Steel companies slash retiree benefits

DETROIT – Thirty thousand retired steelworkers from bankrupt National Steel are seeing their worst nightmare become reality after a bankruptcy judge ruled earlier this month that they are no longer eligible for health care coverage.

For many of these industrial workers, mill work has played havoc with their health and chronic illnesses require regular care.

In May, the bankruptcy judge agreed to allow U.S. Steel to purchase the bankrupt company over a competitive bid by AK Steel. U.S. Steel offered less money, but assumed the debts of National Steel, and negotiated a labor agreement with the United Steelworkers of America (USWA). The National Steel buyout made U.S. Steel the world’s fifth largest steel producer.

According to a USWA statement, the labor agreement “reduced management staffing, provided workers a stronger voice in productivity improvements, secured industry-leading wages and incentives,” and committed the companies to strengthen their investments in steel production in the U.S.

Additionally, the companies agreed to secure defined benefit pensions for union members, protect the benefits of current U.S. Steel retirees, reduce outsourcing to non-union contractors, and provided a buyout for retirement-eligible workers still in the plants. U.S. Steel also promised to keep other areas of production open that are organized by the USWA. Some plants, such as the Great Lake Works near Detroit, were expected to return to near full capacity.

Steelworkers involved in ratifying this agreement expected that retirees, who have long fought for such protections, would receive company-paid health and prescription drug coverage.

The union supported consolidation as a way to save jobs and pensions lost due to a wave of steel company bankruptcies. Some 36 companies have filed for bankruptcy since 1998.

Most retired steelworkers cut off from health care benefits because of National’s bankruptcy do not qualify for Medicaid or drug discount card programs. Many aren’t old enough for Medicare. Temporary coverage under COBRA can cost retirees and their families hundreds of dollars a month and is only temporary. USWA Local 1299, near Detroit with 9,000 retirees, is doing everything it can to help retirees get into whatever program they qualify for, though clearly there are major gaps.

Indiana steelworker union activist Paul Kaczocha, an employee of bankrupt Bethlehem Steel where retirees also lost pension and health care benefits, told the World, “These maneuvers by bankrupt companies to cut off retirees’ medical care is another broken promise made to workers over the decades. They worked at lower wages for a promise of lifetime healthcare.” Kaczocha says something needs to be done nationally to correct this injustice. He called for a better protected national pension program for all workers, and “labor’s holy grail: a national health care plan that will cover all workers and their families.”

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