Steelworkers Union Approves Contract With Cleveland-Cliffs

U.S. Steel has offered union-represented workers raises that are less than what Cliffs’ workers will receive, but U.S. Steel has said its workers will be able to earn more than Cliffs’ employees from a profit-sharing program.

“We have continued to negotiate in good faith and believe we will reach an agreement that is best for all,” U.S. Steel said Wednesday.

Steel prices in the U.S. reached record levels last year as supply-chain disruptions and depleted steel inventories after the pandemic-related production outages drove strong demand. Cleveland-Cliffs and U.S. Steel are the largest domestic suppliers of sheet steel to the automotive and appliance industries.

U.S. Steel’s net income in 2021 was $4.2 billion, swinging from a loss of $1.2 billion in 2020 caused by the Covid-related production disruptions. Cleveland-Cliffs earned $3 billion last year after losing $122 million in 2020.

Union negotiators said they are wary of the good times lasting in the steel industry. The spot market price for the hot-rolled coiled steel is $760 a ton, down about 60% from a year ago, according to S&P Global Markets. U.S. Steel this fall idled two blast furnaces at Mon Valley Works near Pittsburgh and Gary Works in Indiana.

Cleveland-Cliffs and United Steelworkers agreed to a 20% increase in hourly wages over the life of the newly ratified contract, but the union and Pittsburgh-based U.S. Steel remain at odds over a similar wage increase that the union is seeking. The companies’ old contracts with the United Steelworkers union expired Sept. 1.

The union described the latest bargaining sessions with U.S. Steel as making “some progress,” but agreements on wages, healthcare coverage costs, retirement benefits and other issues haven’t been reached, the union said in a message to members Tuesday.

U.S. Steel said it is offering wage increases of about 14%, with two years of 3% raises and two years of 4% increases, though it expects workers to receive additional compensation from profit-sharing bonuses. U.S. Steel said it expects to pay steelworkers about $20 an hour in profit-sharing for the time they worked during the quarter ended Sept. 30.

“When we do well, you do well,” U.S. Steel Chief Executive

David Burritt

said in a message to union members distributed in late September.

Union negotiators said profit-sharing payments are unreliable. The United Steelworkers said the amounts have varied significantly over the years with long stretches of low or zero payments in 2009, 2010 and from 2014 through 2016 when U.S. Steel lost money in weak steel markets.

“We need guaranteed wages,” said Don Furko, president of a union local for workers at U.S. Steel’s Mon Valley Works. “We’ve got members buying houses and buying cars and they can’t have incomes based on profit-sharing.”

U.S. Steel has cut thousands of union workers from its payroll since the 2018 contract was ratified, by idling pipe-making plants in Texas and Ohio and ending steel production at a mill near Detroit in 2020. The company earlier this year said it also intends to stop making steel at its Granite City, Ill., mill, and sell the two blast furnaces there to

SunCoke Energy Inc.

U.S. Steel made up for the production lost at closed mills by acquiring Big River Steel mill in Arkansas, a new mill staffed by nonunion workers. U.S. Steel plans to double Big River’s steel production capacity to 6.3 million tons annually.

Cleveland-Cliffs and the union reached a tentative agreement on their contract in late August, covering about 12,000 workers at 13 mills. Besides pay raises, the union said the contract expands insurance benefits for active and retired workers, raises pension benefits and improves vacation provisions.

Write to Bob Tita at [email protected]

U.S. Steel has offered union-represented workers raises that are less than what Cliffs’ workers will receive, but U.S. Steel has said its workers will be able to earn more than Cliffs’ employees from a profit-sharing program.

“We have continued to negotiate in good faith and believe we will reach an agreement that is best for all,” U.S. Steel said Wednesday.

Steel prices in the U.S. reached record levels last year as supply-chain disruptions and depleted steel inventories after the pandemic-related production outages drove strong demand. Cleveland-Cliffs and U.S. Steel are the largest domestic suppliers of sheet steel to the automotive and appliance industries.

U.S. Steel’s net income in 2021 was $4.2 billion, swinging from a loss of $1.2 billion in 2020 caused by the Covid-related production disruptions. Cleveland-Cliffs earned $3 billion last year after losing $122 million in 2020.

Union negotiators said they are wary of the good times lasting in the steel industry. The spot market price for the hot-rolled coiled steel is $760 a ton, down about 60% from a year ago, according to S&P Global Markets. U.S. Steel this fall idled two blast furnaces at Mon Valley Works near Pittsburgh and Gary Works in Indiana.

Cleveland-Cliffs and United Steelworkers agreed to a 20% increase in hourly wages over the life of the newly ratified contract, but the union and Pittsburgh-based U.S. Steel remain at odds over a similar wage increase that the union is seeking. The companies’ old contracts with the United Steelworkers union expired Sept. 1.

The union described the latest bargaining sessions with U.S. Steel as making “some progress,” but agreements on wages, healthcare coverage costs, retirement benefits and other issues haven’t been reached, the union said in a message to members Tuesday.

U.S. Steel said it is offering wage increases of about 14%, with two years of 3% raises and two years of 4% increases, though it expects workers to receive additional compensation from profit-sharing bonuses. U.S. Steel said it expects to pay steelworkers about $20 an hour in profit-sharing for the time they worked during the quarter ended Sept. 30.

“When we do well, you do well,” U.S. Steel Chief Executive

David Burritt

said in a message to union members distributed in late September.

Union negotiators said profit-sharing payments are unreliable. The United Steelworkers said the amounts have varied significantly over the years with long stretches of low or zero payments in 2009, 2010 and from 2014 through 2016 when U.S. Steel lost money in weak steel markets.

“We need guaranteed wages,” said Don Furko, president of a union local for workers at U.S. Steel’s Mon Valley Works. “We’ve got members buying houses and buying cars and they can’t have incomes based on profit-sharing.”

U.S. Steel has cut thousands of union workers from its payroll since the 2018 contract was ratified, by idling pipe-making plants in Texas and Ohio and ending steel production at a mill near Detroit in 2020. The company earlier this year said it also intends to stop making steel at its Granite City, Ill., mill, and sell the two blast furnaces there to

SunCoke Energy Inc.

U.S. Steel made up for the production lost at closed mills by acquiring Big River Steel mill in Arkansas, a new mill staffed by nonunion workers. U.S. Steel plans to double Big River’s steel production capacity to 6.3 million tons annually.

Cleveland-Cliffs and the union reached a tentative agreement on their contract in late August, covering about 12,000 workers at 13 mills. Besides pay raises, the union said the contract expands insurance benefits for active and retired workers, raises pension benefits and improves vacation provisions.

Write to Bob Tita at [email protected]