Bethlehem, USX, union reach pacts

Five-year contracts greatly increase pension benefits

But $2 pay raise deplored

Jointly bargained accord links lump payments to profits

August 07, 1999|By William Patalon III | William Patalon III,SUN STAFF

Union workers at both Bethlehem Steel Corp. and USX-U.S. Steel Corp. have approved new five-year contracts with the two companies, the United Steelworkers of America union said late yesterday.

The deal covers unionized workers at Bethlehem Steel's local Sparrows Point Division.

"Our members have done more than their share to make sure the American steel industry is the most productive in the world," said George Becker, president of the 750,000-member Steelworkers union. "These agreements will make sure they and their families are rewarded with considerably more security in return for their hard work."

Said Gary Valentine, treasurer for Steelworkers Local 2610, which represents some Sparrows Point workers: "This is an important contract. I think it's quite a bit better for retirees."

The union said Bethlehem workers, including those in Baltimore and others at its Burns Harbor, Ind., facilities, ratified the contract by a vote of 6,792 to 2,048. Workers at U.S. Steel approved their agreement 7,898 to 3,318.

The deals grant workers raises of $2 an hour over the five years: a raise of 50 cents per hour Feb. 1, followed by another 50-cent increase Aug. 1, 2001, and $1 an hour Feb. 1, 2003, according to copies of the agreement obtained by The Sun.

But the contract's key features may be those relating to pensions.

Minimum monthly pension payments for workers with 30 years' experience rise to $1,575 starting next August -- the monthly payment now is $817.50. In August 2002, the payment will rise to $1,687.50.

A one-time payment between $216 and $486 will be made to current retirees Aug. 1 of next year -- the amount determined by retirement date. Future lump-sum payments will depend on the level of profits earned by the two steel companies.

For the first time, the surviving spouses of union workers who die before retirement will receive any lump-sum payments made to surviving spouses of Steelworkers who die after retirement.

A number of workers have complained bitterly about the raises, which they feel are too low and come too far into the five-year agreement. However, union officials contend that the raises are reasonable and said that, with an aging work force, the pension benefits make this settlement a very good one for union members.

"The new five-year agreements, which take effect immediately, assure an uninterrupted supply of steel for our customers," said Curtis H. "Hank" Barnette, Bethlehem's chairman and chief executive officer. "We believe the contracts are fair and competitive and in the interests of our employees, customers, suppliers, shareholders and the corporation."

The settlement comes as Bethlehem is struggling to make money, having recently reported a quarterly loss that was bigger than Wall Street expected. At Sparrows Point, more than $600 million is being spent by Bethlehem or joint-venture partners on a modernization project many industry watchers believe will revitalize the aging steelmaking facility.

Bethlehem executives continue to blame the company's travails on cheap imported steel, much of which is being illegally "dumped" on the U.S. market. The steel industry has filed dumping charges against steelmakers in several countries, key among them Japan, Brazil and Russia.

Against this backdrop, brokerage house analysts this year warned that strikes would be disastrous for the U.S. steel industry.

Instead, the union and these two companies were able to hammer out a deal acceptable to both sides. This deal marks the first time in 16 years that Bethlehem Steel and U.S. Steel conducted joint talks with the union.

Pub Date: 8/07/99

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