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Editorial by Clarke Thomas, Post-Gazette senior editor

Some people like to blame union labor and high wages for the plight of the steel industry -- for the lost jobs, outsourcing, stranded mill towns. But what's not generally realized is that in recent years the United Steelworkers union has done much to stabilize the industry with ingenious actions that have both prodded and cooperated with management. Specifically, the USW has:

¨     Pushed for mergers among more than 80 steel companies big and small, the better to face the real competition -- government-subsidized steel corporations overseas. That effort has included going to Wall Street to help finance the mergers. While this has meant sacrificing thousands of jobs, it has kept work from going overseas, saving slots for USW members and the wherewithal to provide benefits for retirees.

¨     Prodded steel management to quit micromanaging workers, instead letting them employ their own skills and ideas in the workplace. In return, the USW agreed to relax work rules so that workers could be shifted more easily from one role to another.

¨     Worked with management to deal with "legacy costs," the increasing burden of pensions and health care for retirees.

Not long ago U.S. steel companies were in cutthroat mode, like gunslingers in a circle facing each other. Who was looking out for the industry as a whole? Enter the USW.

"The USW decided the problem was so severe and the steel industry so important that it required the steelworkers to act, including eliminating excess production capacity," explained Robert Bruno, a labor studies professor at the University of Illinois-Chicago.

The USW's new approach began with the presidency of Lynn Williams, the scholarly Canadian who took office in 1983 as the steel industry was collapsing, particularly in the Pittsburgh area. Sooner than most, he realized that the adversarial management-vs.-labor ways of the past had to change. An early effort was persuading U.S. Steel to place a continuous caster at the Edgar Thomson Works in Braddock, thus nailing down the corporation's continued presence in the Mon Valley.

Mr. Williams' approach flowered when a later successor, Leo Gerard, took office in 2001. Mr. Gerard, another Canadian, recalled that in the mid-1990s "the crisis was the worst we'd ever seen. Both the Asian and the Eastern European economies collapsed, so we and Canada -- the only open markets -- were flooded with steel imports, 400 million tons of excess steel. Before long, there were 50 steel companies in bankruptcy across North America.

"We concluded the problem wasn't too many steelworkers but, instead, too many companies. It wasn't time for more concessions, but time to reorganize the workplace."

That was done in two ways. One was to push for mergers. A key figure was an unusual union staffer, Ron Bloom, a Harvard Business School graduate who had worked for the Lazard Freres investment firm before switching to the union side. Mr. Bloom took the position that, in Wall Street parlance, the union was an "unsecured creditor" like many financial institutions and corporate suppliers with claims on troubled companies. His background and contacts helped him work with Wall Street financiers, bankruptcy courts and creditors to facilitate mergers. The primary goal was to support steel makers who wanted to make steel, not indulge in financial games.

In exchange for helping to refinance an ailing firm's debt, the USW would insist that new contracts limit executive pay and place USW representatives on corporate boards. Mr. Bloom's stance was: "We're not going to save this company and go back to the old ways of doing things."

In addition to pushing for the mergers of smaller companies, the USW helped with the purchase by the International Steel Group of LTV in April 2002 and of Bethlehem Steel in February 2003, as well as the merger of U.S. Steel and National Steel in January 2003. In 2006, ISG was taken over by Mittal, a Dutch-based firm operating in more than 60 countries but one willing to keep jobs in the United States.

In the end, two behemoths were left standing -- Mittal and U.S. Steel. Scores of similar mergers had taken place among dozens of smaller specialty steel companies.

Equally important for the industry's health was the USW's push to reorganize the workplace. Management in many industries in the early 20th century had adopted a top-down system devised by Frederick Taylor that pigeon-holed workers in specific jobs and tended to ignore their questions or suggestions. According to USW Vice President Tom Conway, labor responded by saying, in effect, "O.K., then we'll have union work rules that you can't switch people around on jobs." This led to the work-rule standoff about which management had complained for decades, Mr. Conway said.

When the steel industry began to collapse, the USW insisted that if there were to be fewer workers, there should be fewer bosses, too. Mr. Conway recalls a plant that had 30 foremen "just standing there. We really ran into an arrogant bunch of guys on changing management's mindset on that." Mr. Gerard said the fault often lay more with company lawyers than with management itself.

Tom Wood, Mittal Steel's vice president for labor relations, credits labor for the "courage to realize that there was no room anymore for feather-bedding." One hundred job descriptions were cut to six, including one called "senior operating technician" that allowed a USW member to do much of what a foreman formerly did. In one Cleveland plant, 125 foremen were cut to 25. The point, Mr. Wood emphasized, is that both sides worked together for "worker empowerment."

The USW also asserted that in an environment of contraction workers needed to have more than one skill. To enable cross-training, the union set up Institutes for Career Development, financed by a paycheck deduction of 15 cents per hour. Some training took place at community colleges and technical institutes; other skills were developed in trailers adjacent to mills. Steelworkers could become certified as plumbers, electricians, roofers, etc., learning skills that were useful in the plant or elsewhere if they were laid off.

The third effort by the USW came in regard to "legacy costs" -- the pension and health-care benefits for retirees whose costs were soaring because of so many layoffs, increasing health-care costs and the fact that people were living longer. Bankruptcies galore, among the airlines as well as in the steel industry, had overloaded the federal Pension Benefit Guaranty Corporation. The USW worked with management to utilize a Voluntary Employees Beneficiary Association arrangement -- a tax-exempt trust fund into which companies can contribute to help finance retiree benefits.

In today's climate of seemingly constant labor-management conflict, isn't it refreshing to hear this story of cooperation in one of the vital industries to our nation and region?

Copyright, Pittsburgh Post-Gazette, 2007, all rights reserved, Reprinted with permission.