USW Committee Unanimously Approves Agreement with RG Steel

The United Steelworkers said Friday that its negotiating committee has reviewed and unanimously approved the tentative agreement the union announced last week with RG Steel, which has entered a stock purchase agreement with Severstal covering about 6,000 USW represented workers.

The union is currently preparing a summary of the proposed new agreement to send to its members with a mail-in ballot, said John Cirri, president of United Steelworkers Local 9477 at Sparrows Point. 

"You always have people who think we should've gotten more," Cirri said, referring to the terms of union wages, benefits and pension plans, "but this tentative agreement allows us to restart our plant and bring our people back to work."

The tentative agreement, effective upon ratification, would expire in September 2014. In 2008, steelworkers at Sparrows Point began working on a month-to-month contract after Severstal failed to reach a long-term contract with the union. After the proposed sale of Sparrows Point was made public last year, steelworkers there have been working on day-to-day extensions.

Cirri said the tentative agreement calls for pattern wage increases, health care and pension improvements. It also restarts the health care benefits and Sparrows Point Trust contributions for laid off steelworkers who have lost such coverage.

Cirri said he could not go further into the details of the tentative contract at this time.

In the coming weeks, the union will schedule explanation meetings for members to review the tentative agreement with their local and international USW representatives at each location, including plants in Wheeling, WV., and Warren, Ohio, that were also part of the RG Steel purchase from Severstal with the Sparrows Point mill.

The ratification is expected to be completed by the end of March, with maintenance and operations workers expected to be called back to work first at Sparrows Point.

RG Steel, a subsidiary of the Renco Group, a New York-based investment company with assets reportedly of $5 billion, is opening its headquarters at Sparrows Point. Quickly restarting the "L" blast furnace at Sparrows Point is likely one of the company's first priorities, according to steel market experts.

"It'll take about 35-45 days to start to being pulling iron out of it, once we get the go-ahead," Cirri said. "There's a lot of work that needs to be done to be up-and-running. It's been winterized and put in asset protection."

Severstal announced the idling of the "L" blast furnace in July. Other parts of the plant, the tin mill and cold rolling operation, have continued  to function, but at a lower capacity.

Cirri added that contrary to rumors, there has not been a lot of companies making serious bids for the three Severstal mills since they went onto the market this past fall.

"There were not multiple groups interested, that is simply not true," Cirri said.

The USW represents 1.2 million active and retired workers in North America in various industries, and in both the public and private sectors. Roughly 6,000 employees at the plants affected by the announced sale are represented by the USW, according to a USW press release.

The USW represents roughly 1,800 steelworkers at Sparrows Point, about 850 of whom are currently laid off.

We are driving the change that needs to take place company-wide to ensure these facilities remain viable for the long term,” USW District 1 director David McCall, who chairs the union’s negotiations with RG Steel, said in a press statement.

“This is about the future of our jobs and our communities,” McCall said, “and our collective success is in our own hands.”