Steel union agrees to cut in pay to help depressed industry rebuild
Labor bargaining has taken another step away from past patterns. The United Steelworkers and seven major steel producers have agreed, six months early, to a new contract that will reduce wages and paid time off - temporarily, says the union - to help revive a deeply depressed industry.
The agreement, hammered out in time to meet Tuesday's unofficial settlement deadline set by major steel customers, was the union's first in four decades of collective bargaining with the steel industry to give up benefits.
For half a century, unions have fought, and, when resisted, struck to ''improve'' contracts in each bargaining round. To a large extent, there has been a follow-the-leader pattern in negotiations. An increase won by one major union in bargaining became the floor under contract talks involving other unions.
The difficult times for many major industrial companies during the past two years have changed that. While pattern-bargaining might not be dead, it is suspended in industry generally. There is a trend for bargaining for what major companies can afford and away from union demands for ''the best ever'' contract settlements including substantial pay increases, regardless of the financial position and prospects of employers.
The terms of the settlement, ratified by better than 2 to 1 by local union presidents on March 1, reduced basic and incentive pay by $1.25 an hour (the average has been $14.33 an hour) with a stipulation that the pay cut will be repaid through increases of 40 cents an hour in 1984, 40 cents in 1985, and 45 cents in 1986. The reduction this year is about 9 percent for a union that traditionally has been one of the most militant in demanding and winning annual raises.
The steel union also gave up a 6-cent-an-hour cost-of-living adjustment (COLA) that was due Feb. 1 and five other adjustments through July 1984. It will suspend COLA one year beyond that if the US inflation rate is below 4 percent. Later adjustments will be made if the rate goes above 1.5 percent and the present COLA formula will be retained.
One week of paid vacation and one paid holiday, United Nations Day, will be eliminated in 1983. Sunday overtime pay rates will be reduced slightly until 1986. And, among other concessions, more than 100,000 steelworkers with high seniority will give up an extended vacation plan temporarily.
The concessions are valued at about $2 billion through July 31, 1986. The companies agreed in a ''letter of intent'' to use the savings for the needs of existing facilities - largely for ''capital equipment needed to modernize'' plants or to preserve working capital. None is to be used in oil or nonsteel businesses of diversified steel companies.
Industry sources in Pittsburgh called the settlement ''historic,'' as the first in half a century to reverse a pattern of steel contract increases. They said that the concessions will go a long way in reducing industry problems.
At the start of this year, more than 260,000 workers were employed in the steel industry, and of these, 140,089 are currently on layoff. US mills have just been reported operating at a low 50.3 percent of capacity.