Steeling for Some Givebacks

With half its workers laid off, the union okays a pay slash

For decades every contract signed by the major steel producers and the United Steelworkers brought higher wages and benefits for the people in the grimy business of running America's blast furnaces and rolling mills. In time steelworkers became the highest-paid blue-collar employees in the U.S. In January their average hourly pay ran at $14.39, vs. $13.07 for auto workers and $8.71 for manufacturing workers generally.

Last week, after a year in which the domestic makers lost $3.3 billion in their steelmaking operations, the industry's long-rising wage curve bent downward. The union and the major companies agreed to a new 41-month contract that temporarily cuts Steelworkers' pay by 9% — about $1.25 off the basic hourly wage. The pact gives up other things too.

Sunday pay, for example, will drop from time and a half to time and a quarter. Steelworkers with ten years' seniority will forfeit the extra 13-week vacation they get every five years, and all workers will lose at least a week of vacation for one year. United Nations Day, barely celebrated by anyone, will disappear as one of the Steelworkers' paid holidays, leaving ten a year.

The union, with 50% of its 260,000 active steelworker members at the big companies on layoff, seemed to have little choice but to give up something or face even more job losses in an increasingly hostile employment picture. The Labor Department reported last week that the civilian jobless rate in February stayed at the high January level of 10.4% of the work force.

The companies have been trying unsuccessfully for nine months to cut wages. In November management won an 11% pay reduction in talks with the union's leaders, but the presidents of the union locals subsequently voted down that cut. Last week's agreement was approved 169 to 63 by the local chiefs representing workers in the seven largest companies: U.S. Steel, Bethlehem, Jones & Laughlin, Republic, Armco, National and Inland.

Adding to the pressure on negotiators for both sides were big steel users, among them General Motors. It had threatened to begin ordering supplies this month from foreign makers if no contract was reached. Such an impasse would have left the industry vulnerable to a strike after Aug. 1, when the old contract was to have lapsed. Last week's deal supersedes that one, and it will run through July 1986. The reduction in hourly pay becomes effective immediately. But it will be restored in increments in 1984, 1985 and 1986. That did not appease everyone. Said Fran Rattigan, 46, a structural steelworker at U.S. Steel's giant Homestead works in Pennsylvania: "If we have to take a cut, everybody else should make concessions — doctors, lawyers, dentists, Congressmen, Senators, even Presidents."

Paradoxically, the givebacks come just as things are looking a little brighter for the domestic industry. Orders for steel are picking up. For its part, U.S. Steel plans to fire up an idled blast furnace at its Edgar Thomson works in Pennsylvania, which has not made iron for more than a year. In February, steel production was running at 50.3% of capacity, a huge jump from December's low of 29.8%.