Tesoro Will Run Some Refineries If Workers Strike, Union Says

Tesoro Corp. (TSO) plans to keep some U.S. oil refineries running if union workers strike on failed contract negotiations, according to the United Steelworkers, which represents more than 1,300 Tesoro employees.

Tesoro will run some struck plants by employing “people who have little or no experience working on process units,” the union said in an e-mailed statement. Gary Beevers, the group’s international vice president, was informed of the plans by a company representative, said Lynne Hancock, a union spokeswoman.

“They said, if there was a strike, the company would hire people, and those people would take the jobs of strikers,” Hancock said in a telephone interview from Nashville, Tennessee.

Tina Barbee, a spokeswoman at Tesoro headquarters in San Antonio, didn’t immediately respond to e-mailed and telephoned requests for comment.

Workers at the 170,000-barrel-a-day Martinez refinery in California, the largest plant in Tesoro’s system, became the first yesterday to authorize a strike.

Union locals at all five Tesoro refineries in negotiations rejected the company’s final offers on a three-year contract last month. The plants have a total refining capacity of 508,000 barrels a day.

Tesoro’s contract proposal would allow the company to change or eliminate health care, pension and 401(k) plans and vacation policies unilaterally, according to the union.

“Our members are engaged in good-faith bargaining, but Tesoro seems unwilling to reach a reasonable agreement on this important issue and appears determined to provoke a fight with our members and our union,” Beevers said. “If so, this is a fight that Tesoro will regret.”

The other four refineries in negotiation are in Anacortes (TEANCRUD), Washington; Kapolei (TEKACRUD), Hawaii; Mandan (TEMACRUD), North Dakota; and Salt Lake City (TESLCRUD). Workers there may follow Martinez with strike authorizations if they don’t reach settlements with the company. Unions at all five plants have been working on 24-hour rolling extensions of a contract that expired Jan. 31.

The union’s contract at Tesoro’s 97,000-barrel-a-day Wilmington (SHWCCRUD) refinery in Southern California expires April 30.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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