CHICAGO Members of United Steelworkers union Local 3643 ratified a two-year contract extension May 5 with Alton Steel Co., which local president Terry Wooden called a win-win for both sides, as it provides stability for members and allows the company to know what its fixed costs will be through the end of the contract.
The Alton, Ill.-based company approached Wooden roughly two months ago about extending the existing contract, which was to expire this August. It now expires in 2015.
"It took about six weeks of talking to come to terms," he told AMM. "The terms are consistent but a little better on the hourly (wage) rate."
Workers will get a 3-percent raise in each year of the contract, which Wooden deemed "a decent increase."
While Wooden didnt know the exact vote tally, he was told by poll watchers that 97 percent of members voted in favor of the agreement, which covers about 260 hourly employees.
The agreement was reached because the company and the union have a good relationship, president and chief executive officer Charlie Linnemeyer told AMM.
"In this very competitive market, we wanted to lock in what our work-force costs were going to be (because) we have some capital projects we want to do. We are looking at the melt shop and the bar mill," he said.
Alton produces roughly 300,000 tons of special-bar quality and merchant-quality steel bar products annually. Settling the contract extension "allows us to look a bit closer at what we can do and cannot do." Company leaders are looking at specific projects but havent settled on its top priorities yet.
As part of the contract extension, Alton will raise its contribution to the unions pension fund by 20 cents per hour over the next two years, and "our health-care coverage will remain the same with no employee contribution," Wooden said.
Linnemeyer said Altons strongest market is the automotive supply chain, including forgers and cold-finished bar mills.
An inventory reduction by manufacturers and dealers of off-road machinery and heavy trucks that began in the second half of last year has stabilized, he said, and equipment makers "are starting to buy steel as needed." Alton, which has a 10-week backlog of orders, also sells "a lot to service centers. That seems to be picking up as well."
Linnemeyer is pleased Alton has survived the past 10 years. The company rose from the ashes of Laclede Steel Co. in May 2003 (amm.com, May 29, 2003). "Not only did we come back, we have stayed in existence," he said.