Chesterton Tribune



New USW-ArcelorMittal contract calls for idlings but no pink slips

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ArcelorMittal’s Indiana Harbor footprint would shrink considerably under its proposed new three-year contract with the United Steelworkers.

According to a 25-page summary of the tentative agreement released last month by the USW in advance of the ratification vote, contract language specifically provides for the idling of the 84-inch hot strip mill at Indiana Harbor West; and the idling of the No. 2 steel shop, the No. 1 aluminizing line, and the No. 5 continuous galvanizing line at Indiana Harbor East.

No Steelworkers would be pink-slipped as a result of those idlings, however, which the union is referring to as the “footprint project.”

“Recognizing the need for continuing capital investment and the operational efficiencies of the ‘footprint project’ will produce, we determined that our priority needed to be focused on earnings security and job protection/opportunities of the employees that would be impacted by the implementation of the project,” the USW said. “We were able to first and foremost secure an agreement that no employees would be laid off as a result of the project and we were able to secure and maintain the wages and incentive earnings for any employee impacted by the consolidation of the facilities.”

Impacted employees, for instance, would have the opportunity to transfer--after internal plant bidding--to any other of ArcelorMittal’s Northwest Indiana facilities or to its Riverdale, Ill., plant “and still be able to maintain their wage protections.”

What the union is calling the “footprint project” the company is calling “Action 2020,” a “strategic roadmap” announced early this year “which aims to achieve targeted financial improvements for the company by 2020.” Among other things, the Action 2020 initiative includes “asset optimization” without layoffs, achievable, ArcelorMittal had said, “by leveraging natural attrition.”

As it happens, the idling of a hot strip mill (HSM) was trial-ballooned a year ago, just as contract negotiations were getting underway, by a company exec, Andy Harshaw, president and CEO of ArcelorMittal USA Flat Carbon, who in a blog posted in June 2015 noted that the company’s five HSMs were averaging a utilization rate of 70 percent with no concomitant reduction in overhead.

“It is not sustainable to operate multiple HSMs at low utilization rates when the same volume of steel could be produced by fewer HSMs at higher utilization rates,” Hawshaw wrote at the time. “Why run five HSMs at 70 percent when you can finish the same tonnage running four HSMs at 90-percent capacity?”

It should be noted that the new contract doesn’t only target facilities for idling. It would also do the following: increase steelmaking to an upgraded No. 3 steel shop at Indiana Harbor West, new castor included; increase steelmaking as well to the No. 4 steel shop at Indiana Harbor East; re-start and re-load the No. 2 continuous galvanizing line; and invest $200 million in an upgrade of the 80-inch hot strip mill.


Posted 6/8/2016




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