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Bethlehem - steelworker contract.

"Developments in Industrial Relations" is prepared by George Ruben of the Division of Developments in Labor-Management Relations, Bureau of Labor Statistics, and is largely based on information from secondary sources.

Bethlehem-Steelworkers contract

The 1989 round of bargaining between four major steel producers and the United Steelworkers led off with a settlement for 20,000 employees of Bethlehem Steel Corp. The 50-month accord, approved by 79 percent of voting employees, was effective June 1, superseding the balance of the 37-month 1986 accord, which had been scheduled to expire July 31.

Bethlehem's chief negotiator said the new contract restored the wage and benefit cuts employees had accepted in the 1983 and 1986 settlements, and provided for additional improvements in wages and benefits, although the settlement recognizes that "Bethlehem is still a company in transition [from severe losses beginning in the early 1980's and continuing through 19861 that must continue to carefully control its costs." Bethlehem had profits of $174.3 million in 1987 and $403 million in 1988, reflecting the upturn domestic producers have experienced because of increased production efficiency and continued limits on imports from countries that allegedly give their producers an unfair advantage by providing subsidies.

The settlement, which the union hoped to use as a general basis for settlements with the other steel companies, provides for immediate restoration of the 8.09-percent wage cut adopted in the 1986 settlement. (The 1983 settlement called for a $1.31 an hour immediate cut, of which $1.25 was restored, in steps, over the contract term. It also continued the cost-of-living pay adjustment clause, subject to limits on the size and number of possible adjustments, in contrast to the 1986 contract, which suspended the clause.) In January 1991, employees will receive a specified wage increase averaging $1 an hour, followed by a January 1992 increase averaging 50 cents an hour.

Instead of reactivating the cost-of-living clause, the parties introduced "Inflation Recognition Payments" beginning in August 1992. Under die new approach, employees will receive annual adjustments in hourly pay equal to any percentage rise in the Bureau of Labor Statistics' Consumer Price Index in excess of 3 percent during the preceding 12 months. The money will be paid in quarterly lump sums, in contrast with the quarterly cost-of-living adjustments which were distributed as part of each weekly paycheck.

The Employee Investment Program, established in 1986 to compensate employees for wage and benefit sacrifices, was continued, with some changes. Although the June 1989 wage increase brings wages back to the 1986 level, the Program provides for two $500 payments-one made immediately and the other by March 31, 1990-to compensate employees for postponing the restoration of some benefits to later in the 1989 agreement. One of the payments will be an advance against the March 1990 profit-sharing distribution for 1989.

Beginning in 1990, 10 percent of Bethlehem's pretax profits will be allocated for distribution to employees; previously, the allocation was 10 percent of the first $100 million of profit plus 20 percent of any excess. Of the new allocation, 60 percent will be distributed in essentially equal amounts to all workers, based on their straight-time hours worked plus paid time off, The balance of die allocation will be distributed among the company's divisions in proponion to the profit they earned and then divided equally among each division's employees.

If there is no profit, employees will receive shares of Bethlehem's preferred stock, purchased from a company obligation equal to 35 cents for each paid hour in 1990 and 14 cents for each paid hour in 1991 and 1992. (Under the 1986 contract, employees were guaranteed paybacks of the wage and benefit cuts they accepted, in cash from profits or (if necessary) in dividend-bearing shares of Bethlehem stock.)

One employee concession to be restored (in January 1990) is time and one-half pay for work on Sunday, which had been cut to time and one-quarter in 1986. Similarly, three paid holidays dropped in 1986 will be restored-one each in 1990, 1991, and 1993.

An addition to the agreement is a jointly administered Career Development Program intended to improve the education, training, and personal development of employees, on and off the job. Bethlehem will finance the program at $300,000 a month, beginning immediately. In a move that will strengthen the union's efforts to open new jobs by curtailing overtime work, Bethlehem will also pay $5 into the program for each hour an employee works in excess of 56 a week, beginning in August 1990. The penalty rate will rise to $7.50 in August 1991 and to $10 iii August 1992.

Changes in the pension plan include a $3 increase in the minimum benefit rate, to $21.50 a month for each of the first 15 years of service, $12 a month for each of the second 15 years, and $14.50 a month for each year in excess of 30. For an employee retiring after 33 years of service, this would amount to a $99 increase in the $647 a month payable under the 1986 contract. For employees retiring under the alternate "percent of earnings" formula-which applies if it results in a larger benefit-inclusion of a $2.36 cost-ofliving pay allowance in die formula means a $156.90 increase in the monthly benefit for an employee retiring after 33 years of service.

The parties also agreed to aid 3,900 surviving spouses of pre-1974 retirees by giving them eight $500 payments at 6-month intervals, beginning in November 1989. Similarly, 8,000 surviving spouses of later retirees will receive eight $300 payments.

Insurance changes included a $25 a week increase in sickness and accident benefits, bringing the range to $226-$301 a week; substitution of a fixed-fee dental plan for the Preferred Provider Organization plan; and reduction of the annual major medical deductibles to $125 for an individual and $250 for a family, from $150 and $300.

In the safety area, the union will select-and Bethlehem will train and pay--fulltime safety representatives at specified plants; the parties will study the issue of video display terminals to assure the best conditions for operators; and company financing for safety shoes was increased.

In an apparent first among unionized steel producers, this agreement provides parental leave, permitting employees to take 30 days of unpaid leave for the birth or adoption of a child or to care for a family member suffering a catastrophic or terminal disability.

Despite the prosperity of the domestic steel industry in the last few years, the bargainers concluded that full recovery from job and financial losses had not been attained; therefore, they established a "National Policy for Steel Committee" to secure changes in national policies and laws "to create an environment in which the domestic steel industry may achieve sustained profitability and help ensure the well-being of employees, customers, shareholders, suppliers, and the steel acommunities." The new committee, cochaired by Steelworkers' president Lynn Williams and Bethlehem's senior vice president Curtis H. Barnette, and financed by the company at $300,000 a year, will press for adoption of specific goals, such as:

* Continuation of the Voluntary Restraint Agreements beyond their scheduled September 1989 expiration (these Agreements limit foreign producers' sales in the United States).

* Development of a national health policy to provide essential care to all citizens, control health care costs, and equitably distribute the costs across die economy.

* Dissemination of information to die public regarding the need to repair and rebuild the Nation's infrastructure.

* Actions to reduce budget and trade deficits, control inflation and interest rates, and encourage individual saving.

* Support policies intended to maintain and protect natural resources, consistent with healthy growth in the economy.

The contract did not contain new provisions resolving the union's concem over contracting out work, except existing provisions that applied to the production unit was extended to office and technical units.

Despite the overall gain in wages and benefits, some provisions from the 1986 contract were modified or retained, particularly at certain divisions still operating at a loss or at minimal profit levels. To help reverse the conditions at these operations, Bethlehem and the Steelworkers agreed to meet regularly to locate and solve problems.

The three other companies negotiating with the union toward settlements were Inland Steel Industries, Inc.; Armco, Inc.; and National Steel Corp. The industry's leading producer, USX, is not involved in negotiations because its 4-year contract expires in 1991. In the meantime, USX will have a cost advantage over Bethlehem because of the cost of Bethlehem's current settlement and because USX's 1987 accord called for larger cuts in employee compensation than did Bethlehem's 1986 accord. Prior to the 1986 abandonment of major steel producers' unified bargaining with the Steelworkers, compensation costs had been more-or-less equal at all of the participating companies.
COPYRIGHT 1989 U.S. Bureau of Labor Statistics
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Title Annotation:developments in industrial relations
Author:Ruben, George
Publication:Monthly Labor Review
Date:Jul 1, 1989
Previous Article:International developments in apprenticeship.
Next Article:Xerox - Textile Workers settle.

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