By LEN BOSELOVIC
Pittsburgh Post-Gazette
13-JUN-06

Simmering resentment among U.S. Steel's workers over a landmark labor agreement that propelled the company to profitability has contributed to a shake-up among the plant-level leadership of the United Steelworkers union.

Seven out of the 12 presidents of the largest USW locals, the union's top plant-level representatives, either were ousted or chose not to run in elections this spring. Several of the incumbents who were re-elected have been among the most vocal in challenging U.S. Steel on how the 2003 labor agreement has been implemented.

USW officials caution against reading too much into the results. They attribute most of the turnover to local issues, personalities, retirements and other issues unrelated to the contract. However, discontent over the labor agreement _ ratified as part of U.S. Steel's $1.3 billion purchase of bankrupt National Steel _ was a factor in many contests, illustrating the difficulty domestic manufacturers face as they keep pushing workers to accept workplace changes they see as vital to survival in the global marketplace.

Anger over the new contract "was part of it, for sure," says William Gunnin, 56, newly elected president of USW Local 2122 at U.S. Steel's Fairfield (Ala.) Works. Gunnin, who's worked at the mill off and on for 24 years, defeated the incumbent. "There's been so much that's happened since the last contract that we need to try to rectify," he says.

Feelings run stronger at U.S. Steel plants, where workers had a year remaining on an existing contract when the new five-year contract for both U.S. Steel and former National steelworkers replaced it. Union and company officials agreed to put workers at both companies' plants under a new contract when U.S. Steel beat out rival AK Steel for National in 2003.

"We gave up a lot and we were told we wouldn't be giving up a lot to buy up National," says Steve Tunello, who was re-elected president of USW Local 1013 at the Alabama mill. "We tried to make sure our members knew this was the International (USW headquarters). They pushed this down on us."

The watershed labor pact was patterned after agreements negotiated at other bankrupt producers. The contracts were a key ingredient in the then-debilitated industry's restructuring that marked the early years of this decade. Among other things, they boosted productivity by giving steelmakers more flexibility in assigning workers to jobs.

At U.S. Steel, the five-year pact also coincided with a 20 percent reduction in the company's work force. Many of the company's most experienced union workers accepted early retirement incentives, leaving fewer, less experienced workers to deal with new job assignments just as the industry ramped up production to meet burgeoning demand.

The contract and revived economy were tonics for the industry. U.S. Steel, which declined to comment on the union elections, posted record profits of $1.1 billion in 2004 and earnings of $910 million last year. Union workers shared in the windfall. Each of them collected about $14,000 in profit sharing checks over the last two years.

"The one good thing that has come out of this contract is the profit sharing," says USW Local 1557 President Andy Miklos, 56, who represents workers at the Clairton Works. Other than that, "it's been a very challenging labor agreement," says Miklos, who beat back two challengers to win a second term.

He and other local presidents say reducing the work force has resulted in too much overtime. Yet it's not clear how much of a problem that is.

"People right now are working more hours than ever. Lots of people like that. Lots of people don't. If you took mandatory overtime out, lots of people would slash your throat," says Don Tribby, financial secretary for Local 1066 at the Gary (Ind.) Works. Grievances, one barometer of labor-management relations, are on the rise at some plants.

"We're so backlogged in arbitration that the problems we have today, we're going to be dealing with them in 2008 when we're at the table," says USW Local 1938 President Mike Woods, 35, whose local represents workers at the company's Minntac iron ore plant in Minnesota.

The new slate of local presidents will have some say in negotiating the next labor agreement. Those talks will highlight conflicts between the responsibilities of the USW's national leaders and those on the plant level, strains that reverberated in the recent local elections.

Many USW local presidents, particularly those at National plants whose jobs were preserved by the contract, agree changes were needed to put the industry on firmer footing. They credit USW President Leo Gerard, who brokered the labor agreement with steel producers, with saving thousands of jobs.

"The international union out of Pittsburgh ... did a very good job of securing our members' jobs at these plants," says Russ Saltsgaver, 48, president of Local 1899 at the Granite City (Ill.) Works, a former National plant near St. Louis.

However, Saltsgaver, who was unopposed in his re-election bid, and other local presidents say dealing with the nuts and bolts of the contract on a daily basis gives them another perspective.

"It was a big change in the culture and I always thought they (U.S. Steel) implemented it too fast," says Marc Barragan, 50, a third generation steelworker and newly elected president of USW Local 1299 at the Great Lakes Works, a former National plant near Detroit.

Taking Gerard's view to the plant floor is bound to create tension within the union, says Ray Friedman, who teaches employee and labor relations at Vanderbilt University. Similar conflict has characterized relations between the United Auto Workers and its plant-level leaders, he said.

"If people felt they weren't really listened to in the restructuring process, they may strike out at their local leaders even if local leaders couldn't do anything about it," he says. "Sometimes, the local needs to feel there's been a fair fight put up, even if it doesn't change the outcome."

Those stresses could make local union elections like those just held at U.S. Steel more contentious in the future.

"I think we're going to see increasing turmoil in unions at the local level in coming years," predicts Marick Masters, a University of Pittsburgh professor who specializes in labor issues.