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Steel’s Decline Not Over, USW Bargainers Told

December 17, 1985

CHICAGO (AP) _ Three years after agreeing to landmark contract concessions, the United Steelworkers will negotiate next year in an atmosphere of continuing job losses and plant closings, union bargainers were told Monday.

A 76-page study, commissioned from Locker-Albrecht Associates Inc. of New York, also suggested that the union that represents the bedrock of blue-collar America may find its bargaining leverage reduced to doling out concessions to individual steel companies in order to slow the loss of jobs and pay.

The report said bankers and government officials should be brought to the bargaining table because big steel’s problems include bloated debt financing that cost major producers at least $500 million this year and U.S. trade policies that allow for rigorous competition from cheap foreign metal.

″This study demonstrates conclusively what we have been saying for years, that the government must join in formulating a coherent national industrial policy and that government fiscal and trade policies brought the industry to its present sorry state,″ USW President Lynn Williams said.

Negotiations are expected to begin early next year between six leading producers employing about 220,000 USW members and a union bargaining team directed by a conference of the 570 presidents of steel-making locals. For the first time since coordinated bargaining began in 1956, the companies will bargain for individual contracts.

The last time the sides negotiated, the USW agreed to a national pact that reduced union members’ pay by an average 10 percent, or $2.20 per hour. The average hourly labor cost is $23 including wages and all benefits. It was the first time the USW had given back wages on a national level.

Monday’s union session, devoted to hearing the Locker study, was suspended at midday to allow the 400 delegates to march to the Chicago Tribune building to support striking production employees who walked off the job July 18 in a dispute over automation.

The Locker report sounded little like a union resolution adopted earlier this month calling for a higher standard of living for USW members.

″The forces devastating the industry and its employees will not weaken,″ the report said.

The study named LTV, Armco and Bethlehem as companies facing an immediate financial crisis, and it said ″unless they receive relief in the near future from all parties, there is a real possibility they will face bankruptcy and possible liquidation.

″For those facing an immediate cash crisis, wage or benefit reductions may have to be considered to help forestall bankruptcy,″ Locker said.

The federal Bureau of Labor Statistics recently estimated that 219,000 workers lost their jobs in primary metal manufacturing between 1979, the steel industry’s last good year, and 1983. The Locker study projected that the industry work force, now numbering about 200,000 people, will fall to 172,000 in the next few years.

Locker also told the union bargainers that President Reagan’s steel import restraints will not meet the president’s goal of limiting foreign metal to 20 percent of the U.S. market.

U.S. steelmakers have the world’s highest production costs, $312 per ton for common products, compared to $205 per ton for Korea, the report said.

The study also found that rather than increase their payments for health insurance, pensions and other benefits by recalling furloughed employees, U.S. steel companies increasingly pay overtime. Nearly 14,000 idled employees could have been recalled this year alone if overtime had been eliminated, the report said.

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