FARRELL, Pa. - For the time since United Steelworkers Local 1016-03 announced a strike against steel company NLMK, the company is speaking out and answering questions regarding the accusations of unfair labor practices and the ongoing strike.

Workers have been on strike for over two weeks now.

NLMK issued a press release Tuesday saying, "Several questions have been raised to NLMK regarding the ongoing strike. This information release is intended to provide responses to those questions and to continue to set the record straight in the public's eyes."

The following are general questions and answers that NLMK has responded to regarding the current operation of the plant during the strike:

Q: Are salaried employees still working on the production floor?

A: "Yes. We have been running equipment to complete coils in production that were already in production when the union employees chose to leave their jobs. Since these coils had already been ordered, it was important to finish them and get them to our customers. We also need to maintain the plant facilities so that they remain in good working order."

Q: Is NLMK shifting production to other U.S. facilities in response to the strike?

A: No. Our customers know that we will be reducing our supply to them, and we are working closely with our customers to preserve our relationships.

NLMK is also responding to several various union claims that the company has chosen to respond to:

Q: Employee cost for the PPO would increase five-fold over the course of the contract. Is this true?

A: "This is another example of the misinformation that union leaders continue to tell our employees and the public. We have made it clear that it is our desire to transition our employees from a PPO to a high deductible plan. The truth is that our last offer on the high deductible plan would actually cost less to the employee than their current PPO plan."

"Although the cost of the PPO we have offered has annual increases associated with it, it does not increase five-fold over the course of the contract. The current monthly premium for family coverage is $185.00. This premium will rise each year by an additional $50.00 per month, so the monthly premium would be $235.00 in the first year of the contract, then $285.00 in the second year, then $335.00 in the third year, and finally $385.00 in the final year of the contract. This $200.00 per month difference over four years is not a 'five-fold increase.'"

"Even with the small increase in health care premiums paid by the employees, the PPO plan offered is still considered to be a premier health plan in today's healthcare marketplace."

Q: Employee cost for the PPO would more than offset the pay increases called for in the contract. Is this accurate?

A: "This is untrue. The average employee pay increase contained in our last offer would be more than double the number of premium increases we have proposed to their current PPO without even factoring in the extensive overtime, holiday, or shift differential pay that they would receive under the contract."

"Also, it is important to keep in mind that the high deductible plan would offer the same benefit coverages they have today under their PPO at a lower cost to the employees. The move from their PPO to the high deductible plan would actually result in an increase in the average employee's take-home pay. The union leadership refuses to admit to this major point."

Q: In the 2016 contract, the Union claims to have opted to forego pay increases so the Company could invest in the new walking beam furnace, which has never been installed. Can you confirm this?

A: "This is false. The 2016 negotiation did not link a wage freeze to the new walking beam furnace. It is true that NLMK was working to obtain funding for this major project and to start the project. Today, we are in the process of installing the walking beam furnace.
It is important to point out that the installation of the walking beam furnace was never a negotiated term integrated into the last contract. If that were the case, then the installation of the furnace would have been contained in the last contract as a contractual obligation on our part. Since there is no mention of the walking beam furnace in the last contract, the fact of the matter is that this statement is false. The real story behind the wage freeze is that the USW membership voted to keep its basic PPO plan and to accept a sizeable signing bonus in exchange for their agreement to forego pay increases over the life of the contract."

Q: Is the furnace part of the planned $600 million investment that has been delayed because of President Trump's tariffs?

A: "Yes. The walking beam furnace was part of a substantial investment plan for this small-town steel mill that missed many technical upgrades under the course of previous ownership. These investments have been significantly reconsidered once the Trump administration imposed tariffs on the slabs of steel we import to convert into steel coils. It is ironic that the same United Steel Workers union that represents the NLMK Farrell workers has lobbied extensively for strong import controls and supports the Section 232 tariffs on imported steel slabs that directly impact the continued livelihood and futures of its union members."

Q: The union says NLMK is paying fewer tariffs because it's buying steel from Brazil, which is not subject to tariffs. Is this accurate?

A: "The company paid $167 million in tariffs in 2018 and 2019. We have been able to buy slabs from Brazil, but those slabs are subject to a quota, which places a limit on the number of slabs we can import. Additionally, the slabs must be held in customs and sometimes are not released for up to nine months. Significant price risk exists as these slabs wait for future quarterly quotas to free up, which could result in an increase in pricing. Recently the Trump administration just canceled the 4th quarter import quota on Brazilian slabs, which is of great concern for NLMK. Finally, Brazilian slabs carry a premium over market pricing since the Brazilian slab manufacturers know we have limited import options and no domestic options for the volumes we need in the USA. In essence, the increased costs and limited supply are in practicality the same as paying tariffs on Brazil slabs."

Q: However, does that mean NLMK is not buying steel from the parent company, and does that have any impact on NLMK finances?

A: "The additional cost of tariffs and Brazilian slab pricing has no impact other than the negative impact of paying above-market pricing."

Q: The union claims that the 2016 contract included provisions for an advisor to help employees navigate provisions in the high-deductible plan, but no advisor was ever provided, and the workers, therefore, do not trust the high-deductible plan. Did the company provide an advisor?

A: "Keep in mind that the high deductible plan has been an option to our employees since the 2012 contract, so the introduction of the high deductible plan in the current contract negotiations was not a surprise to the union leadership as they claim. NLMK has hired a full-time benefits coordinator whose responsibility is to address employee questions and concerns about the high deductible plan. We actually have 44 union employees, which is approximately 10% of our union workforce, currently enjoying the high deductible plan. Under our last offer, their financial situation would improve since we have offered to deposit enough money into their health savings account to completely cover their entire out of pocket deductible. In fact, the previous president of the local union, as well as other members of the union's bargaining committee, chose the high deductible plan for themselves and their families because they understood the financial benefits they would realize from this type of healthcare coverage. Current union leadership, for some reason, is not willing to admit that the high deductible healthcare plan coupled with our offer to make contributions into each employee's health savings account will reduce the cost of healthcare for their members."

21 News has reached out to the United Steelworkers Local 1016-03 for comment. They are aware of the press release from NLMK and are forming a response to the answers NLMK has provided.