CLEVELAND – The United Steelworkers of America and International Steel Group Inc. (the company that bought bankrupt LTV) reached a tentative agreement for a new labor contract after months of negotiations.
The agreement was announced Dec. 23. USWA Ohio District Director Dave McCall said the agreement was good for the workers. ISG Chief Executive Rodney Mott called it a “great Christmas present.”
McCall says the workers will receive higher wages than they did under the LTV contract, plus an incentive plan based on hourly wage rates, and cost of living bonus payments.
Health care will be as good or better than under the LTV contract, seniority earned with LTV, vacations, holidays, premium pay and other benefits from the LTV contract will be preserved.
The agreement also sets up a trust fund based on a profit-sharing arrangement with ISG that will be used to help pay some health care costs for tens of thousands of retirees cut off when LTV terminated their health care plan.
Mott and ISG Chairman Wilbur Ross say they can increase wages and benefits for steelworkers by cutting the workforce in the former LTV plants from 7,500 to 3,000, by eliminating 70 percent of salaried employes, and by increasing productivity. ISG is also saving $50 per ton on production costs for retiree benefits that older steel companies are paying.
Workers at ISG have established a productivity level of 1.5 man-hours to make a ton of steel, far below the industry standard of 2.5 man-hours. Industry analysts claim the ISG productivity level is unheard of in steelmaking worldwide.
McCall said he expects the ISG contract to become the standard in the steel industry. Members will vote on it after the union sends out the contract and holds information meetings.
ISG’s possible acquisition of the bankrupt Bethlehem Steel Co. may move forward upon the completion of this agreement, although the cost of Bethlehem’s retiree benefits are not likely to be picked up by ISG or any other company. Bethlehem’s CEO says he is looking at the ISG agreement.
Some pressure is being exerted on the federal government to take over pension and health care costs in the private sector of the economy. Government regulations, or lack thereof, have utterly failed to monitor these funds and force compliance for keeping the pension plans fully funded. Hundreds of thousands have already lost pension benefits. This dovetails with the national health care crisis.
The General Motors pension fund is reported to be $61 billion underfunded. Ford has recently admitted to being billions of dollars underfunded and pledged to “make some payments.” Add billions owed by other corporations, large and small, and a crises of monumentsl proportions is building. This is workers’ money to begin with, taken from wage increases during contract negotiations.
Instead of President Bush’s call for enforced savings plans, financed by additional deductions for worker paychecks, many are calling for federal legislation on strict regulation of pensions in the private sector, forcing corporations to pay what they are legally bound to pay under contracts signed with unions. Corporations have freely plundered the pension funds, using workers’ money for company operations, speculative investments and personal enrichment for owners and managers.
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