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U.S. Steel, Lake Erie union in 5-year labor deal

Sep 03, 2013 | 04:59 PM | Catherine Ngai

Tags  steel, U.S. Steel, flat-rolled steel, Charles Bradford, Bradford Research, USW, Local 8782, Bill Ferguson Lake Erie Works


NEW YORK — U.S. Steel Corp. and unionized workers at its Lake Erie Works have reached a five-year labor deal, effectively ending an 18-week lockout, the union said.

United Steelworkers union Local 8782 saw 79 percent of its membership turn out for the Aug. 30 vote, with 57 percent accepting the contract offer, according to the union’s website.

The vote came just weeks after union members rejected an offer from the Pittsburgh-based steelmaker (amm.com, Aug. 1).

While the new agreement hasn’t been made official, a memorandum set in place has allowed locked-out workers to start receiving mandatory two-day safety training, with operations resuming immediately, Local 8782 president Bill Ferguson told AMM.

"We’re in the midst of a recall for everyone to the plant to get a two-day safety refresher," he said. "Then, we’re anticipating a start-up."

U.S. Steel is "pleased to be in a position to begin the recall of our work force in the coming days," and expects employees to return to work within the next 30 days, a company spokesman told AMM via e-mail. "While it is unfortunate that circumstances led both parties into this labor dispute, we are pleased that we are emerging with a fair contract that will help to make Lake Erie Works sustainable and competitive in both the Canadian and global marketplace for the next five years."

The lockout, which began when both parties failed to reach a compromise following the April 28 expiration of an existing three-year contract, affected some 1,000 unionized workers at the Nanticoke, Ontario, facility (amm.com, April 29).

Approval of the deal came days before Mario Longhi assumed the top spot at U.S. Steel. Ferguson hopes this will mean a renewed relationship between the company and the union.

"At the end of the day, this thing has gone on for four months already. Our hope is that if the product mix is good, if we’re doing high-end automotive steel and address the market that way then everyone can make money," Ferguson said.

The union told members last week that if the latest proposal were approved, it would take three weeks to finish the existing reline of the blast furnace and start production (amm.com, Aug. 29), with the hot-strip mill resuming operations "as quickly as possible."

While the blast furnace would take weeks to restart, putting supply back into the sheet market will depend on how much slab inventory the company has held, Charles Bradford, analyst at New York-based Bradford Research Inc., pointed out. If there are slabs already on the ground, then the market will start receiving those extra tons.

However, a restart would have little effect on spot prices in the near term, he added.

"I don’t think they’re going to try to get back into the market very quickly," Bradford said. "It’ll be a slow process. U.S. Steel hasn’t been a big aggressor when it comes to spot prices."

With a number of outages in the fourth quarter, including Nucor Corp.’s Berkeley upgrade and ArcelorMittal’s Cleveland outage, the sheet market might hold out for a while longer.

Others agreed, noting that the outages slated for the final few months of the year should bring some near-term stability to the sheet market.

"Foreign isn’t a factor anymore," one trader said. "I think for Lake Erie, obviously, it’ll supply some steel back in the market. But it’ll take time for them to get it up and running, so I don’t see any major collapses for the moment."




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