The U.S. United Steelworkers union adopted a national agreement on pay and benefits last week, averting a nationwide strike that could have affected 30,000 workers at 26 companies operating crude oil refineries and petrochemical plants.
The agreement was negotiated between the union and leading U.S. refiner Marathon Petroleum on behalf of the refiners and chemical producers.
- Four-year deal includes 15% pay raise, $2,500 signing bonus
- USW sought 16% raise, Marathon firm on final offer
- Contract replaces current one, which was extended before the February 1 expiration
- Union tells bp Indiana refinery employees to prep for strike, lockout
"We are pleased that Marathon and the USW have successfully negotiated a pattern agreement for new collective bargaining contracts in the U.S. refining industry," said Marathon spokesperson Jamal Kheiry. "We look forward to our local sites moving forward with the ratification process."
The four-year agreement will lift pay for hourly workers by 15%. It also provides a $2,500 signing bonus for USW-represented employees. USW members are employed at refineries that account for about two-thirds of U.S. national capacity.
The agreement - which provides a 4% pay increase in the first and fourth years and a 3.5% increase in the second and third years - was proposed on February 1. Previous offers since negotiations began in late January had been rejected.
The agreement was approved by the USW National Oil Bargaining Program (NOBP) policy committee that represents oil workers from around the U.S., the union said to BIC Magazine.
USW NOBP Chairman Mike Smith credited union members for the agreement.
"USW members, across the country, across employers, across our industry, stood together in calling for a fair contract,” Smith said in a statement from the union. "Their unity and solidarity made this agreement possible."
While a nationwide strike has been averted, individual refineries and chemical plants could still see work stoppages because of disagreements over local issues.
On Thursday, USW Local 7-1 in Whiting, Indiana, told members employed by bp at its Whiting refinery to prepare for a strike or lockout.
On Friday, bp said it would not feel bound by the terms of the national agreement approved by the USW.
"Regardless of what was agreed upon at the national level between Marathon and the international USW, the Whiting Refinery is, in no way, obligated to follow the 'pattern,'" a bp spokesperson said. "We will continue to bargain in the best interests of our employees, our company, and the community."
Eric Schultz, president of USW 7-1, called BP's announcement unprecedented.
"We’ve spent most of our negotiations discussing BP’s concessionary proposals that would eliminate local jobs, reduce pay across the board and strip us of bargaining rights,” Schultz said. "We will continue to negotiate in good faith."
Union officials this week met with local unions to gauge their willingness to accept what became Marathon's last, best and final offer, said sources familiar with the negotiations. The USW had hoped to gain a 16% overall increase during the week, but Marathon stood firm on its final proposal, the sources said.
Union leaders had to contend with the expectations of rank-and-file members who were hoping the USW would achieve a 25% increase over the course of the new contract, with cost-of-living adjustments if inflation exceeded the annual pay increases.
The average inside operator at a refinery makes about $50 an hour.
The new contract will begin replacing the current one as it is adopted at each plant. The current agreement was extended on a rolling, 24-hour basis just hours before it was due to expire at 12:01 a.m. on February 1.
