Heat Treat Industry News
May 19, 2010
Steelworkers to fight Severstal layoffs
WARREN - Twenty skilled trades workers at the Severstal Warren steel mill are scheduled to be laid off next week in a move the union president plans to quickly fight in arbitration.
Ed Machingo, president of 1,050-member United Steelworkers Local 1375, said Friday the company wants to bring in outside employees to do the machine repair work that contractually belongs to his members in central maintenance.
He said he'll go to expedited arbitration, which will put the issue before an arbitrator early next week.
Severstal spokeswoman Bette Kovach said the company won't publicly discuss employment levels.
The union and management are working under one of many extensions of the contract that expired Nov. 1, 2008. The extensions had been for one month, but the latest one is 120 days running through August.
Machingo said Severstal, Russia's largest steelmaker, is trying to ''create a fight. They're claiming surge work, but in reality they're creating the surge by holding back on repairs and breakdowns, then bringing them all in at once.
''They think bringing in outside contractors is the efficient way to go, but it's not. The efficient way is sticking to a very comprehensive maintenance schedule and using your own people,'' he said.
Machingo said outsourcing maintenance work is what's holding up a labor contract with the union at Severstal Warren, but he said it's only part of what the company wants to do in a new contract.
''I've been very quiet about it, but that's what we're negotiating. The company wants to eliminate jobs. They refuse to understand we're dealing with people's livelihoods,'' he said.
The union has 300-some skilled trades workers, he said.
Gary Steinbeck, director of the United Steelworkers subdistrict office in Niles, said some workers want to retire but are waiting to see if the union can get some retirement improvements.
''We're trying to do some enhancements,'' he said without elaborating. ''They could walk out with a certain comfort level knowing they have a collective bargaining agreement in place. Then the company will start calling back some laid-off people.''
About 800 union members have been recalled since Severstal restarted steel production in late March, but a couple hundred remain idled, Machingo said.
The dispute came as Severstal on Friday reported that its first-quarter loss widened to $785 million as it wrote down the value of an Italian unit it plans to sell.
The company lost $656 million in the same period a year earlier and $162 million in the fourth quarter. Although sales were up 34 percent from a year earlier to $3.1 billion, they dropped 7 percent from the previous quarter.
The loss includes a $855 million write-down on the value of an Italian unit, Lucchini SpA, that Severstal put up for sale.
Severstal said it continues to focus on more efficient production in its U.S. operations by using more if its capacity and cutting fixed costs.
The company said the restart of its Warren mill and Wheeling, W.Va., finishing operations ''will increase capacity utilization and should improve the profitability'' of the unit in the April-June second quarter.
It also said it expects the North America market to improve in the second quarter due to greater demand from steel users and low inventories at steel processors.
However, it said it also expects raw material prices to continue rising as global demand increases.
North America revenue climbed 10.5 percent to $1.17 billion from $1.06 billion in the fourth quarter, although average selling prices were slightly lower.
The unit posted an $83 million loss from operations, plus depreciation and other items, due to higher prices for iron ore pellets, scrap and coke, expenses from idling the mills, excessive operating and maintenance costs and the cost of restarting the Warren mill, the company said.
By LARRY RINGLER Tribune Chronicle
Source: http://www.tribtoday.com/page/content.detail/id/537276.html?nav=5003
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