The Steelworkers union at Baltimore Specialty Steels Corp. has won what it calls a precedent-setting arbitration decision that prevents the company from shifting production work at the East Biddle Street facility to other plants.
More than 120 workers have been laid off and hundreds of others have seen their work hours reduced because the company shut down its finishing operations in February and sent steel bars for final processing to a non-union Pennsylvania plant, the union charged.
"It's going to mean a lot of money to a lot of employees" at BSSC, said Anthony Pulaski, president of United Steelworkers Local 3185. The amount of money to be paid to workers and the exact number of employees affected by the ruling remains to be determined, he added.
The arbitrator's decision came as the Steelworkers union faces a deadline this week in its effort to put together an employee buyout plan for the financially troubled BSSC plant.
BSSC's parent company, Armco Inc., has been trying to sell the Baltimore operation for more than a year but has not received an acceptable offer. Waiting in the wings, should other offers fall through, is a potential bid by the plant's top management.
In the arbitration decision this month, umpire Seymour Strongin ruled that BSSC violated its contract with the Steelworkers because it had the necessary equipment to finish the steel products in its own plant with its own employees.
While the company argued that it could finish the steel bars more efficiently at an out-of-state facility that had newer equipment, the arbitrator said that BSSC was nonetheless bound to finish them in Baltimore.
Armco had denied BSSC the money to buy new processing equipment, so BSSC invested in new equipment for the Shalmet Inc. plant in Deer Lake, Pa., and began shipping unfinished products there, the arbitrator noted.
According to the union, the investment in new equipment amounted to $2 million.
Under the arbitrator's ruling, Mr. Pulaski said, employees who have been laid off by the closing of the finishing operations will be recalled, and they will continue to collect back pay until they are back at work.
Raymond E. Hein, president of BSSC, would not comment yesterday on the decision.
Contracting out work has been a major issue for the Steelworkers union nationwide. Its recent contracts with big producers have focused on tight definitions of work to be done by union members.
"It's a very contentious issue for us, with enormous ramifications for job security and erosion of the skilled work force," said Gary Hubbard, a spokesman for the national union.
The Steelworkers union has won multimillion-dollar awards in arbitration of the issue at various plants, including Bethlehem Steel Corp.'s Sparrows Point facility. For the past three weeks, about 1,300 workers have been on strike at Lukens Inc. steel plant in Coatesville, Pa., over the contracting-out issue, Mr. Hubbard noted.
Typically, cases have involved bringing outside contract crews into the steel plant to do work traditionally assigned to plant employees, or failing to hire employees to perform a task in a plant. The difference in the BSSC case was that steel was shipped from the union plant to an outside contractor.
Workers fear Armco will close the Biddle Street plant, which produces stainless and coated rolled steel, if a buyer is not found. Employment at BSSC has fallen to about 600 workers from 900 three years ago. The plant has lost money in eight of the last 11 years.