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Steelworkers union could block sale of Granite City plant — keeping 1,000 jobs

A U. S. Steel worker inspects equipment after emptying a pot of liquid steel.
Derik Holtmann
Belleville News-Democrat
A U.S. Steel employee at Granite City Works inspects equipment after emptying a pot of liquid steel in June 2018.

GRANITE CITY — A proposed sale that would likely cut nearly 1,000 jobs from the Granite City Works steel mill could be blocked by the steelworkers union, according to the local's president.

Dan Simmons, president of the United Steelworkers Local 1899, said that without union approval, the deal to sell two blast furnaces to SunCoke Energy won’t happen.

“We do have that leverage to have those kinds of conversations,” he said in a recent interview.

That comes from the successorship clause in the union’s contract with U.S. Steel. And right now, the deal doesn’t make business sense for the employees, Simmons said.

The language also guarantees that if the deal proceeds, the union will have a seat at the negotiating table.

U.S. Steel's Granite City plant sprawls across 1,500 acres — a Metro-East landmark .
Carolina Hidalgo
St. Louis Public Radio
U.S. Steel's Granite City plant is a Metro East landmark that sprawls across 1,500 acres.

Repurposing the plant

The sale announced last summer could eliminate jobs as Pittsburgh-based U.S. Steel indicated plans to sell the Granite City Works furnaces to SunCoke, a raw materials processing company that has a footprint in Granite City adjacent to the steel mill.

SunCoke offered to repurpose the current furnaces to create a pig iron production facility. That pig iron, which is a crude material, would then be used for electric arc furnaces.

The new electric furnaces rely on scrap steel. While they are cheaper for companies to operate thanks to the scrap, the electric furnaces don’t produce as high a grade of steel as blast furnaces do.

Electric arc furnaces reflect the direction the industry is headed, Simmons said.

The sale to SunCoke would have left 550 jobs remaining at the Granite City Works location, a U.S. Steel spokesperson said.

But union officials have told U.S. Steel they would not sign off on the deal.

“We continue to focus on reaching a definitive agreement and have no further updates at this time,” Amanda Malkowski, a spokeswoman for U.S. Steel, said in a statement this week.

Shantanu Agrawal, SunCoke's vice president of finance, echoed U.S. Steel's position.

"We continue to work towards signing a definitive agreement," he said.

Simmons and other union members said they proposed an alternative because the core idea behind the blast furnace deal has benefits for the mill’s workers.

If U.S. Steel has the ability to convert those furnaces themselves, why not pursue it, Simmons asks.

“There isn't a good common sense, business sense reason to hire a third party,” he said.

Asked if U.S. Steel would consider converting its own furnaces, Malkowski said the company would “continue to analyze the current footprint to best serve our customers and create value for them while also working to advance our long-term strategy, achieve our sustainability commitments, enhance our capabilities and improve our through-cycle performance.”

While Simmons and others will continue to try to prevent job losses, he said the future of the plant remains unclear.

“I'm not naïve to think that they probably won't continue to try to make a run at this and try to do what they can,” Simmons said. “I hope that they come to their senses.”

Dan Simmons, president of United Steelworkers Local 1899, at a “fire up” party last week to celebrate 500 people going back to work. June 2, 2018
Carolina Hidalgo
St. Louis Public Radio
Dan Simmons, president of United Steelworkers Local 1899, at a “fire up” party in 2018 to celebrate 500 people going back to work.

New nationwide contract includes pay raises

Since the pandemic began, U.S. Steel’s business has done well. During March 2020, the stock price traded at $5 per share. On Thursday afternoon, it sold at more than $28 per share.

That success will also be felt by its employees with a new four-year nationwide contract agreement.

The bargaining started in July and ran well past its expiration date. The new deal, which U.S. Steel announced Dec. 20, will run from Sept. 1, 2022, to Sept. 1, 2026. The agreement passed across U.S. Steel’s unions with 92% voting in favor, Simmons said.

“We are pleased to have reached these agreements with our USW-represented employees,” said David Burritt, president and chief executive of U.S. Steel, in a statement released Dec. 20. “The new agreements balance the needs of our employees, customers, stockholders, and other stakeholders.”

Simmons said: “It's a good contract. It's the best contract I probably bargained for in the 20 years I've been doing this.”

The deal includes a more than 21% total raise for employees over the next four years, Simmons said. The agreement will also maintain their health care benefits and improve employee pensions.

“All in all," Simmons said, "if you can hit those three bullet points to start with — increase in wages, keep or improve your health benefits and add a little bit on the pension side — it's always a good start, right?”

Will Bauer is the Metro East reporter at St. Louis Public Radio.