The USW’s 2003 concessions helped to make steelmakers incredibly profitable … They cannot dispute the union’s contributions.

Robert Brooks Editor

This is bound to be a highly consequential year in North American steelmaking, as must have been clear since 2003 — the last time the integrated steel producers settled a comprehensive labor agreement with the United Steelworkers of America.

That agreement five years ago was historically significant. At a time when most of the industry’s unionized companies faced bankruptcy and/or complete elimination, the agreement broke what seemed to have been decades of tension between management and labor. The USW conceded to management positions on employment levels, job classifications, and work rules, among numerous other details that were critical to bringing new capital into the industry.

That agreement, along with the federal government’s temporary trade protection and the Pension Benefit Guaranty Corp.’s rescue of workers’ pension programs, became the foundation of the industry consolidation, and expansion, that followed from 2004 until today.

So, the union has arguments in its favor as a new round of negotiations edges near. Already, the USW is showing confidence, having arrived at an understanding with ArcelorMittal Dofasco that may lead to the first establishment of a union workforce at that historically non-union plant.

This is a noteworthy development. For decades, Dofasco Inc. stood as a counterargument to the union’s claims: a large, privately held integrated works in labor-friendly Canada, with no need or inclination to unionize. Now, the USW has gained permission to conduct informal discussions and make its case with workers at the Ontario plant. “Dofasco employees will have the space to interact with the union, to talk openly with USW representatives without opposition from ArcelorMittal,” according Wayne Fraser, USW Ontario/Atlantic Director. “If there is support for moving forward, they will then be able to democratically elect a bargaining committee and negotiate with the company.”

This isn’t the union’s only recent coup. Having balked at, and thus blocked, a plan by Esmark Inc. and its associates to buy ArcelorMittal’s Sparrows Point, MD, mill, the USW is pleased (and taking credit) that Severstal is now ready to takeover the plant. “The Severstal deal demonstrates the USW and its members are the critical players in the continuing consolidation and revitalization of North America’s steel industry for those who want access to our hemispheric market,” stated USW president Leo Gerard.

Union membership in the steel industry now is pegged at around 35,000, down from 2003, so any additional numbers on its side will make their argument more persuasive as discussions take shape in the weeks ahead. But, and as shown by the United Autoworkers’ ongoing strike versus American Axle & Manufacturing, even a small demonstration can have a notable impact in today’s more consolidated manufacturing segment.

What the USW wants is simple to understand: higher wages and better benefits; more protection against employers contracting out work; perhaps some new assurances on job preservation; and, as indicated by the Dofasco development, some clearance for rebuilding their membership ranks. Recruitment is a fundamental objective for the entire labor unions nowadays.

Moreover, it may be hard for steelmakers to deflect these advances. The USW’s past concessions have helped to make most of these companies incredibly profitable in recent years, and the companies now are in the midst of a mostly successful campaign to raise steel prices. They cannot dispute the union’s contributions to these developments.

It is obvious that the USW will seek rewards for helping the industry restore its prosperity. What isn’t understood yet is what the steelmakers expect, or hope to gain from the upcoming negotiations. All of the companies involved have changed fundamentally since 2003, so there’s little historical reference on this. The two most important firms involved, ArcelorMittal USA and U.S. Steel, are multinational organizations now, which will alter their perspectives on wages, benefits, work rules, and other critical factors. Their best strategy will be to ensure that these negotiations are about the future, not the past.