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Latest News - March 2011

March 22, 2011
USW Agrees to Concessions at Sparrows Point, Wheeling & Warren Steel Mills
Source: Steel Market Update
By: Sophia Fain

The United Steelworkers Union (USW) negotiating team agreed to an agreement with the Renco Group which would allow potentially hundreds of jobs to be eliminated at Sparrows Point, Warren and Wheeling. In an article published in the Baltimore Brew reporter Mark Reutter spells out how the USW negotiating team allowed Renco Group the right to “…review all current job assignments, replace operating technicians, change seniority rules, alter pay grades, and require employees to assist each other across craft lines.”

According to the Brew article, the agreement departs dramatically from the “national pattern contract” the USW signed in September 2008 with ArcelorMittal and U.S. Steel. The national pattern contract actually tightened rules regarding use of outside contractors plus it did not alter job classifications.

Severstal NA did not sign the 2008 contract and in 2009, the USW rejected a proposal by Severstal which would have allowed the company to “combine or contract out about 500 union jobs at Sparrows Point.”

The Brew article points out this new agreement and the concessions made by the USW are expected to result in the loss of approximately 500 jobs during the life of the contract.

Ballot Not Yet Sent to Membership

In a second Baltimore Brew article published this morning (Tuesday), John Cirri, president of the Sparrows Point union, told members of the union Monday evening the buyer of the mill “never intended” to reduce incentive pay for the union workers. The agreement, which was negotiated by David McCall, top negotiator for the USW was termed as “a mistake” in The Brew article.

According to today’s Brew article, “Cirri vowed that all currently laid-off workers would have a job under Renco, but could not predict a timeframe when they would be recalled. The “L” blast furnace is expected to be producing hot metal in 45 days and the hot-strip mill operating shortly after that.”

An article in another local publication – Dundalk Patch – reported the first 250 of approximately 850 laid off workers at Sparrows Point are beginning their safety training workshops as they prepare to start the company’s blast furnace and hot strip mill.

In the Patch article, “Cirri said the main concerns of union members have been about capital investment guarantees—which are part of the tentative contract. The tentative contract requires that ‘appropriate capital expenditures’ are made by the new owners to ensure Sparrows Point’s assets are ‘world class and retain them as such.’”

SMU has heard a number of comments that the mill needs a new hot strip mill and the Patch article references the desire by the Sparrows Point union president desire to have a plate mill built at Sparrows Point.

The purchase agreement between the Renco Group (the mill name will be RG Steel) and Severstal does not require the approval of the union contract prior to closing the deal.

According to previous press releases it is expected the sale of the Severstal assets to the Renco Group will be completed by March 31st.



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