President’s Page

 President Dan Simmons

The Local Update

“Timely News and Information from the Plant”

United States Steel Corporation Reports 2010 Second Quarter Results

• Net loss of $25 million, or $0.17 per diluted share, including $96 million, or $0.62 per diluted share, net foreign currency remeasurement losses on intercompany loans

• Income from operations of $198 million, significant improvement from first quarter 2010, all three reportable operating segments profitable

• Shipments of 5.9 million tons, an increase of 9 percent from first quarter 2010

• Net sales of $4.7 billion, an increase of 20 percent from first quarter 2010

• Operating results, net sales and shipments reflect a sharp turnaround from the second quarter of 2009

• Maintained strong liquidity position with $947 million of cash and $2.5 billion of total liquidity

 United States Steel Corporation (NYSE: X) reported a second quarter 2010 net loss of $25 million, or $0.17 per diluted share.  These results reflect a considerable improvement over the net losses of $157 million, or $1.10 per diluted share, in the first quarter of 2010 and $392 million, or $2.92 per diluted share, in the second quarter of 2009.

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                                  Earnings Highlights
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    (Dollars in millions except per share data)   2Q 2010   1Q 2010   2Q 2009
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    Net sales                                      $4,681    $3,896    $2,127
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    Segment income (loss) from operations
        Flat-rolled                                   $98      $(80)    $(362)
        U. S. Steel Europe                             19        12       (53)
        Tubular                                        96        45       (88)
        Other Businesses                               28        10        (7)
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    Total segment income (loss) from operations      $241      $(13)    $(510)
    Retiree benefit expenses                          (43)      (44)      (34)
    Other items not allocated to segments               -         -        79
    --------------------------------------------------------------------------
    Income (loss) from operations                    $198      $(57)    $(465)
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    Net interest and other financial costs            150       108         9
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    Income tax provision (benefit)                     72        (7)      (82)
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    Net income (loss) attributable to
     noncontrolling interests                           1        (1)        -
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    Net loss attributable to
     United States Steel Corporation                 $(25)    $(157)    $(392)
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     - Per basic share                             $(0.17)   $(1.10)   $(2.92)
     - Per diluted share                           $(0.17)   $(1.10)   $(2.92)
    --------------------------------------------------------------------------
    -------------------------------------------------------------------------------------------------------------------

Commenting on results, U. S. Steel Chairman and CEO John P. Surma said, "Operating results improved significantly from the first quarter of 2010.  Sequentially, the most notable improvement was in our Flat-rolled segment, which benefitted from increased average realized prices and healthy order rates in most of our markets.  In Europe, we had our second consecutive profitable quarter, and our Tubular segment income from operations more than doubled as compared to the first quarter of 2010."

Outlook:

Commenting on U. S. Steel's outlook for the third quarter, Surma said, "We expect to report an overall operating profit in the third quarter as the U.S. and European economies continue to work their way through a gradual and uneven recovery process.  Operating results are expected to be below the second quarter largely due to a decrease in shipping and production volumes for our Flat-rolled segment, reflecting slower order rates, primarily from spot market customers thus far in the quarter, which likely includes some normal seasonal variations and the impact of shorter lead times; however, reported carbon flat-rolled inventory levels on a months-of-supply basis at North American service centers remain below historical averages and end user demand appears stable.  Similar market conditions prevail for our European operations."

Third quarter 2010 results for Flat-rolled are expected to be near break-even levels due to lower trade and intersegment shipments and production volumes, and increased costs for raw materials and energy.  The favorable effect due to the absence of Lake Erie Works repair and maintenance costs is expected to be offset by increased costs related primarily to planned maintenance work on several blast furnaces and repairs of the transportation system used to deliver raw materials to Gary Works' blast furnaces.  We expect average realized prices for the third quarter to be in line with the second quarter as the benefits of a higher value-added mix of shipments and increased prices for both index-based contracts and recently negotiated contracts offset decreases in spot market prices.

Profit Sharing:

Income from Operations of $198M will result in a Profit Sharing payout for members but as of this posting the amount has not been released.  Members will be notified as to the amount of the contractually negotiated benefit as soon as it's received.. 

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ARBITRATION AWARD – HAIR FOLICLE DRUG TESTING 

 July 23, 2010

Yesterday we received the long awaited arbitration decision on Local 68's grievance filed in protest of U. S. Steel using hair follicle testing as part of a drug screen for return to work physicals after layoff of more than 90 days. The Board of Arbitration denied the grievance.

Going forward, those members who are on Last Chance Agreements (LCAs) will need to continue to fulfill their obligations as per the agreement. Members who have questions concerning the decision or who would like a copy of the arbitration award can stop by any of the Local Union offices.  It should be noted while the Union disagrees with U. S. Steel's position concerning hair testing following lay offs greater than 90 days, the Union strongly supports ensuring a drug and alcohol free workplace.  Thank you.

 

USS to Announce 2nd Quarter Results

USS is to announce their 2nd Quarter financial results Tuesday, July 27th.  It is expected the company will post a profit resulting in a Profit Sharing payout for members.  At this time there is only speculation as to what the Profit Sharing payment will be.  We will announce information as soon as we receive it.

Labor Agreement Reached at Stein Steel

Local 1899 and Stein Steel Mill Services have reached a new labor agreement.  Bargaining for a new contract began in early May with a tentative agreement being reached in June.  The membership voted overwhelming to accept the agreement  June 29th.  The agreement contained no concessions with improvements across the board.

USW Sun Coke Organizing Campaign Successful

61% of Employees at the new Sun Coke facility voted Wednesday to join the United Steelworkers, bringing a successful conclusion to the 9 month organizing campaign waged by USW Local 50.

Gateway Energy and Coke Co. (GECC) which has over 100 employees – 84 of which will be represented – has been non-union since production began in February of this year. The Laborers Union had attempted to organize the plant as well.  The company has two other plants; Sun Coke – Indiana Harbor, located in East Chicago and Sun Coke – Haverhill, in Franklin Furnace, Ohio.  Both locations are represented by the USW. 

Some of the rights and benefits that the two other Union plants enjoy which were certainly persuasive in Granite City Sun Coke workers electing to be Union were:

•  Wage Increases – Currently GECC decides who, when and how much

• Incentive Pay Program – Currently there is none at GECC

• 100% Co. Paid Medical Insurance – Not after Jan.1, 2011 at GECC

• Contract vs. “Handbook” – GECC employees are At-Will Employees now

• Right to Representation During Discipline – No such right currently

• Grievance Process with Arbitration – No such right currently

• Discharge – GECC decision is final; no appeal currently

• Supervisors Working – No restrictions at GECC now

• Contracting Out of Work _ No restrictions at GECC now

• Right to Refuse Unsafe Work – Unknown at this time at GECC

  – Congratulations and welcome to our fellow Steelworkers!

Local Signs "56/60" MBFML Agreement

The locals at GCW signed a Canvassing Memorandum of Understanding  for 56/60 hour overtime opportunities for Maintenance Technicians.  This agreement is part of the MBFML (Maintenance Base Force Manning Level) language that was negotiated in the current contract. The overtime opportunities consist of an offer of  20 hours in production areas and 16 hours for shops areas.  To be eligible for this overtime, you must sign a solicitation form indicating the number of  hours you wish to work as well as the department. You have to indicate your preference 10 days prior to the schedule week.  Once an Employee signs the form they are committed to working the number of hours they have indicated.  The Company will post the available turns the week prior to the posting of the final schedule.  At that time members will be able to preference the turns that they want to work per the normal agreed to overtime practices.  Members will be expected to work the turns that they sign up for and failure to do so without an excused absence can be treated the same as missing a regularly scheduled work day.  Members should keep this in mind when volunteering for MBFML overtime. 

There remains two matters of disagreement between USS and the Union; both locally and at the International level regarding the MBFML language.  We have made sure that entering into this agreement does not in any way impact or prejudice our position on both of the outstanding issues.  Those issues are:

• The Union believes the Company is obligated by the MBFML to offer 16 hours of work within the shops for shop work to be performed by shops Employees.  The Company disagrees with this position and feels its obligation is not restricted to the shops only and it can offer overtime outside of the shops to satisfy the 16 hour commitment.

• Secondly, The Union’s position is that the terms of the MBFML are not predicated on whether there are contractors in the plant; we feel the agreement’s intent is that the Company must offer the prescribed overtime regardless. The Company thinks their obligation goes away if there are no contractors in-plant.

The issue regarding whether contractor’s  presence impacts the agreement could be resolved with the hearing of the arbitration case (or presentation of briefs) from Gary Works brought by Local 1066.  We have decided however to move forward on the 56/60 overtime canvassing where the Parties are in agreement so that our members are afforded the opportunities if they want to work. 

I have held, and will continue to hold, in-plant informational discussions regarding the agreement.  I want to hear your questions and comments.  The bottom line is this:  EITHER PARTY CAN TERMINATE THE AGREEMENT WITH A 30 DAY NOTICE.  If the membership doesn't want the agreement - I want to know and I'll represent your position.

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Please Watch Out for New Members in the Plant

We were all there once; that is new hires in the mill, and it can be pretty intimidating.  Steelworkers are known for watching out for each other and that’s especially true for new members.  During the ½ day Union Orientation Program we tell new members that their fellow Brothers and Sisters are eager to help them and to make sure they stay safe.  So please do your part when you see a new Steelworker in your department.  New employees are designated by a green stripe on their orange hard hats.

Company Releases so-called Attendance Rules

The Locals have received a copy of Management’s so-called “Absenteeism Principles and Rules” for Granite City Works.  The contract calls for the Company to develop and make known to its employees “reasonable rules” regarding absenteeism which will in no way deprive any employee of any rights otherwise provided by the Basic Labor Agreement and that these rules be “reasonably applied”.  The key here obviously is reasonableness. Therein will be the test of their rules, as will be the extent and means the Company takes to make these new rules known.  If and when their so-called rules and principles become a grievable  issue, members may be asked to sign Grievance Complaint Information forms.

 

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To Apply for Employment at USS:

Click Link Below:

 

 www.ussteel.appone.com

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SUB Pay Issue Ready for Hearing

The parties have reached mutual agreement regarding the facts of the case concerning the original SUB pay issue which some members experienced when the first layoff occurred last year. This will allow the parties to now proceed to resolve the case per the hearing of briefs (as it is a contractual language interpretation dispute).  You will remember the Local grieved the issue of the Company paying everyone SUB benefits at Box 1 rate of pay when they were laid off in 2008 regardless of which box they were working at the time of lay off.  The Company’s position was that they “reduced” everybody to Box 1 and then laid them off, which the Local disputed.  Now that the parties have reached agreement in how the case will be heard, briefs will be prepared and submitted to resolve the issue. 

  

Last Chance Agreement Issue Resolved

The International has recently cleared up the issue regarding language that the Company inserts in Last Chance Agreements (LCAs) entered into following the 2008 contract. Language was added in bargaining that specified that no longer would any and all discipline an employee received while on an LCA constitute a violation of the terms of the LCA.    Prior to bargaining, that was not the case.  Now, only citable discipline within an employee’s work history, agreed to by the parties, can be used. Going forward, LCAs will have the provision which the Company relied on referencing all discipline, removed and any LCA signed by an employee after September 2008 to date will be amended by letter from the Company so as to be in compliance with the new guidelines.

Company's SUB Pay Policy Finally Determined

The Company has informed the Local of their position, which they had been reevaluating, regarding whether SUB pay benefits start over at their original duration of weeks and level for each instance of layoff.  The Local and International’s position is that each time a member is laid off, their SUB pay restarts at the initial  benefit percentage and  weekly duration.  The Company informed the Local today that SUB benefits weeks are a finite number for the life of the contract  and an employee does not start over at the original weekly duration level each time they are laid off.  The Local is planning to grieve the matter.

International NEWS from your  Local President:

 

Durbin Urges Steelworkers and Honeywell to Quickly Settle Labor Dispute

– District 7

Assistant Senate Majority Leader Dick Durbin (D-IL) today (7/7/10) urged the United Steelworkers and Honeywell to quickly reach a settlement on their ongoing contract dispute which has left 220 workers locked out Honeywell’s Metropolis, Illinois plant. In a letter to Leo Gerard, President of United Steelworkers and David Cote, CEO of Honeywell International, Durbin acknowledged the shared goal of getting all of the locked out employees back to work and for Honeywell to resume normal production. The steelworkers have been locked out of work … more

Members of Local 7-669 employed by Honeywell Corporation at Metropolis, Illinois locked out

The members of Local 7-669 employed by Honeywell Corporation at Metropolis, Illinois were locked out Monday night, June 21st at 6:30 p.m.  The contract expired a week previously.  The Union was prepared to continue working under an extension of the contract, but the Company locked out the brothers and sisters of Local 7-669 and brought in professional strikebreakers from Shaw Corporation, a company that specializes in providing maintenance workers at nuclear facilities.
 
The members of Local 7-669 are united and standing firm in the face of the Company’s attack to bust their Union.  The USW is preparing a legal and public relations response to the Company’s action as it stands ready to continue negotiations for a fair contract.
 
More information will be forthcoming.

4-year labor agreement between Steelworkers and Alcoa Reached;

District 7 Director Jim Robinson served as chief negotiator

Pittsburgh - A new 4-year labor agreement between the United Steelworkers (USW) union and Alcoa covering some 6,000 workers at 11 U.S. locations has been ratified in a secret ballot vote by the membership.   

The agreement provides for lump sum bonuses of $2,250 this year, $1,750 next year; general wage increases of 2.5% in each of the following two years; and a $2 per month per year of service increase in the pension multiplier.

During negotiations, Alcoa proposed a series of changes in health care benefits which would have dramatically shifted costs to employees through reduced coverage and higher employee premium amounts. Although the proposal was designed to appear to offer greater individual choice, in reality each of the options offered only poorer coverage and higher costs. 

“Our members were adamant in the need for a single plan which provided everyone with access to high quality health care and protection against catastrophic medical bills,” said USW District 7 Director Jim Robinson, who served as chief negotiator for the union.  “The new contract does raise employee premiums, but they will still be much less than paid by Alcoa salaried and non-union employees.”

“Alcoa was not only insisting on implementing a plan that would have required our members to pay much higher costs for a lower level of coverage, but Alcoa also wanted the right to set future costs and coverage at whatever levels the company deemed appropriate,” he said.

“Our membership understood what was at stake and stood in solidarity with us,” Robinson said.  “The company understood that and it’s the reason why we will continue to have excellent health care that is affordable for our families.”

Other important issues important to the union were the preservation of long-standing seniority practices and the rejection of a two-tier pay and benefit proposal that would have been divisive to union members in the workplace.

The agreement is retroactive to June 1 and expires on May 15, 2014.

The USW is the largest industrial union in North America and has 850,000 members in the U.S., Canada, and the Caribbean. It represents workers employed in metals, rubber, chemicals, paper, oil refining, atomic energy and the service sector

New Five-Year Study Shows Employers’ Anti-Union Behavior Intensifies

Rise in Firings, Intimidation Show Need for Employee Free Choice Act

A new study by renowned labor expert and Cornell University professor Kate Bronfenbrenner reveals that private sector employer opposition to workers’ efforts to form unions has intensified and become more punitive than in the past. Employers are more than twice as likely to use 10 or more tactics – including threats of and actual firings – in their campaigns to thwart workers’ organizing efforts. Today’s anti-union activities include a greater focus than in the past on more coercive and punitive tactics designed to intensely monitor and punish union activity.

In No Holds Barred: The Intensification of Employer Opposition to Organizing, published by the American Rights at Work Education Fund and the Economic Policy Institute, Bronfenbrenner provides a comprehensive, independent analysis of employer behavior in union representation elections supervised by the National Labor Relations Board (NLRB). The report also compares employer behavior data in the study’s time period (1999-2003) to previous studies conducted by Bronfenbrenner’s research teams over the last 20 years.

For the vast majority of workers who want unions today but do not have them, the right to organize and bargain collectively—free from coercion, intimidation, and retaliation—is at best a promise indefinitely deferred. According to Bronfenbrenner, in NLRB election campaigns, it is standard practice for workers to be subjected by corporations to threats, interrogation, harassment, surveillance, and retaliation for union activity. From the 1999-2003 data:

• 63%  interrogate workers in one-on-one meetings with their supervisors about support for the union
• 54%  threaten workers in such meetings
• 57%  threaten to close the worksite
• 47%  threaten to cut wages and benefits
• 34%  fire workers

Even when workers succeed at forming a union, 52 percent are still without a contract a year after they win the election, and 37 percent remain without a contract two years after the election. 

At a briefing today to unveil the results, Angel Warner, a worker with Rite Aid in California trying to form a union and get a contract with the International Longshore and Warehouse Union said: “We wanted to form a union so we would be treated with dignity and could speak up without fear of losing our jobs. Now we finally got through the harassment to form a union and we still don't have a contract. It shouldn't be like this. If my coworkers and I want a union, we should have one."

Bronfenbrenner’s study documents the increased use by employers of more punitive tactics such as plant closing threats and actual plant closings, discharges, harassment, disciplinary actions, surveillance, and alteration of benefits and working conditions. At the same time, employers are less likely to offer “carrots,” such as unscheduled raises, positive personnel changes, bribes, special favors, social events, promises of improvement, and employee involvement programs.

Private sector campaigns differ markedly from public sector ones, where 37 percent of workers belong to unions. Survey data from the public sector describe an atmosphere in which workers may organize relatively free from the kind of coercion, intimidation, and retaliation that so taints the election process in the private sector. Most of the states in the public sector sample have laws allowing workers to choose a union through the majority sign-up process.

According to the report, the failure of the current system to defend workers’ rights in a timely manner multiplies the obstacles workers face when seeking union representation, adding further delays that favor employers over workers. Bronfenbrenner finds that employers appeal a high percentage of the cases and in the most egregious cases the employer can count on a final decision being delayed by three to five years. 

Of the few cases in the representative sample studied where a penalty was imposed, the heaviest penalty an employer had to pay was backpay, minus the worker’s interim wages.

Why Workers Need the Freedom to Form Unions and Bargain

Joining together in a union to bargain for health care, pensions, fair wages and better working conditions is the best opportunity working people have to get ahead.

Today, good jobs are vanishing and health care coverage and retirement security are slipping out of reach. Only 38 percent of the public says their families are getting ahead financially and less than a quarter believes the next generation will be better off.

But workers who belong to unions earn 28 percent more than nonunion workers. They are 52 percent more likely to have employer-provided health coverage and nearly three times more likely to have guaranteed pensions.

All workers should have the freedom to decide for themselves whether to form unions to bargain for a better life.