The United Steelworkers-represented employees of U.S. Steel Corporation (USS) have ratified two new four-year collective bargaining agreements.

According to a statement released today by USS, one of the agreements covers the approximately 16,000 members employed at the company’s domestic flat-rolled and iron-ore mining facilities as well as at tubular operations in Lorain, Ohio, and Fairfield, Ala.. The second agreement covers around 900 members employed at the Texas Operations Division of U.S. Steel Tubular Products Inc., a welded tubular facility in Lone Star, Texas.

“U.S. Steel is pleased with the outcome of the ratification vote,” USS Chair and CEO John Surma said. “The newly approved four-year contracts are in the best interests of our company and our many stakeholders.”

In a separate statement, the USW noted that members ratified the contract by a mail-in secret-ballot vote of 10,571 to 2,670.

“This is an historic agreement that completes the restructuring of the steel industry following its near collapse five years ago with a global financial crisis plunged company after company into bankruptcy,” USW International President Leo Gerard said. “The hard work of our members was instrumental in rescuing the industry and putting it back onto the road of profit that it rides today.”

“We’ve won good wage and pension increases in this contract and our members are well deserving of it,” Gerard added. “Our union has always negotiated a pattern in basic steel and this contract sets the standard for agreements that come next.”

Details:

•At all of the company’s facilities except the Texas Operations Division, members will receive a $6,000 cash-payment signing bonus before Oct. 1 and $1 per hour increase retroactive to Sept. 1, with annual 4-percent raises in the second, third, and fourth years of the contract.

•Beginning in 2009, if profit-sharing payments for any quarter exceed $10 per hour due to the company’s European operations, the surplus money will be banked; and if profit-sharing exceeds $20,000 per year per member, the surplus will be contributed to the trust account designed to offset future health-care costs.

•For current members covered under the U.S. Steel Carnegie Pension Fund, the minimum pension formula multipliers will be increased as follows: up to 30 years, accrued prior to Jan. 1, 2009, $65; over 30 years, accrued prior to Jan. 1, 2009, $85; all years of service, going forward from Jan. 1, 2009, $100.

•For members covered under the Steelworkers Pension Trust, the contribution rate will be increased from $1.80 to $2.65 per hour, resulting in a $100 monthly pension multiplier.

•The agreement improves the existing medical, prescription drug, dental, vision, life insurance, and Sick and Accident benefits for all eligible employees. Prescription drug co-pays are unchanged.

•Retiree health-care funding: USS will establish a separated restricted account with the VEBA to be funded with a minimum of $350 million over the life of the contract. This money will be set aside for use in future rounds of bargaining and can only be used at the discretion of the USW.

•The new retiree benefits plan, the USW said, “is designed to mirror the health-care plan for active employees.” Retiree premiums are reduced to $150 for pre-Medicaire retirees and $75 for Medicare-eligible retirees. These amounts are fixed for the life of the contract. Similarly, premiums for surviving spouses are reduced to $125 for pre-Medicaire surviving spouses and $50 for Medicaire-eligible surviving spouses. These amounts are likewise fixed for the life of the contract.

•Annual surviving spouse payments will continue and have been increased.

•Retirements prior to 1974 will receive $1,100 annual payments and retirements in and after 1974 will receive $800 annual payments.

•The contract “requires the company to make significant capital investment in its domestic plants to keep our mills state of the art in order to compete in a global steel market,” the USW said.

•The contract also “provides for an Energy Efficiency and Carbon Emissions Task Force where the union and the company will work together to protect and benefit the industry and the environment,” the USW said.

“It’s the best basic steel agreement that we’ve had in the last 30 years,” said USW Vice President Tom Conway. “The industry’s restructuring is over. We’ve protected our plants and now, in the future, with the company’s commitment for capital investment.”

“We’ve looked after our retirees and those who will retire in the future,” Conway added. “We’ve been very responsive to our membership and very responsible in the best business sense. Our membership is looking forward to the next few years with enthusiasm.”

Financial impacts of the new agreements will be reflected beginning in the third quarter 2008 financial statements, USS said, including a pre-tax charge of approximately $100 million for the signing bonus payments.

Posted 9/10/2008