Refiners, Steelworkers Plan to Extend Contract Talks Second Day
By Aaron Clark and Jordan Burke
Feb. 1 (Bloomberg) -- Refiners and the United Steelworkers plan to extend negotiations on a new contract for 30,000 U.S. employees for a second day tomorrow, delaying a potential strike that would affect almost two-thirds of production capacity.
The union didn’t receive any new proposals from Royal Dutch Shell Plc today, Lynne Baker, a spokeswoman for the United Steelworkers union, said in an e-mail. “Both parties continue to discuss bargaining issues,” she said, without providing details.
“We are still working under a rolling 24-hour contract extension and will continue to bargain till we reach an agreement or either party terminates the contract,” Baker said.
The negotiations cover workers at 86 plants representing about 64 percent of U.S. refining capacity, including operations owned by Exxon Mobil Corp., Valero Energy Corp., BP Plc and Chevron Corp. as well as Shell. Gasoline futures prices soared almost 10 percent last week on concern over a walkout. The contract extension was agreed on late yesterday in Austin, Texas, where the talks started Jan. 20.
“We’re pleased progress is being made and we’re optimistic that a mutually satisfactory agreement can be reached with the USW,” Stan Mays, a spokesman for Shell, said earlier today. He declined to discuss the negotiations.
Last week the union rejected Shell’s third offer, a three- year contract with a $500 signing bonus and 2.5 percent wage increases in the second and third years, according to a Jan. 28 memo distributed by the union. Employees would have received a 75 cent-an-hour increase in the first year.
Workers authorized a strike in October. Most local contracts have been negotiated and workers are waiting to hear if there is a settlement or if they will go on strike, W.E. Sonny Sanders, the sub-district director for the state of Louisiana, said in an interview.
Pickets Ready
“We have picket captains waiting if a strike becomes imminent, but I think most people would like to watch the Super Bowl,” Sanders said. “I wouldn’t be surprised if they settled this Monday or Tuesday.”
Sanders said he believes Shell is working on a fourth contract offer. The union needs assurances another offer will be followed by other oil companies, he said. “I think they’re close. We’re interested in an agreement.”
Valero, the largest U.S. refiner, plans to operate its Port Arthur, Texas, refinery with a contingency workforce and shut refineries in Delaware City, Delaware, and Memphis, if there is a strike.
“At the local level, Valero is still in talks with the unions,” Bill Day, a spokesman for Valero, said in an e-mail today. “At Port Arthur we are prepared to continue operations in the event of a work stoppage, but again, we are hopeful we can get an agreement without a work stoppage.”
Valero Preparations
Valero has agreements with unions at the Memphis and Delaware City refineries that if they call for a work stoppage, employees will stay on the job for 72 hours to help complete a safe and orderly shutdown of the plants, Day said yesterday.
The Memphis refinery can process about 182,000 barrels of oil a day, according to Energy Department data. The Delaware City plant can process 190,200 barrels a day, while the Port Arthur plant can process about 294,000 barrels a day.
BP, Europe’s second-largest oil company, has estimated that a walkout could affect four of its U.S. refineries processing about 1.3 million barrels of crude a day, said Scott Dean, a spokesman. The company plans to shut plants where there is a strike.
The union at BP’s Texas City, Texas, refinery reached an agreement on local issues with the London-based company, said Sanders.
Lyondell Chemical
Lyondell Chemical Co. “continues to bargain in good faith and will continue as long as we make progress,” David Harpole, a company spokesman, said yesterday. About 500 of the 950 workers at its Houston refinery are union members.
Lyondell has been training salaried personnel for the past year to be replacement workers “who can safely operate the refinery” in the event of a strike, Harpole said. “They are able to take over if necessary. There would be no impact to operations.”
Shell and Exxon Mobil are preparing to keep their U.S. plants running in a walkout, using managers and other non-union employees to keep sites operating. Prem Nair, a spokeswoman for Exxon Mobil, the world’s largest fuel maker, declined to comment yesterday on the status of the negotiations.
Chevron, the second-biggest U.S. oil company, may keep operating its refineries in the event of a strike.
A strike could affect 58 percent of the workers responsible for the nation’s fuel supply, union spokeswoman Baker said. The current contract was reached in 2002 and was extended in 2005.
The union’s national bargaining policy calls for higher wages, including a cost-of-living adjustment, as well as full medical, dental and vision-care benefits for workers and retirees. Local unions also may call strikes if they don’t reach agreement on issues such as work schedules and overtime.
source : Bloomberg.com
