around a lot of dangerous chemicals — acid, lime and magnesium — that take a toll on your body. You see it in the air. My father worked in this plant for 42 years and died in the coke plant.

“I don’t know what is going to happen with this contract,” Ervin said, “but ever since negotiations began, we see more and more bosses doing hourly work which is against the contract. They are learning the jobs.”

Negotiations take place as steel and taconite iron ore prices have plummeted and fierce competition between the bosses for markets increases. With a worldwide glut in steel, steel prices have dropped 23 percent since Jan. 1. Global prices for taconite iron ore fell to the lowest level since 2009. Taconite, a low grade of iron ore, is the main ingredient used to make steel.

“The company thinks that because of the state of the industry right now they can take advantage of us,” Louis Alcorta, a USW Local 1010 member who has worked at ArcelorMittal for 40 years, told the Militant.

The East Chicago mill is the largest integrated steelmaking plant in North America with over 4,000 workers. “They say steelworkers make a lot of money, but you have to live out here to make it,” Alcorta said. “In the machine shop we are skilled craftsmen and make only $25 per hour. We don’t have two tier, and we are not going for this.”

Thousands of layoffs

At the U.S. Steel-owned Minntac and Keetac iron ore mines in Minnesota’s Iron Range, hundreds of workers have been laid off. ArcelorMittal shut down two plants in East Chicago and announced July 2 it was cutting 2,800 jobs at a steel mill in Mexico.

U.S. Steel in Fairfield, Alabama, competes with nonunion Nucor Corporation’s large mill in Decatur 90 miles north. Nucor produces the same amount of steel as Fairfield Works, 2.4 million tons, but with one-third as many workers. Plant manager Mike Lee boasted, “We hire can-do innovative guys who want to bust their butts every day.”

U.S. Steel CEO Mario Longhi told the Northwest Indiana Times, “We have many cost levers we can pull in response to a downturn in market conditions and we are pulling them as quickly and as hard as we can.” The USW has not received an initial proposal from U.S. Steel.

“Everything is on the table. We want to be more flexible than Nucor,” Longhi told the Wall Street Journal. Nucor has two electric arc furnaces that use scrap instead of iron ore and can be started and stopped easily in response to the fluctuating demand. U.S. Steel just installed a similar furnace at the Fairfield mill.
 
 
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