ArcelorMittal Backs Off on Pensions in Talks, Union Says
The United Steelworkers union said ArcelorMittal (MT), the world’s largest steelmaker, backed down on a proposed change to pensions in talks to replace a labor accord for thousands of U.S. workers that’s due to expire tomorrow.
ArcelorMittal previously had said it would stop giving pensions to workers hired after Sept. 1, the union said today in an e-mailed update to its members. Bill Steers, a spokesman, for Luxembourg-based ArcelorMittal, declined to comment on the company’s proposals for the new accord covering 12,554 workers at 12 plants, citing the confidentiality of the talks.
“Yesterday the company took some steps forward, including backing off of their demand for no pensions for new hires,” the union said. “But we remain far apart.”
ArcelorMittal and U.S. Steel Corp., the country’s largest steelmaker, are negotiating new contracts with the union amid sluggish U.S. demand for the metal. ArcelorMittal Chief Executive Officer Lakshmi Mittal is trying to cut U.S. wages, sell assets and relocate some production as demand drops in Europe, its biggest source of revenue. The company, which had net debt of $22 billion as of June 30, had its credit rating cut to junk by Standard & Poor’s on Aug. 2.
“The risk of a reduction in output appears to be increasing,” Thomas O’Hara, a London-based analyst with Citigroup Inc. who has a buy rating on ArcelorMittal, said in a note yesterday. O’Hara estimated the talks cover about 90 percent of the company’s U.S. capacity.
The existing ArcelorMittal contract will expire at 11:59 p.m. New York time tomorrow, according to the steelmaker. Union negotiators told members to continue working while the talks continue, according to the latest e-mailed union update today.
“It is in our best interest to not call a strike at this time,” the union said.
ArcelorMittal (MT) has begun to take “asset preservation steps” that include taking blast furnaces and coke ovens offline to ensure they are properly maintained in the event of a strike, Steers said in an e-mailed statement yesterday. The actions are consistent with those ArcelorMittal took during previous labor negotiations, he said.
“The company remains optimistic that a fair and equitable settlement will be reached without a work stoppage before the contract expires,’ Steers said today in an e-mail.
The union said it’s concerned that ArcelorMittal is preparing to ‘‘hot-idle” its U.S. coke plants, a procedure that temporarily halts output. Such a move may damage the plants, the union said.
“We will take all necessary actions to ensure that in the event of a work stoppage our coke operations will remain viable and able to resume production,” the union said.
ArcelorMittal proposed reducing wages and benefits by more than $28 an hour for union employees and eliminating retiree health care and pensions for new workers, the union said June 1.
The union is negotiating with U.S. Steel Corp. on a contract covering about 13,000 workers to replace an accord expiring at midnight tonight, said R.J. Hufnagel, a union spokesman.
Erin DiPietro, a spokeswoman for Pittsburgh-based U.S. Steel, declined to comment on the negotiations.
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