BRACKENRIDGE, Pa. — For two years, Chris Cummings, a maintenance mechanic, worked 7 a.m. to 7 p.m. six days a week to help prepare for the opening of a gigantic $1.2 billion steel rolling mill that was supposed to bring hundreds of secure, well-paying jobs to the Allegheny River Valley.þþBut then Mr. Cummings’s employer, Allegheny Technologies, locked him and his co-workers out after their union, the United Steelworkers, balked at accepting the far-reaching concessions that the company said were essential to help compete against domestic rivals and Chinese imports.þþSince Aug. 15, Allegheny has locked out 2,200 workers at 12 plants in six states in what has become one of the nation’s largest and longest work stoppages in years.þþAs unions have weakened in recent decades, more corporations have turned to lockouts to wring givebacks from their workers. In this latest showdown, Allegheny has taken on the nation’s biggest, most combative industrial union. If the steelworkers lose, it could prompt another wave of me-too concessions and represent a further humbling of organized labor just as it was starting to gain ground on other fronts.þþ“The employer is playing hardball, there’s no doubt about it,” said Richard Hurd, a professor of industrial and labor relations at Cornell University. “It puts a lot of pressure on the workers and the union.”þþAlready, Allegheny’s three-and-a-half-month lockout has dealt a painful blow to this aging, blue-collar town, 22 miles upstream from Pittsburgh, raising doubts about whether the new rolling mill, with its bright blue walls soaring 40 feet above the river, will ever provide the big economic lift it had promised.þþCompany executives say that they need lower labor costs and that no one will gain if the new plant can’t thrive in the global economy.þþBut many steelworkers say Allegheny is seeking to enhance its own prosperity at their expense. They contend the company is undermining the middle class in the nation’s industrial heartland by demanding a two-tier contract with lesser benefits for future hires, insisting upon a four-year wage freeze and requiring many employees to pay at least $2,000 more a year for health coverage.þþ“This is our reward for putting in all this overtime to help open the new mill?” asked Mr. Cummings. “I do think it’s absolutely necessary for the company to stay competitive. But they’re asking too much.”þþDuring his 70-hour workweeks, Mr. Cummings said he often returned home after his son, now 6, and his daughter, now 20 months, were in bed. “My wife was telling me she felt like a single mom,” he said.þþAfter locking out its workers, the company brought in hundreds of temporary replacements. The unionized workers have been picketing outside the plant around the clock, with signs mocking the replacement workers, saying things like “Danger: Scabs Trying to Run Mill” and “Scabs Equal Dishonor.”þþInstead of picketing, Fran Arabia, president of the steelworkers’ local here, said, “we should be cutting a ribbon right now.”þþWeek by week, the locked-out workers are growing more anxious. The company terminated their health coverage on Nov. 30. Christmas and freezing weather are approaching, and their six months of unemployment insurance will run out in February.þþRobert S. Wetherbee, the president of Allegheny’s Flat-Rolled Products division, said the company needed to drive a hard bargain because the market had shifted significantly. Stainless steel prices are down 30 percent since April and Chinese producers are gaining a greater share of the business. The company’s flat-rolled division, he said, lost money in 10 of the last 11 quarters.þþMr. Wetherbee said Allegheny’s workers were very well paid, averaging $70 an hour in compensation, including pensions, health coverage, overtime and paid time off, some $20 higher per hour than its competitors. The union called those numbers vastly exaggerated.þþ“It became a competitiveness issue and to some degree a survival issue for the stainless steel portion of our business,” Mr. Wetherbee said. “With this mill, we invested close to $400,000 per job in the Allegheny Valley. Now we have the obligation to keep the business competitive.”þþThe new rolling mill — four football fields long — is a marvel of automation. Workers hunch over control panels that monitor six powerful milling machines that press, squeeze and flatten two-foot-thick red-hot slabs into nearly mile-long coils of thin steel sheet in a matter of seconds.þþWith one-third of Allegheny’s blue-collar employees eligible to retire before 2020, Mr. Wetherbee said it made sense to seek a two-tier contract.þþ“We’re faced with a once-in-a-generation opportunity to bend the cost curve on a major part of our costs,” he said. “If we’re going to be competitive, we have to be in a position where we have a different benefit structure for the next generation we hire.”þþLike many unions, the United Steelworkers abhor two-tier contracts, convinced that they sell out future generations and sow tensions between older and younger workers.þþThe steelworkers complain that Allegheny wants to replace traditional pensions with less generous 401(k)’s for new workers and to give them a health plan that is not as good as the one current workers have. Under the two-tier proposal, future workers, upon retiring, would have a more meager health plan and no life insurance.þþ“The China crisis of today doesn’t mean that people who go to work for this company and retire 35 years from now shouldn’t have anything in retirement,” said Tom Conway, the steelworkers’ vice president overseeing the negotiations. “We’ve made major moves in this bargaining, to share more of the health costs, and it’s just not enough for them.”þþNot long ago, when the company was called Allegheny-Ludlum, workers endearingly called it “Uncle Al” because of its generosity. But the steelworkers say Mr. Wetherbee, who joined Allegheny in 2010 after 30 years at Alcoa, has brought a more confrontational approach.þþ“He told us that they couldn’t be this paternalistic,” Mr. Conway said. “If this is paternalistic, I’d hate to see what an abusive parent is like.”þþAnalysts are divided over the concessions the company is seeking.þþPaul Clark, director of Penn State’s School of Labor and Employment Relations, said Allegheny was seeking to exploit the temporary fall in prices and profits to extract deep permanent cuts. “They’re using the excuse of the industry downturn,” he said, “not just to adjust to the new situation; they want to go well beyond what’s justified by the downturn.”þþBut John Tumazos, a steel industry analyst in Holmdel, N.J., criticized the union’s approach. “Leo Gerard, the union’s president, is thinking of the century-old model, holding rallies in downtown Pittsburgh and mill towns, when this company is between a rock and a hard place,” Mr. Tumazos said. “The union isn’t making things better. They should be holding their protest rallies in Beijing.”þþAccording to Allegheny Technologies, the steelworkers averaged $94,000 in pay last year, including incentive pay and overtime. “That’s not middle class, that’s upper middle class,” said Dan Greenfield, the company’s vice president for investor relations.þþTodd Barbiaux, an overhead crane operator, derided that figure, saying it failed to take account of last year’s unusual situation.þþ“In reality we’re $60,000-a-year guys,” he said, even when incentive pay and Sunday differential are added to the steelworkers’ base wage of $24.99 an hour. With the push to build the new mill, he made over $100,000 last year only because of “a lot of 80-hour weeks, with more than 600 hours overtime.” But that’s not normal, he said. “You’re working one and a half years in a year.”þþThe steelworkers are further angered because they’re being pressed for major concessions after Allegheny’s chief executive, Richard Harshman, received $8 million in compensation last year, up 70 percent from the previous year. His 2014 pay jumped because of a larger base salary, a $1.4 million bonus, more stock awards and a pension that was valued higher.þþMr. Harshman told analysts in October that the company’s production was meeting expectations notwithstanding the lockout. But the steelworkers dispute that. As they spend their days picketing, they say they see far fewer trucks carrying steel coil out of the plant.þþThe union, asserting that the company has violated labor laws, has asked the National Labor Relations Board to declare the lockout illegal and order the company to pay more than $30 million in back wages. Company officials insist the lockout is lawful.þþScott Laliberte, who fixes brick linings in Allegheny’s steel furnaces, said he sometimes worked 30 days in a row last year, allowing him to save extra money. But the physical strain was too much. “You feel you don’t have a life,” he said.þþThe lockout is taking a further toll on his family, he said. “If this goes on,” he said, “I’ll probably find another job and not go back. They’re going to lose a lot of good people.”þþThe union wants to return to regular workdays, after having agreed to extra-long workweeks to get the new rolling mill running. Mr. Laliberte and other steelworkers are fuming that the company’s proposal would allow it to require such schedules as it sees fit, including 16-hour days and 70-hour weeks.þþMr. Wetherbee said Allegheny would never have another opportunity like this to bring down costs and assure profitability. “We decided we couldn’t kick the can down the road any further,” he said.
Source: NY Times
