A Steely No

The locals defy their leaders

No industry has suffered more in the current slump than steelmaking. Once the backbone of the nation's industrial might, steel firms have seen sales plunge to the lowest levels in 24 years while unemployment has leaped to an alarming 37% of the work force.

Though steel has been plagued over the years by everything from strong foreign competition to outmoded mills and plants, the industry's biggest headache remains exorbitant wages, which now average $23.40 per hr., including benefits. That makes unionized steelworkers the most highly paid blue-collar laborers in American industry.

Though industry executives and union leaders alike realize that high wages are hurting the industry, efforts to improve the situation have consistently failed. Last summer the 30-member executive board of the United Steelworkers of America took up the idea of a wage freeze to help stop mounting layoffs and return the industry to profitability. But the feisty leaders of the union's 600 local chapters rejected the proposal.

Last week U.S.W. President Lloyd McBride tried again, this time with an imaginative appeal not just for a wage freeze but for what would have amounted to an unprecedented pay and benefits cut of nearly 10% in the first year of a new multiyear contract. The deal would have required the U.S.W., in effect, to tear up its existing two-year-old contract, which does not formally expire until next August, and sign a new 45-month contract under which the steel companies would set up generous profit-sharing plans for U.S.W. members.

Once again, however, the U.S.W's local union chieftains said no. At week's end, after more than four hours of heated closed-door debate, they voted the plan down, 231 to 141. Said McBride afterward: "I am disappointed, obviously. I would have preferred a settlement. But the wisdom of the majority is what we go by. It was a judgment call."

For the foundering industry, the rejection could not have come at a worse time. Steel executives have been counting desperately on an economic recovery beginning next spring to help boost steel shipments and cut the industry's hemorrhaging losses. But even if demand for steel does improve, the companies could wind up losing if they have to negotiate a new contract with the U.S.W. as sales and profits are starting to recover. For both labor and management, the ultimate disaster would, of course, be a strike. It would open the door to a surge in foreign imports, bringing yet more anguish to the bleeding industry.

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