AEIF weighs talks on AK competitivenessBy Joseph
Roberts, Journal Staff Writer, E-mail: email@example.com
Leaders of the Armco Employees Independent Federation next
week will begin discussing a request from AK Steel Corp. to enter
talks that could change the workers’ contract.
AEIF President Ed Shelley said that the union is interested in
avenues to help the company be more competitive that do not involve
the contract, but he said changes are possible.
“We’re not looking for concessions,” he said. “We are looking for
ways we might be able to help.”
An industry analyst said such requests are uncommon, but he was
not startled by the overture.
“I don’t think we should see this as a surprise,” said Leo
Larkin, who is an equity metals analyst for Standard & Poor’s.
“It’s very unusual, but less so in this current environment,” he
Larkin said that recent mergers and acquisitions in the steel
industry have allowed AK’s competitors to lower their labor costs.
He said AK must do the same to stay a viable competitor.
“They have to lower their costs. They have to at least be as low
as their major rivals,” he said.
AK Steel Vice President of Public Affairs Alan McCoy agreed that
acquisitions out of bankruptcy have lowered the costs of other steel
“Much of our competition today is operating assets that they
acquired without the burden of legacy costs” such as pensions and
health care for retirees, he said. “We have to find a way to be more
However, McCoy said he did not think the request was a rare one.
“I don’t think it’s unusual that companies, whether they’re steel
or auto or airlines ... would seek dialogue with their unions and
other employees to talk about being more competitive,” he said.
Shelley cited AK’s issues with the federal and state
environmental protection agencies as an example for possible
“Maybe lending some support there could be a possibility,” he
said. “There are areas I think we can look at.”
Shelley recalled an incident with a customer, which occurred in
around 1991, when the union and the company had worked together to
resolve a problem.
“We were producing a quality product, but it wasn’t the improved
quality our customer was looking for,” he said. The AEIF had
encouraged AK to send its employees to visit the customer’s workers
and to speak with them directly.
“From that we have become even better,” Shelley said. “We lead
the industry in the quality of our steel. We’ve become a very
Shelley said the AEIF’s 12-member executive committee — of which
the president is a member, though he only votes as a tie-breaker —
will first discuss the request.
“I think that we should give this request full consideration,” he
said. “I am certain that will occur.”
The committee then decides whether to enter discussions with the
company, and informs union members and AK of the choice. Shelley
said the talks, if embarked on, likely would take place during the
Shelley also said the union and the company would have to agree
that the current contract would stay in place unless both parties
agreed to changes. Any revisions, he said, would be presented to the
workers’ approval for a vote.
“Should we make any changes, it would be subject to
ratification,” he said. Shelley said other initiatives not involving
the contract “could possibly be taken for some form of approval.”
Larkin said he could not recall an instance where a union agreed
to reopen a contract, but said he believes the AEIF will have to
consider entering talks with AK.
“I don’t think there’s any choice,” he said.