U.S. Steelworkers to Reject Oil Companies’ First Offer
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January 23:
Photographer: Brittany Sowacke/Bloomberg
A worker prepares to lift drills by pulley to the main floor of a drilling rig in the... Read More
United Steelworkers leaders, representing employees at about two-thirds of U.S. refineries, instructed members to reject the first three-year contract proposed by companies on Friday, describing the offer as “offensive.”
Gary Beevers, the USW international vice president who manages the union’s oil sector, told all local units to turn down the proposal made collectively by companies including Chevron Corp. (CVX), Exxon Mobil Corp. (XOM), Marathon Petroleum Corp., Royal Dutch Shell Plc (RDSA) and Tesoro Corp. (TSO), a telephone message distributed to members on Friday shows. Negotiations between the USW and refiners began this week. The current contract expires Feb. 1.
Oil workers are asking for bigger pay raises and better benefits as U.S. oil refiners cash in on the cheapest oil in almost six years. Themarket value of U.S. refiners has jumped as plants take advantage of a domestic shale boom that has propelled the nation’s oil production to the highest level in at least three decades. A nationwide strike threatens to halt 63 percent of U.S. fuel production.
“Workers are putting their lives on the line every day, and they want their share of the profits,” Lynne Hancock, a United Steelworkers spokeswoman based in Nashville, Tennessee, said by telephone on Friday.
Kimberly Windon, a spokeswoman for The Hague-based Shell, which is representing the oil industry in negotiations, didn’t immediately respond with a statement.
The USW is asking for a “substantial” increase in wages, stronger rules to prevent fatigue and measures to preserve the share of union workers rather than contract employees, Beevers said in an interview in Pittsburgh Oct. 31.
Refiners Gaining
An index of refiners in the Standard & Poor’s 500 has gained 157 percent since the beginning of 2012, when the steelworkers last negotiated an agreement with the companies. Refiners Marathon Petroleum Corp. (MPC) and Tesoro Corp. went on that year to take their place among the 10 best performers in the S&P 500 Index. (SPX)
Refiners have been cashing in on the biggest-ever domestic oil boom, driven largely by volumes being pulled out of shale formations using hydraulic fracturing and horizontal drilling. The surge in production has helped lower U.S. oil prices by 58 percent since June 20.
For the first time in at least 20 years, union members have established local funds that would help compensate workers during a potential strike, according to Beevers, who said he expected the biggest fight in his time as leader.
