Workers Are Steeling Themselves to Fight Non-Union Upgrading of Pittsburg Plant

PITTSBURG, Calif. â€”  To industry experts, the agreement of USX Corp. and Pohang Iron and Steel Co. of South Korea to modernize an old steel mill here represents an exciting pathway to the future.

The first joint venture of American and Korean steel companies, the refurbished plant would, when completed in 1989, be the world’s most advanced cold steel finishing facility, according to Fordham University economics professor William C. Hogan, an authority on steel-making.

But to Joe Tiner, a member of Boilermakers Local 549, and to other unionized construction workers in the San Francisco Bay Area, the project represents a threat to their livelihood. That’s because USS-POSCO, the joint venture company, awarded the $350-million modernization job to a non-union construction company from Alabama that plans to pay wages considerably lower than the normal union rates in the area.

Protest at Consulate

One day recently, Tiner, wearing a hard hat and waving an American flag, and 700 other construction workers stood in the rain outside the Korean Consulate in San Francisco’s ritzy Pacific Heights district.

Many of the burly men sported buttons proclaiming “Unemployment--Made in Korea.� They cheered as Jack Henning, executive secretary of the California Federation of Labor, and several other union leaders pledged to wage an international campaign to make BE&K;, the Alabama company, sign an agreement to use union workers on the Pittsburg project. Henning threatened to agitate for a U.S. boycott of the 1988 Seoul Olympics and of all Korean-made products, if necessary.

“They’re offering wages that are 25% what some of us normally make,� Tiner asserted. “There will be 2 million man hours on that project and we’re here to get it back.�

“This is war,� Ken McGrew of the Asbestos Workers union said.

“It is ironic that 35 years ago we were over there defending them (in the Korean War) and now they’re sending us to the poorhouse,� he said, referring to the South Korean government’s one-third ownership of Pohang’s stock.

South Korean officials in this country have responded by saying the unionists should take their complaints to the company, not to them.

The dispute creates difficulties for the United Steelworkers of America, which represents workers at the Pittsburg plant and wants the modernization to go forward. The steelworkers are trying to be supportive of the unionized construction workers without endangering their own jobs.

“We’re supportive of the building trades trying to keep the work union,� said Lynn Williams, president of the United Steelworkers, in a recent interview. It is unclear at this point though, just what the steelworkers will--or can--do to make that happen. Jerry Cremins, president of the California Building Trades Council, stressed in an interview that the dispute is not merely a Bay Area battle. The $350-million job would be the largest non-union construction job in California history.

The controversy is an example of how building trades unions nationally are taking a more militant posture in an effort to prevent further diminution of their share of the nation’s construction work. Last year, for example, the Building and Construction Trades Department of the AFL-CIO pressured a Japanese company to build a new Toyota plant in Kentucky with union laborers.

For this campaign, the California Building Trades Council is drawing on the support of the well-connected political consulting firms of Cerrell Associates of Los Angeles and the Kamber Group of Washington, plus environmental lawyers, AFL-CIO officials in Washington, Sen. Alan Cranston and 15 of California’s Democratic Congressmen. USS-POSCO is being aided by McGuire, Barnes, Andrascik, a San Francisco public affairs company, and Morrison & Foerster, one of that city’s most potent law firms.

‘They’re Dreaming’

It could be a lengthy battle. E. A. Roskovensky, president of USS-POSCO, acknowledged last week that the company is already three months behind schedule. Still, he and other company officials maintained that the project would be finished by late 1989.

“They’re dreaming,� said Tom Adams, a San Mateo environmental lawyer who is helping the unions and who indicated that he is prepared to tie up the project for years with lawsuits on land use, water and hazardous waste permits.

USS-POSCO is clearly concerned about the pressure campaign. Roskovensky said that if the modernization project falls through the plant will be closed, causing the loss of 1,000 jobs and $60 million to the local economy.

He said BE&K; got the contract here because it came in with a bid $45 million lower than those submitted by unionized contractors. He said USS-POSCO can’t afford to pay more for the construction work.

That view was echoed by Scott Robertson, spokesman for BE&K.; “To be competing in the world market, especially in steel, they can’t afford to pay union wages,� he said in an interview here.

In Contra Costa County, unionized electricians are paid $25.16 an hour plus benefits, according to Warren Jackman, president of the Contra Costa Building Trades Council. He said the unions were willing to lower their normal rates but not to the levels BE&K; is planning to pay.

Robertson said BE&K; plans to hire about 800 workers on the project. “They’ll be well paid, but we won’t pay them like lawyers,� he said. At the low end, laborers will start at $7.50 an hour. Skilled crafts workers, including electricians, will be paid $14 to $16 an hour, plus health benefits, he said.

He also said the ability to use the same worker in a variety of jobs, which could not be done under a union contract, would save the company a lot of money.

Robertson disputed union assertions that many of the workers would be brought in from out of state. He said the company had received more than 600 applications through the state Economic Development Office in Antioch, with 85% of the applicants coming from the Bay Area and Central Valley. Further, he said 80% were now unemployed. Robertson added that BE&K; probably will use some union subcontractors.

Like its East Coast namesake, Pittsburg is a classic setting for a labor battle. Located at the junction of the San Joaquin and Sacramento rivers, it was founded in 1849 by Col. J. D. Stevenson of the New York Volunteers and laid out as the “City of New York of the Pacific.� Coal was discovered in the hills north of the city in 1852 and soon a Pittsburgh Coal Co. was formed, named after the industrial city in Pennsylvania.

The town was renamed Pittsburg when the first steel mill, the C. A. Hooper Steel Works, was erected in 1911. “They dropped the ‘H’ for simplified spelling and it has been ‘Pittsburg’ ever since,� said Bob Jones, general manager of the Chamber of Commerce.

The plant was taken over by U.S. Steel Corp. at the end of World War II and its work force grew steadily, peaking at about 5,500 in the mid-1950s. But it began to shrink gradually after that. By 1986 the work force was down to 1,100 hourly employees, Jones said.

The genesis of the current controversy lies in USX’s 1985 decision to join forces with the competition it couldn’t beat. Late that year, USX announced that it had formed a joint venture with Pohang to import low-cost, semi-processed steel from South Korea. The steel would be finished at the Pittsburg plant and compete with other foreign steel that dominates the West Coast steel market.

Officials said the success of the deal depended on several contingencies: negotiation of a new labor agreement between the United Steelworkers and the joint venture company, the easing of federal import restraints on steel when they expire in 1989 and modernization of the Pittsburg plant.

Late last month, Steelworkers Local 1442, which represents the workers here, narrowly ratified a new contract. The agreement freezes wages until March 1, 1988. After that, the average wage of $12.33 an hour will be cut by 4.5% to $11.80 an hour, for the duration of the five-year contract. Each worker will get a $1,000 bonus on March 1, 1990. Some work rules were modified to give the company greater operating flexibility. Management also agreed to reinvest its wage savings in worker retraining. The local union leaders also signed a side letter in which they pledged to support the modernization process.

Still, Williams, the union’s international president, said in a recent interview that he opposes lifting voluntary restraints in 1989 and favors supplying the Pittsburg plant with semi-finished steel sheet from domestic plants.

Until last summer, when USX locked out its steelworkers nationwide, USX’s Geneva Works in Orem, Utah, was the primary source of supply for the Pittsburg plant. Early in February, USX announced that the Utah plant would be closed, resulting in the loss of 2,000 jobs there. USX said the plant here will get its steel primarily from its Gary, Ind., plant and a limited amount from Pohang until October, 1989. From that point forward it will get a million tons of steel coils yearly from Pohang if import restraints are lifted, as is anticipated.

Pohang is considered a highly efficient producer with wages in the $3-an-hour range. Its work force is not unionized. Steel analysts estimate that USX could save $50 a ton in costs by importing coils from Pohang.

The plant here has produced sheet and tin products for years for the canning, appliance and construction industries. Its market share has declined in recent years due to stiff competition from imported steel and because the plant is no longer at the cutting edge of technology, according to Fordam University’s Hogan.