FARRELL – With the NLMK Pennsylvania labor strike set to enter its fifth week Saturday, both sides have taken up what each describes as a final position.
Since the strike began on Aug. 22, NLMK salaried workers, who are not represented by the union, have been working on the company’s production floor. NLMK Pennsylvania President Bob Miller said the employees are completing orders already placed, but production capacity at the steel mill is lower than it was before the strike.
One of the key points of contention has been health insurance benefits. The company is offering two insurance options – a preferred-provider organization and a high-deductible insurance plan.
Under the high-deductible plan proposal, the company would deposit $2,350 into health savings accounts for each employee for the contract’s first first three years, and $1,550 in the fourth year. Miller said the company would provide enough money in the first year to cover all of the out-of-pocket expenses for employees who selected that option.
Todd Clary, a United Steelworkers union representative for Local 1016-03, has said that the union is concerned that the company would decrease, which is included in the proposed contract’s fourth year, or eliminate the health savings account contributions. USW Local 1016-03 represents about 450 union workers at the NLMK mill.
Miller said 44 employees, about 10 percent of the union membership, are enrolled in the high-deductible plan. Clary said the majority of NLMK employees do not want the high-deductible plan.
Under the PPO plan, employees have fewer out-of-pocket costs, but pay a premium of $185 a month. That figure would increase to $385 a month in the proposed contract’s final year.
Clary said the PPO plan increases would offset raises – 2.5% in the first year followed by 2% in each of the three remaining years – called for in NLMK’s contract offer.
“They’ve put it at a price that is unattainable for the worker,” he said.
Miller denied this claim.
Using figures provided by NLMK, the average employee would earn $59,905 a year in the final year of the proposed contract, which sets the current average salary at $55,073.
That average workers would earn $4,832 more at the end of the contract than they do now. Under the PPO plan, that same workers would pay $2,400 more a year for health insurance than they do now.
Clary said the company’s current offer is worse than a pre-strike offer that included raises of 3% in the first year and 2.5% in the three successive years, and a $3,000 per-employee signing bonus. He said the union agreed not to pursue any raises in the previous contract, negotiated in 2016, to help the company purchase a more efficient walking beam furnace to replace the current furnace.
“We were promised to be taken care of in this contract,” Clary said.
Miller denied that the 2016 no-raise contract had been tied to the replacement, and that the company is in the process of installing the walking beam furnace.
The new furnace was to have been part of a $600 million investment in the Farrell plant. Miller said that expenditure has been delayed because of the foreign-manufactured steel tariffs enacted in March 2018 by President Donald Trump.
NLMK Pennsylvania, which processes steel slab into steel coils, is a local subsidiary of Russia-based steelmaker NLMK. The Farrell plant had been buying much of its material from the parent company, which is subject to the tariffs. The company says it paid $167 million in tariffs in 2018 and 2019.
Clary said the company has been buying steel slabs produced in Brazil, which is not subject to the tariff packages. However, Miller said the Brazilian slabs aren’t that much cheaper because the South American manufacturers charge a premium because they know NLMK is a captive market.
“In essence, the increased costs and limited supply are in practicality the same as paying tariffs on Brazil slabs,” he said.