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Union Has Little to Celebrate on Its Birthday

February 12, 1986|Harry Bernstein

There won't be many champagne corks popped by members and leaders of the United Steelworkers of America this year to observe the union's 50th anniversary: They have little to celebrate.

In the past four years, the USW lost half of its 1.4 million members--the most devastating reduction ever suffered by any major union in this country in such a short time.

No one knows how many of the 700,000 former members have found other jobs or how much money they're now making.

But spot checks by the union and some industry sources indicate that well over 200,000 are still looking for work. And many of those who have found jobs are earning substantially less than the $12 to $15 an hour, and more, that they made as USW members.

Also putting a damper on an anniversary celebration are this year's contract negotiations, which will be as difficult as any the union has ever faced in its history. Significant contract concessions by the union seem inevitable.

Bargaining talks have started, or will soon, between union negotiators and representatives of the nation's steel, copper and aluminum industries, among others.

The union and its remaining members know that they are not bargaining from a position of strength. Strikes are being lost by unions more and more frequently these days and many of the companies that the USW will negotiate with are either losing money or making only small profits.

Where there is a spirit of labor-management cooperation, concessions by labor may come without strikes. In return, though, the workers want some guarantees that they will share in any future gains and that they and their unions will have a significant voice in companies' decision-making processes.

Something of a precedent along those lines may have been set in the steel industry by last year's agreement between the USW and Wheeling-Pittsburgh Steel Corp.

There had been a prolonged strike by workers determined to resist the demands of the firm's confrontational chairman, Dennis J. Carney, who insisted that they accept a cut in the value of their wage and benefits package from $21.40 to $15.10 an hour. He offered nothing in return.

But financier Allen E. Paulson bought control of the firm, adopted a non-adversarial relationship with the union and got rid of Carney and two of his aides by, among other things, giving them $2.3 million in severance pay--not too bad a deal for a man who was certainly no financial savior for the company and had insisted that its workers take drastic pay cuts.

The company did seek protection under Chapter 11 of the U.S. Bankruptcy Code, but then, spurred by the cooperative spirit that Paulson developed, the workers accepted wage and benefit cuts of about 16%, dropping the cost of the package to $18 an hour, instead of the $15.10 that had been demanded by Carney. The workers were also given more authority to help run the company and when Paul D. Rusen, the union's chief negotiator with Wheeling-Pittsburgh, retires in March, he is expected to become a member of the firm's board of directors.

The Wheeling-Pittsburgh agreement will not be an exact pattern for other steel firms now starting their own negotiations because the industry no longer bargains on an industrywide basis. And it is clear that the union is going to resist giving prosperous firms the same concessions that it grants to those in financial trouble.

But the union has already had what it calls constructive preliminary talks with executives of the Bethlehem, Armco, Inland, National and LTV steel companies, and that is raising hopes that those firms can reach settlements without strikes.

However, giant U.S. Steel so far has not joined the "let's cooperate" crowd and there could be serious problems if the union, to avert a strike, gives U.S. Steel more concessions than it offers the other, more amiable firms. In that case, the other companies will expect similar concessions.

Far more ominous for USW members, though, are the demands made last week by Kennecott Corp. that its workers, who are represented by the steelworkers union, accept wage and benefits reductions of 33%.

The union is acutely aware that Kennecott, like most of the rest the copper industry, spends more to produce a pound of copper than it can sell it for but insists that it will strike to resist the company's demands.

Labor costs may be part of the problem for copper, as they are in other industries. But when, for instance, it costs 80 cents or more to produce a pound of copper that sells for only about 60 cents these days, even drastic labor cost cuts obviously are not going to save the U.S. copper firms. Just five years ago, copper was selling for $1.40 a pound, and labor costs had nothing to do with the dramatic price drop.

There are many issues other than labor costs that are complicating the efforts to find a solution for firms such as Kennecott, which has lost $600 million since 1981:

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