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Severstal and union agree to extend restructuring talks at Sparrows Point

by MARK REUTTER

Severstal North America and the United Steelworkers union agreed yesterday to extend the existing contract for another 120 days – officially to “engage in problem-solving … that will benefit our employees,” but in reality to hammer out job restructuring at Sparrows Point and other Severstal mills.

For the last eight months, the company and union have haggled over the company’s demand to restructure or terminate as many as 600 jobs at Sparrows Point.

Last week, union negotiators agreed to allow more Point workers to be assigned to “joint ventures,” or companies set up by Severstal and a third party at the mill.

Employees in joint ventures would retain the same wage and benefit package as Severstal employees. But once they retire or quit, the jobs could be eliminated or filled with replacement workers on a presumably lower wage scale.

With half the unionized workforce at Sparrows Point one to four years away from retirement, Severstal and its partners could expect to hire many replacement workers in the near future.

John Cirri, president of Sparrows Point Local 9477, told workers in an e-mail: “I believe that the way we have structured the JVs, your committee has fulfilled their objectives of providing our plant with a plan for a sustainable long-term future while protecting our current workforce and quality of work life.”

He said the local has agreed that two units – mobile equipment and ore handling – would come under joint ventures. Additional JVs will be negotiated when the union resumes its bargaining with the company as soon as next week.

Yesterday’s contract extension followed often-acrimonious talks capped by a “very positive” meeting late last week between Alexei Mordashov, CEO of Severstal, and USW Vice President Dave McCall.

According to Cirri, the Russian billionaire told McCall that he “wanted to build value to the company” and that restructuring Sparrows Point would be “part of the plan that will allow us to compete now and in the future.”

About 1,800 Sparrows Point employees have been working under a contract that expired in September 2008 and has been extended monthly.

Their counterparts at ArcelorMittal and U.S. Steel work under a new contract that included a cash bonus and better wage package.

Mark Reutter can be reached at reuttermark@yahoo.com

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