Your bargaining committee met this morning with U.S. Steel, and it is becoming clear that the company has been surprised by the level of anger and solidarity you’ve displayed.
While of course they would never admit that, they modified their proposal and then within minutes posted it on their website while the union was still reviewing it internally. You undoubtedly understand their play for what it is - another clumsy and bad-faith attempt to try to influence everyone’s first impression and undermine your bargaining committee.
It’s another big attention-grabbing headline with a $19,000 figure at the top. Once again, the devil is in the details, and their proposal requires a close reading and thoughtful analysis.
No New Money/Worse Health Care Coverage
First, the proposal includes the original $4,000 signing bonus. U.S. Steel then adds the $6,000 of your 3rd- and 4th-quarter profit sharing payments, this time sliding forward payment. As you have figured, you have already earned these payments, although U.S. Steel would have you believe that it’s a gift of new money. That brings the total back to $10,000. They then try to intimidate and stampede you to accept their deal by including an unrealistic self-imposed deadline of ratification by Sept. 22.
To determine how they get to $19,000, you have to understand their health care options. In trying to drive people to the “high deductible health care” (HDHC) proposal and get rid of your current health care, they essentially offer a bribe of $1,500 per year for the transition. So $1,500 per year over a six-year agreement is $9,000. ($1,500 x 6=$9,000). The only problem with this is that you have to give up your current health care coverage and move to the HDHC plan.
So, according to U.S. Steel’s math, a $4,000 signing bonus + $6,000 of your own profit share money + $9000 from giving up your health care = $19,000. Pretty slick, huh?
Here’s their next slick trick: The health care plan that you now have is gone entirely under their proposal. It’s just not being offered. Their replacement plan doubles the deductibles, coinsurance and out-of-pocket maximums compared to the current PPO Plan.
Remember their last proposal had you paying up to $237 per month for medical and dental coverage. They have now reduced that to $125 per month for medical and $20 per month for dental. They also say that at the end of the year they’ll reimburse you $125 per month to offset the premiums that you’ll now be paying. First, the reimbursement will be treated as income, and you can expect about a 35% reduction due to taxes and deductions. Secondly, your coverage is decreased, so you will pay an average of another $2,000 per year in out-of-pocket expenses for higher deductibles, drug copays and coinsurance. So, every time you use the coverage, you’ll be paying more and they will try to pass all this off as costs covered by the end-of-year reimbursement.
Sleight of Hand with Wages
Finally, let’s look at their wage proposal. In the prior proposal, they offered a six-year agreement with annual increases of 4%, 3%, 3% in the first three years and then increases of 1%, 1%, 1%, combined with their EBITDA-based variable pay scheme.
This morning they proposed the same six-year term with and dropped their variable bonus scheme, proposing wage annual increases at: 4%, 2%, 2%, 2%, 2%, and 2%. So they took the 1% from the previously proposed increases in years 2 and 3 and slid it back to years 4 and 5 and then seemingly added another 1% to their last offer. It’s important though to understand the time-value of money and realize that they’ll save money by keeping the 1% longer before it goes into our paychecks. After sorting everything out, we believe this is essentially the same or even a less costly wage proposal to them. These are the sleight-of-hand tactics we’ve seen too many times before.
USW Developing Counter Proposal
The USW will make a counter proposal which, among other issues, will include real wage increases, a reasonable term of the contract, leave our benefits alone, fix our pension issues and solve some of the problems caused by this blatant and bad-faith attempt to try to break this union. Stay strong and united and we’ll stay in touch through your local leadership and CAT teams