Steel giant ArcelorMittal SA (MT: Quote) and the United Steelworkers union have failed to reach a labor deal with just a day left for the expiry of the current four-year labor contract as they remain in "conflict", according to a release by the USW on Thursday.
"We are reaching the point where the conflict between our two contrasting visions for a strong and viable future for our plants, our jobs, our families, and our communities is becoming ever more stark," USW said in a update released to its workers.
The company is said to be insistent on two-tier wages and benefits scale, which could be unfair and create conflict and division, as well as cutting back on health care. However, the company sees the short-term cost savings by paying new hires lower wages as the better option.
The steel companies are trying to controls costs to be competitive as the steel industry is already reeling under falling prices and lower demand. The earlier contract was signed in 2008, just before the financial meltdown, which has been a heavy burden for the steel companies.
The contract will cover about 26,000 unionized workers at U.S. plants operated by U.S. Steel Corp. and ArcelorMittal, which has about 14,000 workers from 15 USW local unions.
The union reportedly said that it is nearing a four-year labor deal with U.S. Steel, but the talks have reached a dead end with ArcelorMittal and has stalled. U.S. Steel is also trying to cut on health-care and pension costs for current workers and retirees.
The union could be gearing up for a strike at ArcelorMittal if a deal is not reached or the current labor deal is not extended.
Meanwhile, ArcelorMittal, the world's largest steelmaker, is also bracing for the potential work stoppage under a nationwide shutdown and is said to have taken steps to shut down its furnaces and other equipment. The company has taken these measures during past labor negotiations also.
However, the union leaders are yet to vote to authorize a strike. The union would not like to harm the general image of labor unions during an election year. They also see that a shutdown of its U.S. plants will do little harm to ArcelorMittal as it has the capacity in Europe and Canada to replace lost production.
"We remain committed to working with the company to reach an agreement that is fair to both sides—one that allows the company to remain competitive while ensuring good jobs and good benefits now and into the future," the union added.
MT closed Thursday's regular trading session at $14.49, down $0.33 or 2.23% on a volume of 3.93 million shares.
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by RTT Staff Writer
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