Expect more sad tales if mill isn't running by fall, warns steelworkers union official
This article first appeared in the St. Louis Beacon, April 30, 2009 - The day after U.S. Steel announced worse-than-expected first-quarter losses, Russ Saltsgaver, 51, was in a third-floor office at the Tri-Cities Labor Temple in Granite City, giving one of his last media interviews as president of United Steelworkers Local 1899.
Union members last week elected a new leader; Dan Simmons takes office in May.
In normal times, Saltsgaver would be returning to his job at the Granite City Works, where he was first hired in 1978. But these aren't normal times. About 2,000 workers have been laid off from the now-idled mill in a fast-moving wave of cuts that started in November.
So, on May 11, Saltsgaver -- a third-generation Granite City steelworker -- will be filing for unemployment and waiting for the plant to reopen.
He acknowledges that losing the election was bittersweet.
"I appreciated serving the membership,'' Saltsgaver said Wednesday. "It was an honor. But it's a time in my life when maybe I need to spend more time with my family and do some of the things I missed out on doing in the last several years. I lost an election, but I think in the long term it may be a big stress reliever for me.''
No one would disagree that these are stressful times for the industry. U.S. Steel announced a first-quarter net loss of $439 million, about double what analysts had predicted. The Pittsburgh-based steelmaker acquired the Granite City plant in 2003 from the bankrupt National Steel Corp. On Tuesday, the company's CEO declined to give shareholders a date for the reopening of the Granite City plant.
Saltsgaver said some members called after hearing the reports.
"People have questions. And there's a lot of high anxiety out there,'' he said. "People want to come back to work. We have a very good, well-educated workforce that's highly skilled, and we make some of the best steel in the world here in Granite City. Our members of local 1899 just want to get back to work.''
In the meantime, the clock is ticking on their unemployment benefits.
Steelworkers with fewer than 10 years' experience will lose their health insurance at the end of June. If layoffs continue through year's end, these workers will also lose supplemental pay -- about $250 week -- that they receive in addition to unemployment insurance. About 70 workers with less than three years' experience received no supplemental pay or health insurance when they were let go in the first round of layoffs.
Between unemployment insurance and supplemental pay, most laid-off workers are collecting about half of their normal base pay, which ranges from $17.30 to $23.40 an hour, without incentive bonuses, Saltsgaver said.
"People are making it right now; they're getting by. They cut out a lot of their spending. They're not eating out. They're not buying anything new. They're paying their bills. They're surviving. Our members are surviving,'' he said. "If this mill isn't up and running this summer or fall, there are going to be a lot more stories that are going to be very sad to report to the public concerning Granite City Works and its employees."
Here are excerpts from the Beacon's interview with Saltsgaver:
What is your reaction to reports that U.S. Steel CEO John Surma did not give shareholders a date for the reopening of the Granite City plant?
Saltsgaver: Mr. Surma gave the answer I expected him to give: that no one knows exactly when the steel industry is going to pick up. There are a lot of different variables out there that we have to look at. One, being the new coke facility. And we've got a new co-gen facility that will be completed in June that will supply 100 percent of the power we need here, which will be roughly a $5 million to $6 million dollar a month savings for this facility and will make us even more productive than we have been. The power savings will be huge ... we have to save money, cut costs as much as we can.
Everything hinges on the market. Everything is market-driven. So, right now that's not a very good outlook. People are still sitting on inventories, and we're hoping those dry up sooner rather than later.
In light of the fact that U.S. Steel had record profits in 2008, did the layoffs and idling of the Granite City plant surprise you?
Saltsgaver: The economic downturn was so quick it did catch us by surprise. We know that this industry runs in cycles. We're prepared to deal with that. But we were not prepared to deal with this economy just basically falling off the edge of a cliff.
Granite City steelworkers have drawn national and international attention, first to the march they organized in February to support President Barack Obama's stimulus plan -- and then for a recent "Buy American" rally that focused attention on the use of pipes made in India for the TransCanada oil pipeline. Why are your members so active?
Saltsgaver: We haven't given up. We come from a great base and a great union. Steelworkers are a fighting union -- not that we go out and fight people on the streets, but we stand up for what we believe in.
The things that are happening affect the public in general, and it doesn't only affect blue-collar workers. I would like to see people become more like Granite City, in that they pay attention, get involved and are willing to fight for what they believe in because they know it's right.
If we had throughout the nation what we have in Granite City, our country would be on the right track. We would force our government and Congress to do the right thing: to provide for the people who are supporting the country and working every day for a living, instead of handing all the money to the financial institutions and people who look down their nose at us every day. We should put the investment back into the heart and soul of America. That's the middle and lower class. That's not the rich.
What is your reaction to criticisms that "Buy American" is a call for protectionist trade policies -- and outdated thinking in a global economy?
Saltsgaver: We're constantly fighting for survival against other countries because their steel industries are subsidized heavily by their governments. Specifically, I'm talking about China and India. And you also have subsidies in Japan, other Asian countries and the European Union. We're the only country where the steel industry is not subsidized by the government. We're a private industry, and we're on our own. The playing field has not been level for us. The government needs to wake up and level that playing field with a form of tariff or whatever it needs to do, so we can compete with these companies worldwide.
We just want the right to work, feed our families and protect the manufacturing base in our country so we don't become a third-world nation dependent on China, India, Russia to supply us with the steel we need to make our guns and tanks and ships and planes. If we get there -- and we're at a rapid decline in manufacturing now -- this country is going to be very, very sorry.
The advice of employment experts is often that laid-off workers need to focus on retraining for other work. What are your thoughts on that?
Saltsgaver: That's an answer for somebody working at the unemployment office. That's an answer for someone in Congress trying to evade the issue. The real issue is that dating back to the 1960s, we've shipped manufacturing out of this country. We don't make anything here anymore, as you can see when you go to the store -- whether you're buying electronics, garments or shoes. They're all foreign-made.
If we don't protect the manufacturing base that's left, which is very little -- roughly 30 percent of what we had in 1965 -- we're going to find ourselves in a real quagmire to where we can't even defend the sovereignty of our own country. When you're dependent on people who are jealous of us and who do not like America, when you're relying on your enemies for defense systems and defense material, you are now in very poor shape as a country.
What's happening behind the scenes with our government, trade and manufacturing is that this country is sliding toward a nation of rich and poor. We're eliminating the middle class, and part of the reason is because you are eliminating manufacturing. That's what developed the middle class in this country and anybody that doesn't realize that has not read their history books or studied history.
Steelworkers in Granite City have faced tough times before. How does this time compare to your previous experiences?
Saltsgaver: This is a stressful time, but it is not near as stressful as the bankruptcy and the restructuring of the steel industry in 2002-03.
That was probably the most stressful time in this job -- when we came back finally from a long-fought battle to preserve the National Steel plants and keep the gates open and the employees working. We were successful in that endeavor ... we never missed one paycheck. But the restructuring changed 34 job classifications; it actually condensed them to six job classifications. That was a more painful process.
We've had a lot of stressful issues over the years: fighting imports, the bankruptcies, the restructuring, the tariffs that we needed. We fought for all that, and we survived so far.
But here we are again. Another cycle where steel is in a big, big downturn due to the economy. And the picture is not rosy for the economy, the steelmakers. And the automakers, in particular, we don't know what their future is going to be. And that has a big bearing on our operations in basic steel. Right now, the climate in the economy is not such that we can make any hard predictions of what the future holds for us at Granite City Works.