Bankrupt Bethlehem Steel Corp. and the United Steelworkers of America are expected to begin talks next week over a new contract, although it is clear the two sides are going into the negotiations with vastly disparate goals.
After a meeting with presidents from locals across the country, the union said yesterday that it is willing to pursue a "wide range of innovations" in the bargaining process in order to save jobs. The Steelworkers are "prepared to look at ways to more efficiently operate our plants, provided that it is done with fewer supervisors, protecting seniority, safely and with Steelworkers."
Robert S. "Steve" Miller Jr., chairman and chief executive officer of Bethlehem, said yesterday that the company is seeking more flexible work rules, compensation that is tied to production goals, and the ability to hire more contract workers for noncore work. He also wants to change the workers' health care plan to include more co-pays and deductions to lower the company's costs. Health care for retirees is at even greater risk of cuts.
Additionally, the company expects the federal Pension Benefit Guaranty Corp. to take over the company's pension plan in the next few months, at which point Bethlehem wants to switch from a defined pension plan -- in which a certain payment is guaranteed -- to a 401(k) plan.
"Change is coming, and I think the union understands that," Miller said.
The changes sought by the company would put Bethlehem's compensation plan more in line with those of minimill operators, such as Nucor Corp., and the former LTV Corp., which recently reopened under new ownership and streamlined benefits.
The Steelworkers said yesterday that they are willing to look at some of the issues put forward by Bethlehem but that a number of changes are off the table. The union said it wants Bethlehem to maintain workers' current benefits and wages, keep its defined pension plan and "provide medical care for existing retirees to the maximum extent possible."
Bethlehem employs about 3,400 at its Sparrows Point plant, and the Baltimore area is home to about 20,000 retired steelworkers. The company filed for Chapter 11 in October with a pension plan that was underfunded by $2 billion and a health care obligation of $3 billion.
"We've never been content to leave our fate in the hands of others," Steelworkers President Leo W. Gerard said in a statement. "Now more than ever, we're stepping forward to provide this industry with the leadership it desperately needs. We just hope the management of these companies has the good sense to cooperate with us in forging these sorts of innovations."