The union negotiator who signed a controversial labor contract with the incoming buyer of Sparrows Point “never intended” to reduce incentive pay for union workers, John Cirri, president of the steelworkers local, said last night.
Cirri described the incentive agreement – whose terms The Brew disclosed here – as a mistake that gave too much power to management. The agreement was signed by David McCall, top negotiator for the United Steelworkers (USW), and Ari Rennert, representing Renco Group, whose RG Steel subsidiary is buying Sparrows Point and the Warren and Wheeling mills from Severstal.
The agreement eliminates all incentive pay for six months, then caps incentives at 20% of base pay over the remaining life of the 3½-year contract.
The pay scheme puts Renco employees below the wage scale of the national “pattern” contract covering USW members at ArcelorMittal, U.S. Steel and other steel companies. The new contract also combines jobs and reshuffles work assignments that will eliminate hundreds of union positions over time.
John Cirri, president of Local 9477, held out the promise that McCall would renegotiate the incentive agreement with Renco. “McCall negotiated the contract. I fully support his efforts,” Cirri was quoted as saying.
About 200 steelworkers crowded into the steelworkers hall on Dundalk Avenue yesterday to hear more about the contract.
Under skeptical and at times hostile questioning, Cirri was asked by members how they could evaluate a contract that has not been published and whose terms have been disclosed only in summary form.
Cirri said the International was preparing to mail the contract to the 6,000 USW members at Sparrows Point, Wheeling and Warren. The mailing will include a ballot to return to the International’s headquarters in Pittsburgh for ratification.
The mailing will occur in the next two or three weeks and will be followed by an informational meeting with McCall, who will travel to Baltimore to answer questions.
After the informational meeting, votes mailed to Pittsburgh will be counted by union reps. Cirri said he plans to go to Pittsburgh to count the votes from Sparrows Point.
“Is this vote on the up and up?” one man asked Cirri.
“Of course,” he replied.
Asked what happens if the contract was voted down, Cirri said he expected Renco and the USW to enter into new talks. The results of the vote would not affect the sale to Renco, which is expected to be completed by March 31.
“We Did Our Best”
Several members told Cirri that the union needs a new negotiating team to represent the rank-and-file, according to sources who attended the meeting.
“Who will be our new negotiator,” one speaker asked.
“Whatever’s in the bylaws,” Cirri answered cryptically.
Cirri defended the contract as the most favorable the union could get out of Ira Rennert, the billionaire owner of Renco Group.
“I said we were going to do our best to get a pattern contract. And we did our best,” he said.
Because Severstal did not sign the pattern contract, employees at Sparrows Point, Warren and Wheeling have been working under a 2003 contract that’s been extended on a month-to-month and, more recently, day-to-day basis.
As a result, base pay at Sparrows Point is currently $2.80 an hour below “the pattern.” The contract with Renco will increase base pay by $1 an hour.
Renco “Rescued” Sparrows Point
Several union members said they would vote for the contract because they figured they had no choice and were eager to get back to work.
Cirri vowed that all currently laid-off workers would have a job under Renco, but could not predict a timeframe when they would be recalled. The “L” blast furnace is expected to be producing hot metal in 45 days and the hot-strip mill operating shortly after that.
A representative of the International, Frank Rossi, took to the floor to praise Renco and defend McCall.
“Ira Rennert stepped up to the gate and decided to buy these plants against [the wishes of] his own chief advisor,” Rossi said, according to sources who attended the meeting.
If anything’s to be blamed for the terms of the new contract, it’s the economy, Rossi said, adding, “There’s no better negotiator I know than McCall. This talk that he negotiated a bad contract, I don’t see it.”