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The Dripby Mark Reutter6:00 amMar 21, 20110

USW agrees to Sparrows Point plan that would eliminate hundreds of jobs

The Brew has obtained a copy of an agreement allowing Renco Group to combine and eventually eliminate hundreds of jobs at Sparrows Point and two other steel mills.

The memorandum, signed by David McCall, chief negotiator of the United Steelworkers Union (USW), gives Renco the right to review all current job assignments, replace operating technicians, change seniority rules, alter pay grades, and require employees to assist each other across craft lines.

Together with language that loosens rules against outside contractors, the agreement will decrease the 6,000 union positions at the Sparrows Point, Warren (Ohio), and Wheeling-Pitt steel mills, according to informed sources.

“Nobody knows how many jobs will be in danger, but many, many hundred would not be a bad guess,” said a person with knowledge of the union’s thinking. This person said that the USW feared that Renco would not buy the mills without major job concessions from the union.

So far, the USW has not released the job restructuring memorandum or the labor contract that McCall signed with Renco, which is in the final stages of buying the mills from Severstal.

Because of the intense interest in the contract, The Brew is publishing the memorandum in full (see below).

Differs from Pattern Contract

Dated January 3, the memo gives Renco (listed as “Newco” in the document) carte blanche to review all job assignments, institute “nontraditional work assignments,” expand work duties and “modify seniority units as necessary to support the restructuring contemplated by this agreement.”

It further stipulates that “any agreements, practices or local working conditions that prevent, interfere with or inhibit the implementation of the restructuring program contemplated by this letter shall be eliminated or modified as necessary.”

The agreement with Renco and its billionaire owner, Ira Rennert, departs dramatically from the “national pattern contract” that the USW signed in September 2008 with ArcelorMittal, U.S. Steel and other major companies, which actually tightened rules against the use of outside contractors and did not alter job classifications.

Severstal did not sign the 2008 contract. In 2009, the USW rejected a proposal by Severstal to combine or contract out about 500 union jobs at Sparrows Point.

Ironically, McCall and his bargaining team granted concessions to Renco that are expected to result in approximately the same number of job reductions over the life of the 3½-year contract, informed sources told The Brew.

Last week, we reported that base pay under the new Renco contract will average $1.80 an hour below other USW-represented steel companies. The contract will permit Renco to change the present system of incentive pay and impose 12-hour shifts without the approval of affected employees.

Ballot Not Yet Distributed

The Renco contract requires the approval of steelworkers at Sparrows Point, Warren and Wheeling through a mail-in ballot.

However, the USW International has not yet distributed the ballot to members. A summary of the contract is expected to be distributed to members in the near future.

The absence of the ballot has led to criticism that the International is trying to force through the contract before members had a chance to vote on it.

Last week, it was announced that Renco expected to complete its purchase of Sparrows Point by the end of next week and restart the idled “L” blast furnace in May.

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