Union, AK Steel far apart on issues in negotiations
By Dave Greber
Staff Writer
Despite claims that negotiations between Middletown’s largest employer and its hourly work force were making progress, company officials said Friday the two parties are far apart on several important issues.
In response to AK Steel Corp.’s second quarter 2006 earnings report, Armco Employees Independent Federation/International Association of Machinists and Aerospace Workers’ president Brian Daley held a conference call that highlighted differences in how each side views the progress of contract talks.
“It’s full of inaccuracies, and frankly, it’s in contrast with AK Steel’s chief negotiator,” Daley said of the company’s response to the July 25 conference call.
Jim Tyler, spokesman for AEIF/IAM Local 1943, would not comment on specifics of the company’s latest claims, saying only the union was at the ready when it comes to resuming bargaining sessions.
“We’re just anxious to get back with the company and start off on a clear footing,” Tyler said, adding that the union plans on having a counterproposal to offer at the bargaining table.
Wages
The union said its wage proposal matches the company’s industry-standard wage scale of $15.91 to $21.75 per hour.
The company said the union failed to mention the proposed five wage increases during the life of the five-year contract — compared to the company’s three increases — which are tens of millions of dollars higher than AK Steel’s proposal.
Work force
The AEIF said they have requested the same job classifications that can be found at the company’s Ashland and Butler, Pa., facilities, and that AK was trying to “cram” 24 job zones into five new pay grades.
The company said the union’s proposals “do not provide the work force flexibility and restructuring needed for a competitive agreement.”
Company representatives said they have streamlined job classifications in all eight other AK Steel plants since 2003.
“It matters a lot where individuals are slotted from the old agreement to the new agreement,” said Alan McCoy, the company’s vice president of government and public relations.
McCoy said the conversation regarding work force and pay grades is “a time consuming process.”
Retiree health care cost sharing
The union has said that all retirees would contribute a premium amount in 2006 equal to 15 percent of the costs for pre-Medicare and 20 percent for Medicare-eligible retirees, and that AK Steel’s contribution would be capped.
AK Steel said the AEIF has refused to negotiate current retiree health care plans, and the company withdrew their proposal. Not until June did the union come back and ask the company to negotiate current retiree health care plans.
Pensions
The AEIF has said that its endorsement of the Machinists was to allow its members to have access to the international’s multi-employer pension plan.
AK Steel has said they presented its final proposal on retirement accounts through a company contribution to a 401(k) account in advance of the union’s endorsement of the Machinists.
“They knew at the time of the endorsement of the Machinists that we had made our final proposal on retirement accounts,” McCoy said.
Concessions
The union has said repeatedly they would be forced to make concessions of “more than $100 million” if the company took their proposal.
AK Steel said the union is basing its numbers on the prior contract, which takes into account more than 3,100 employees instead of applying the actual number of hourly workers, which has dwindled to 2,100.
Middletown Works is cost competitive
Consultants for the union say the company is “highly competitive” with the rest of the steel world even under the old wage structure.
Consultants for the company said Middletown Works ranks 147 out of 151 steel plants worldwide in the cost of steel per ton. Further, just four plants in the world had a higher per-ton cost of steel production than Middletown Works, one of which remains idle.
Contact this reporter at (513) 705-2840 or dgreber@coxohio.com.
Associated Press
WASHINGTON — Congress passed major pension legislation designed to assure American workers, including millions of baby boomers nearing the end of their working careers, that the pensions they have been promised will be there when they retire.
The Senate, in its last vote before adjourning for a four-week summer break, approved the 900-page bill that compels employers with defined-benefit pension plans to meet their funding obligations and seeks to prevent companies from terminating plans and shifting the financial burden to the taxpayer. The House passed the bill last week.
The 93-5 Senate vote late Thursday on the pension bill came shortly after the Senate fell four votes short of the 60 needed to advance a Republican-crafted package that combined an estate tax cut with a federal minimum wage increase.
Republican leaders, unsuccessful earlier this year in moving an estate tax cut through the Senate, tried to attract Democratic votes by linking it to a package of popular middle-class tax breaks and the offer to raise the minimum wage from $5.15 to $7.25 an hour over three years.
Democrats, backed by unions pushing for what would be the first increase in the minimum wage in nine years, overwhelmingly rejected the deal.
Votes on the pension bill and the estate tax package became possible after leaders from the two parties agreed to put off until September final action on a spending bill for the military.
During three days of debate, senators increased the size of the defense package to almost $469 billion with the addition of $13 billion to supplement the $50 billion for operations in Iraq and Afghanistan and $1.8 billion to build 370 miles of triple-layer fencing along the border with Mexico.
The pension bill now goes to President Bush for his expected signature and gives lawmakers returning to their states and districts a major achievement in an election-year session characterized more by partisan politics than legislative accomplishments.
“This bill is the most important action to safeguard the retirement of hardworking Americans in a generation,” Sen. Edward Kennedy, D-Mass., said.
The legislation affects some 44 million workers and retirees with defined-benefit pension plans, forcing employers with such plans to meet their full funding obligations within seven years. Currently a 90 percent funding level is deemed acceptable.
Companies that fall seriously behind in their contributions must follow an accelerated funding program and are prohibited from taking steps, such as promising new benefits, that could cause further deterioration in their financial status.
“Promises made will be promises kept by limiting when benefits may be increased,” said Sen. Mike Enzi, R-Wyo., chairman of the Senate Health, Education, Labor and Pensions Committee.
The bill was the result of years of debate and months of negotiations between House and Senate lawmakers trying to work out a formula that would force companies to meet their pension obligations without driving more companies toward terminating their plans and shifting benefit responsibility to the Pension Benefit Guaranty Corp.
The PBGC, the federal agency that insures pension plans, has accumulated a deficit of $22.8 billion, in part from taking over defunct steel and airline industry pensions. There is concern that a rash of future terminations could result in a multibillion-dollar taxpayer bailout.
The legislation carves out special treatment for the airline industry, giving airlines that are in bankruptcy court and have frozen their pension plans an extra 10 years above the seven years for other plans to become financially whole.
That would directly benefit Delta Air Lines and Northwest Airlines Corp., although two others with active defined-benefit plans, American Airlines and Continental Airlines Inc., would be eligible for the same break if they decided to freeze their plans. Otherwise they would get 10 years — the seven plus an extra three — to reach full funding after the new rules go fully into effect in 2008.
Northwest, in a statement, said the bill “will save the pension benefits of 73,000 current and former Northwest employees.”
“The winners are tens of thousands of employees in the airline industry, confronted within the next 30 to 60 days with the loss of up to 70 percent of their pensions with them going on the back of the PBGC,” said Sen. Johnny Isakson, R-Ga., a leading advocate of the airline provision. Delta is based in Georgia.
Critics of the legislation said that it does little to reverse the trend of employers dropping defined-benefit plans in favor of less secure defined-contribution plans such as 401(k)s.
“Except for the helpful relief for airlines and multiemployer plans, the new funding regime for most companies will inject more unpredictability into their pension financial obligations,” said James Klein, president of the American Benefits Council, which represents companies with defined-benefit plans.
But the bill also won praise for encouraging Americans, particularly young workers, to save for their retirements through such steps as allowing the automatic enrollment of workers into 401(k) plans.
The bill also:
Makes permanent provisions in a 2001 tax cut law that raised annual contribution limits for IRAs.
Ends the legal uncertainty surrounding cash balance pension plans, which have run into legal challenges from employees who have claimed that older workers lose out when employers switch from traditional defined-benefit plans.
Permits qualified financial firms that manage investment firms to offer face-to-face investment advice to help employees manage 401(k) and other retirement options.
The bill is H.R. 4
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