Corporate News: Union Says Talks Stall With ArcelorMittal
PITTSBURGH -- The United Steelworkers union says it is close to a new four-year labor pact with U.S. Steel Corp. but that talks with ArcelorMittal have stalled, prompting both sides to prepare for a strike if a resolution or extension isn't reached.</br></br>The stakes are high for both companies and their collective 26,000 U.S. workers, as well as the domestic steel industry and its customers. The companies, trying to control costs and compete with each other in the tight-margin steel business, consider the last labor deals -- negotiated in 2008, just before the financial crisis erupted -- a heavy burden. Meanwhile, steelworkers are trying to cling to gains and jobs amid stagnant wages and stubbornly high unemployment, and are concerned with ArcelorMittal's insistence on a two-tiered wage scale, which would be a first among major unionized domestic steel producers.</br></br>Negotiations with ArcelorMittal are at a dead end, say union bargainers. "As the clock continues to tick, ArcelorMittal continues to signal that it wants a confrontation," USW leaders wrote to members on Wednesday, in an internal memo reviewed by The Wall Street Journal. USW, which has a $210 million strike fund, also outlined what would happen in case of a strike but noted that its leaders have not yet voted to authorize a strike. "That's a strategic decision and we're not going to paint ourselves into a corner," said spokesman Tony Montana, who declined to comment on the odds of a strike.</br></br>ArcelorMittal, which wants to cut wages and benefits for all workers by more than $28 an hour, or 36% from an average $77.40 an hour in 2011, has started preparing its blast furnaces and other facilities for a strike "as a precautionary measure and consistent with measures taken during past labor negotiations," according to spokesman Bill Steers. However, he said the company is "in continuous dialogue with the United Steelworkers and remains optimistic about reaching a fair and equitable contract with the USW without a work stoppage."</br></br>ArcelorMittal, which has the capacity in Europe and Canada to replace lost production in the U.S. in the event of a strike, is pushing hard for a two-tier wage scale -- with new workers being paid a lower wage and receiving no company pension. It also wants the right to suspend health-care benefits if the Affordable Care Act is put into effect and workers can buy health care on exchanges, the union says.