Arbitration Ends Kaiser Labor Strife Steelworkers Survive - At Least Most Of Them Do

It’s finally over.

The bitter two-year labor dispute between Kaiser Aluminum Co. and the United Steelworkers of America ended Monday with a five-year contract forged by a neutral arbitrator in Washington, D.C.

Seymour Strongin ruled for Kaiser on four unresolved issues and for the union on the other two.

Both sides claimed victory Monday, but the settlement results in the permanent loss of at least 456 jobs in Spokane - 288 at Trentwood and 168 at Mead.

Streamlining the plants was necessary for the company’s long-term survival, Kaiser Chief Executive Officer and President Ray Milchovich said Monday from headquarters in Houston.

“I am grateful this dispute is over. Given the competitiveness in the marketplace, long term this will assure job security in Kaiser’s plants,” Milchovich said.

An additional uncertainty threatens Kaiser’s work force. Some 356 jobs - 130 at Kaiser’s Mead smelter and 226 at the idled Tacoma plant - are in limbo because of potline curtailments related to the high cost of electricity.

Within 35 days, Kaiser expects to recall workers to fill about 1,756 jobs at its plants in Washington, Ohio and Louisiana - down from nearly 2,900 jobs when the work stoppage began Sept. 30, 1998.

For the Steelworkers union, Monday’s settlement was the end game in a bruising fight for survival.

“I am very pleased that this long struggle has come to an end,” said David Foster of Minneapolis, the union’s lead negotiator.

“We defeated Kaiser’s lockout strategy. It was one of the most important battles the American labor movement has been through in the last 20 years,” Foster said.

Many of the details in the new contract were worked out in earlier talks. Arbitrator Strongin decided the remaining six issues.

The new contract provides an immediate $1.18-an-hour base wage increase for Steelworkers, a 2.6 percent average annual increase in wages and benefits - totaling $2.30 per hour over the five years - and a 30 percent increase in pension benefits.

In October, Steelworkers will begin returning to their jobs for the first time in more than 24 months.

Union workers who notify Kaiser they are available to return to work will be eligible immediately for “special assistance” payments from the company for up to 28 days.

“These payments will be paid weekly until we get everybody prepared for work,” Milchovich said.

Kaiser will pay $200 a week for the first two weeks, $300 for the third week and $500 in the fourth week following an employee’s availability date.

Monday, Kaiser announced it will take a one-time pretax charge of $30 million to $40 million in the third quarter of 2000 to reflect nonrecurring impacts of the labor settlement.

That cost will be largely offset by a $40 million gain associated with recent sales of electricity, Kaiser said.

The company’s previous strike-related tab was a $60 million charge taken in 1998.

The contract settlement does not resolve unfair labor practice charges the government filed against Kaiser June 30. If the National Labor Relations Board rules against Kaiser, the company may have to reimburse the Steelworkers up to $337 million in back pay.

The Steelworkers said Monday they are prepared to discuss settlement of the NLRB charges with Kaiser.

“We’ll either litigate that or the parties will bargain,” said Kaiser spokesman Scott Lamb.

Steelworkers gathered Monday at two local union halls as news of the contract settlement reached Spokane.

Some were elated by the news they are going back to work. Others were disappointed the union prevailed on only two of the six outstanding issues.

“I think there was some disappointment,” said Dan Russell, 54, a Mead crane operator and president of Local 329.

“Thinking back and observing the arbitration, I think we did a good job. I don’t think we could have done anything different,” he said.

“The number one reason I call this a victory is Kaiser had only one item on the agenda when this started and it was to break the union. And they didn’t get that done. We know what solidarity means today,” Russell said.

“Bittersweet. That’s a good way to describe it,” said Don Picicci, 52, who has worked 23 years in the rodding room at Mead.

“When it goes to arbitrations, you gotta take what you get. But the brothers stuck together, and Spokane stuck up for us,” he said.

His older brother Joe Picicci, 53, who siphons potlines of molten aluminum at Mead, agreed.

“I want to thank all the people in Spokane who supported us for two years,” he said. “We can hold our heads high. We were united as one. We’re still here and stronger.”

At Local 338 on East Trent, the copy machine was near meltdown as office workers struggled to keep up with demand for copies of the statement outlining the arbitrator’s ruling.

The local’s members will be the hardest hit by the contract’s terms, which call for the loss of 288 jobs at the plant where 1,100 worked before the strike began.

One who does not expect to go back, Jeff Adams, agreed with many others who said arbitration was a mistake.

“I think we pretty much got hosed,” he said. “It was two years for nothing.”

Adams, a heavy equipment operator, said he voted against the arbitration process. He has been working on area farms but with the harvest season ending, will have to find a construction job, or possibly move.

Gil Bagley said he will retire after 36 years with Kaiser. Until the walkout, he had operated the five-stand rolling mill, “the top job in the plant.”

He has been working part time at the Spokane Interstate Fairgrounds, a job he expects to stay with until he’s 65 years old.

Bagley also sold pro-union T-shirts - at cost - during the lockout to boost morale.

“There was a lot of misery out there,” he said.

Bagley said strike activities increased his political awareness.

He participated in demonstrations at Olympia during the last legislative session, and distributed leaflets in districts represented by those who opposed a union bid for extended unemployment benefits.

“I had no knowledge of lobbying or anything,” Bagley said. “I know now.”

He said he was surprised at the solidarity shown by union members, only a handful of whom crossed the picket lines before the strike became a lockout.

Bagley, a diabetic, said he also appreciated the benefits he received under Washington’s Basic Health Plan when union members lost their health insurance coverage.

Local President Wes Beck said he too was proud of the union workers’ solidarity, but not much else.

He said Trentwood produced record profits for Kaiser for two years prior to the strike, yet the company’s response was to cut jobs.

“That’s not right,” he said.

Beck was also unhappy with the Steelworkers’ international office, which had agreed to the arbitration.

“I believe they could have done better on the process,” he said, although he added that he appreciated the financial support the union provided to local members during the strike and lockout.

Financial Secretary Dan Sampson said arbitration had, at least, ended the confrontation between the union and the company.

“They would take and take and take and take,” he said of Kaiser. “We were successful in saving the union and saving the union jobs.”

Sampson, with 23 years at Trentwood, does not expect to be recalled immediately.

He said restoring a good relationship between the union and Kaiser would take two years.

Many of the supervisors in the plant are replacement workers who will have to adjust to union rules, just as the Steelworkers will have to become familiar with new ways of working with many of their former co-workers. Compliance with safety and environmental standards will be paramount, he said.

The labor dispute began when the Steelworkers rejected a company contract offer. Some 2,900 workers at five Kaiser plants left their jobs at plants in Mead, Trentwood, Tacoma, Newark, Ohio, and Gramercy, La.

The strike became a lockout on Jan. 14, 1999, when the company refused the union’s offer to return to work under the old contract until a new one could be negotiated.

In July, the Steelworkers voted to enter into binding arbitration by a margin of 1,681-601.

The two sides had already agreed on issues such as contracting out work and removing Kaiser’s proposed cost cap on retiree benefits.

But by a final round of negotiations that began in late July, some 12 issues were unresolved, including wages, pensions and return-to-work protocols.

In early August, the two sides further narrowed their differences, agreeing not to discuss them publicly.

Strongin, an experienced labor negotiator, headed the arbitration panel.

In the “baseball style” arbitration, Strongin could choose either the company’s final position or the union’s on each unresolved issue.

The company and the union exchanged final contract offers on Aug. 17 - the first step in the arbitration process. The panel’s binding arbitration sessions concluded Aug. 24 in Chicago.

Replacement workers will get a month’s worth of health benefits, but no severance pay, said one such worker at Kaiser’s Trentwood plant.

“I’m glad to be leaving,” he said Monday.

Graphic: Major issues in the Kaiser dispute

Staff writer Tracy Ellig contributed to this report.