Tensions are high in steel country.
On Tuesday, labor contracts expire for 30,000 American steelworkers — including 2,300 on Minnesota’s Iron Range, an area recently stung by 1,400 layoffs and some of the worst industry conditions in decades.
Bargaining in Pittsburgh has turned contentious in recent weeks, creating the possibility of more protests and lockouts or even strikes.
This month, Allegheny Technologies locked out 2,200 union members from a stainless steel plant in Pennsylvania and brought in outside workers.
Steelworker rallies have erupted around the nation, including in Minnesota, where state officials and Iron Rangers wait anxiously for a resolution. U.S. Sens. Amy Klobuchar and Al Franken have swooped in to offer support. Nationally, steelworkers have called for “massive” rallies on Tuesday outside the U.S. headquarters of ArcelorMittal in Chicago and U.S. Steel in Pittsburgh. Steelworkers here will form a “practice picket line” on Tuesday at ArcelorMittal Minorca in Virginia, Minn.
“People are a bit anxious now because it’s coming down to the wire,” said Harold Anderson, an ArcelorMittal electrician who has worked in the 310-employee Minorca taconite plant in Virginia, Minn., for nearly eight years. “People are more concerned this time around than ever.
From the perspective of the United Steelworkers, U.S. Steel and ArcelorMittal are asking for too many concessions.
Brian Zarn, president of Steelworkers Local 6860 in Eveleth, and other union officials told workers at an Aug. 20 rally in Virginia, Minn., that U.S. Steel and ArcelorMittal are using the temporary downturn in the U.S. steel market “as an excuse to permanently gut workers’ contract language and benefits.”
Both U.S. Steel and ArcelorMittal, the world’s largest steelmaker, declined to comment for this article. Both have labor contracts with the United Steelworkers that expire Tuesday.
Also mum were officials at Ohio-based Cliffs Natural Resources, which has 1,250 employees at operations in Eveleth, Forbes and Hibbing. Cliffs’ steelworker contracts expire Oct. 1. Bargaining begins Sept. 8.
In recent weeks, officials at all three companies have complained via statements about the troubled industry, historically low iron and steel prices, the big surge in cheap steel imports from China and losing millions of dollars during this latest downturn.
These are “the extremely challenging conditions we continue to face in North America,” U.S. Steel CEO Mario Longhi said.
ArcelorMittal said it’s facing “critical business challenges” and cost disadvantages with competitors. Yet “the union believes we are only using the challenges facing our U.S.A. business to our advantage during a negotiations year and that their membership should hold out for better times ahead. But since 2008, our fixed costs — more than $2 billion a year — have remained flat while steel pricing has declined 50 percent.”
The union acknowledges the slowdown but says the companies should not try to solve their problems with “unrealistic” and “dramatic” jumps in worker health care costs and cuts to vacation pay, overtime and unemployment benefits that are “regressive and prohibitively expensive.” ArcelorMittal is pushing a two-tier wage system that would pay new hires much less.
“The market is not good and we are willing to work with the company, but we will not take huge concessions that take us back to 1960,” said Anderson, the ArcelorMittal electrician.
Hibbing Chamber of Commerce President Lory Fedo and Laurentian Chamber of Commerce President Bernie Collins said the 670 businesses they represent on the Iron Range are neutral about labor talks but worry about more purse tightening in the area.
In May, U.S. Steel laid off 812 of its nearly 2,000 workers at its Keetac and Minntac mines and taconite pellet plants in Keewatin and Mountain Iron.
Earlier this month, Cliff’s United Taconite laid off 420 workers after idling its plant and mine in Eveleth and Forbes. Magnetation let go 20 workers in Keewatin and then filed for bankruptcy in the spring. Last month, Mesabi Nugget let go 200 workers in Chisholm and Hoyt Lakes.
Only ArcelorMittal, which owns the Minorca Mine and taconite plant just outside Virginia, has not laid off workers in Minnesota.
Any strike, lockout or wage cuts could “affect everything from buying school supplies to someone deciding whether or not to get their lawn mower blade sharpened at their local L&M Fleet Supply,” said Collins, whose members own businesses in Eveleth, Mountain Iron, Virginia and Gilbert.
“The chamber’s concern is for all of the businesses and the people on the Range,” Collins said, noting that his chamber joined Klobuchar, U.S. Rep. Rick Nolan, Minnesota Lt. Gov. Tina Smith and 2,000 others during the Aug. 10 steelworker rally in Virginia.
“Everybody up here, just like the rest of Minnesota, is nervous given the current condition of the economy, the stock market and the stuff that is happening in mining right now, especially the iron ore mining,” Fedo said. “This is pretty much a crisis in the iron ore industry right now.”
Cliffs Natural Resources, which in Minnesota runs Hibbing Taconite, United Taconite and North Shore Mining, lost $700 million during the first six months of this year as revenue plunged 30 percent. ArcelorMittal lost $538 million during its first six months.
U.S. Steel lost $336 million. It idled firms across the country and is now exiting several “noncore” businesses.
Wednesday, USW International Vice President Tom Conway told members that steel companies are taking advantage of the “industry crisis” to gain “unrealistic” concessions from workers. But he said the union is committing to reaching “a realistic, fair contract settlement by Sept. 1.”