Benefits September 20, 2002

Steelworker Union Bands To Shore Up Retirement, Job Security

September 20, 2002 (PLANSPONSOR.com) - In the midst of a its most trying economic cycle ever, local leaders of the United Steelworkers of America are banding together to figure out new ways to save jobs - and worker retirement security.

Reported by

Nevin E. Adams

During the current crisis in the American steel industry, 35 steel companies have gone into bankruptcy, according to the USWA. Roughly half of those have liquidated, leaving more than 125,000 Steelworkers’ retirees without health care coverage.

Additionally, while the Pension Benefit Guarantee Corporation (PBGC), the nation’s pension insurer, guarantees that a percentage of workers’ pensions are paid when a company shuts down, the health care coverage of retirees is completely wiped out by liquidations and is not covered by the PBGC (See also The Hole in ERISA ).

Bargaining Base

Trying to stem the current tide, local leaders of the United Steelworkers of America’s (USWA’s) Basic Steel Industry Conference (BSIC) voted overwhelmingly Friday to launch a series of new bargaining initiatives designed to secure the living standards of their members and retirees while saving numerous steel companies struggling to recover from bankruptcy, according to a press release.

The BSIC, comprised of all local union presidents who represent workers throughout the nation’s steel industry, agreed to pursue a wide-range of innovations that the Union said will save jobs while giving its members a greater measure of job and retirement security, as well as a stronger voice in production practices and corporate governance.

Principle Posting

In order to achieve these goals, the BSIC policy statement states that the Union is “prepared to look at ways to more efficiently operate our plants, provided that it is done with fewer supervisors, protecting seniority, safely and with Steelworkers.”

The USWA also said it was willing to begin bargaining with financially distressed companies about more efficient ways of operating their plants, while establishing a set of principles for governing those negotiations.

Those principles include a company’s willingness to:

take necessary steps to restructure financially in order to invest in its facilities and meet its obligations
maintain existing levels of wages and benefits
provide medical care for existing retirees to the maximum extent possible
preserve defined benefit pension plans
make a commitment that union members will share in the company’s successes upon return to profitability.