Steel workers approve pay cut
WEIRTON, W.Va. (AP) – Union workers at Weirton Steel Corp. have approved a new one-year contract that cuts their pay by 5 percent and freezes accrued pension benefits at current levels to stop a $400 million liability from becoming any larger. Members of Independent Steelworkers Union voted 1,842 to 620 to approve the contract, which also cancels a $1 per hour wage increase that had been planned for April 1. Currently, the average wage for a union worker is about $19 an hour.
Union officials announced the results of mail-in balloting Wednesday. Workers voting on the contract included hourly employees, salaried nonexempt employees and nurses.
ISU President Mark Glyptis said the vote “tells me our work force understands the dilemma we’re in. We’re in the midst of the worst steel crisis in American history.”
The pension benefit freeze also affects 530 management personnel at the company, which is the nation’s eighth largest integrated steel company and its second largest producer of tin-plated steel. The employee-owned company operates one complex in Weirton.
Weirton Steel has declined to disclose how much the average worker has accrued in pension benefits, saying that information is confidential. The benefits of current retirees would be unaffected by the freeze. The contract also defers some vacation pay that is ordinarily distributed in a lump sum Feb 20. Under the agreement, half of that $12 million will be paid this month and the rest on July 17. Members of Independent Guard Union, which represents mill security guards, also approved the changes on a 16-2 vote. Three guards did not vote, union officials said.
Combined, the changes are expected to save Weirton Steel an estimated $38 million. The new contract will expire March 31, 2004, the expiration date of the current labor agreement.
Like many other U.S. producers pummeled by foreign competition, Weirton Steel has been unable to post a profit for several years. On Friday, the company reported net losses of $24.3 million for the fourth quarter and $117.4 million for 2002. Company and union officials alike have publicly acknowledged that Weirton Steel would be unlikely to re-emerge if it filed for bankruptcy.
“The vast majority (of union workers) understood why we were asking for these changes. They expressed to us, ‘Keep the company alive. We want to be here a long time,”‘ Glyptis said.
He said another round of negotiations would begin Wednesday afternoon to tackle changes in the health care plans that cover employees and 3,500 retirees.
The second round of talks, which also will focus on additional ways to make the mill more efficient, is expected to last two days. Weirton Steel Corp. said it has mailed letters to retirees notifying them of the proposed health care changes. Informational meetings are planned Monday to explain the changes. ISU spokesman Dave Gossett said the current managed care plan with Mountain State Blue Cross has no deductibles, no charge for visits to specialists, $10 copays for most doctor visits and $50 charges for emergency room visits.
Retirees can join the plan that covers current employees or one in which they pay 20 percent of their costs.
Under the contract, retirees cannot be forced to accept health care changes. They will be asked to voluntarily sign waivers, Glyptis said.
“Health care is going to be much more difficult than what we just went through,” he said. “Undoubtedly though, retirees will first look at what the active employees have given up. The pension freeze was huge, even though we will try to renegotiate that back in next year.”
Glyptis said persuading active workers to accept health care changes also may be difficult. The average worker age is 48 and many have children enrolled in the current plan.
“To be a player, you have to keep up with what’s going around you. It’s foolish for Weirton Steel employees or retirees to think we don’t have to change,” he said.