Sappi, steelworkers release contract details

The United Steelworkers at the Sappi Fine Paper mill in Cloquet, Minn., got an early Christmas gift this month in the form of a 30-month labor contract that does not deny certain retiree benefits to newer workers.

The roughly 400 steelworkers at the plant had been working under a contract extension since their original contract expired in May. The union represents a majority of the 715 workers at the plant.

Sappi managers had proposed a contract for USW workers that would have denied certain retiree benefits to members who had less than 15 years of service. Sappi officials issued public statements urging workers to accept the changes, given that the industry was facing so many financial problems.

That deal would have meant the end of company-sponsored life insurance benefits for newer workers. And it would have killed the company's monthly $50 contribution to Medicare Part B premiums upon retirement.

"We wanted those things off the table," said Brady Nelson, president of USW Local 11-63. He said members balked at the idea of such a big change because the Sappi mill is profitable.

Negotiations stalled until the USW International offices in Minneapolis and Pittsburgh got involved in the bargaining. Local union members struck down prior contract proposals, held a one-day picket session and eventually authorized a strike vote on Nov. 30.

The strike vote was supposed to take place Dec. 7, but Nelson said the USW International office and management were able to sit down and hash out a new tentative agreement that avoided the strike and insured that the 400 workers would keep their jobs.

Going forward, Nelson said the workers will not be split into a two-tier benefit system based on seniority. Instead, they will keep their life insurance and Medicare premium assistance once they retire.

In exchange for retaining benefits, the union made some concessions. In 2015, health care deductibles will rise $50 a year for single workers and $100 for those with families. That will bring the deductibles to $300 and $600 a year, respectively.

"We were not interested in seeing the increases, but in negotiating you never get everything you want," Nelson said.

Union workers also agreed to a slight reduction in wage increases. A 2 percent raise goes into effect this month and is retroactive to the old contract's May 14 expiration date. Another 2 percent raise will take effect in May 2013, followed by a 1.5 percent increase in May 2014. Union workers originally wanted 2 percent in 2014.

The contract resolution was welcome news during a time of distress in the industry. USW officials are busy helping members who lost jobs when the Verso paper mill in Sartell decided not to rebuild after a fire. USW members are also being affected by Georgia Pacific's shutting of its wood-for-automobiles plant in Duluth. It closed in October.