Sherwin Alumina Fact Sheet

Sherwin Alumina Fact Sheet
© THE UNITED STEELWORKERS
October 13, 2014
Sherwin Alumina Contract Proposal and Lockout
Despite profitability and rising aluminum prices and productivity, Sherwin Alumina has
demanded its employees accept substantial cuts in earnings and benefits. The Company’s
October 1, 2014 proposal:
1.
eliminates overtime pay for hours worked on your scheduled days off;
2.
pays a $1,500 bonus instead of a wage increase in the first year;
3.
has lower wage increases than in the recent contract covering Alcoa Point Comfort;
4.
increases employee contributions for health care from $100 to $175 per employee per
month – the equivalent of a wage cut of $0.31 per hour;
5.
eliminates health care coverage for Medicare-eligible retirees and eliminates funding for
the retiree health care VEBA; and
6.
fails to increase pensions for current employees and eliminates pension coverage for
new hires – with no adequate replacement. New hires would have no disability
protection, early retirement or widow’s benefits.
On October 10th an overwhelming majority of the members of USW Local 235A voted to reject
the Company’s last proposal and return to the bargaining table to reach an agreement.
On October 11th, Sherwin Alumina locked out the members of USW Local 235A in an attempt to
force them to accept the Company’s proposed contract.
Sherwin Owned by Glencore, Global Commodities Trading Firm
Sherwin Alumina is 100% owned by Glencore, a publicly-owned, multinational commodity
trading and mining company headquartered in Baar, Switzerland. As of 2014, it is ranked tenth
in the Fortune Global 500 list of the world's largest companies. Glencore’s shares are listed on
the London, Johannesburg and Hong Kong Stock Exchanges.
Sherwin Alumina does not report its financial or operating results. Glencore is so large and
diverse that Sherwin Alumina is not a material portion of Glencore’s business. Sherwin
Alumina’s results are combined with other interests in the Aluminum and Alumina portion of
Glencore’s Metals and Minerals segment.
Glencore has revenue of $233 billion in 2013 and net income of $4.6 billion. By comparison,
Alcoa has revenue of 23 billion in 2013. According to Glencore’s 2013 Annual Report, it owns
over 150 mining and metallurgical facilities, offshore oil production facilities, farms and
agricultural facilities and has a global network of more than 90 offices located in over 50
countries. It employs approximately 200,000 people, including contractors.
Sherwin Alumina Corpus Christi Alumina Refinery
The Sherwin Alumina refinery processes bauxite to produce smelter and chemical grade
alumina (aluminum oxide), which is smelted to produce aluminum metal. Alumina is also
widely used by the abrasives, chemicals and refractory industries.
The plant was constructed in 1953 by Reynolds Metals. It was owed by Reynolds Metals until
2001, when it was sold following Alcoa’s acquisition of Reynolds Metals. It was purchased by
Glencore in 2007.
Sherwin Alumina produced 1.6 million metric tons of smelter and chemical grade alumina in
2013 – up from 1.38 million metric tons in 2012.
Sherwin Alumina Workforce and Wages
Sherwin Alumina has approximately 450 hourly employees represented by United Steelworkers
and its Local 235A.
The average Sherwin Alumina hourly employee is 47 years of age, has worked for the Company
14 years and is a wage grade 20, with a wage rate of $23.19 per hour. The average hourly
employee works over 2,500 hours per year – many of the employee work 12-hour shifts. Much
of the overtime hours are voluntary but much is compulsory or forced.
Wages increased by an average of 1.4% per year under the 2011-2014 Sherwin Alumina- USW
labor agreement, compared to an increase in consumer prices during the same period of 7.8%.
Commencement of Master Agreement Bargaining
Negotiations between Sherwin Alumina and the USW for a new contract began on July 8, 2014.
The contract was scheduled to expire on July 31, 2014, but was extended through September 30,
2014 to provide additional time for the parties to reach an agreement.
The Last USW Strike at Sherwin Alumina
There has not been a labor dispute or work stoppage at Sherwin Alumina, since it purchased
the plant in 2007. There has not been a labor dispute at involving the plant under prior
ownership for over 30 years.
Alumina and Aluminum Prices
Alumina is currently trading for $355 per metric ton on the spot market, compared to averages
of $322 per metric ton during the third quarter 2014 and $327 per metric ton for 2013. Analysts
forecast alumina prices at $350 per metric ton in 2015 and $370 for 2016.
Aluminum averaged $0.90 per pound on the London Metal Exchange during the third quarter
of 2014, compared to $0.084 per pound in 2013.
Sherwin Alumina’s Production Costs
Sherwin Alumina does not report its financial or operating results. However, a May 2014
presentation made by Alumina Ltd. citing figures from Harbor Aluminium, estimated
Sherwin’s cash production cost as among the lowest 25% of global producers (i.e. ranked from
lowest to highest cost).
Sherwin Alumina’s Retiree Health Care Proposal
The company’s proposed contract would eliminate all medical and drug coverage for all current
and future Medicare-eligible (i.e. post age 65) retirees, surviving spouses and dependents. There
are currently 135 retirees, surviving spouses and dependents who would lose medical and drug
coverage effective January 1, 2015, under the Company’s proposal. Another 63 retirees have
retired but are not yet eligible for Medicare. Medicare-eligible retirees and dependents pay
premiums of $50 per month per person.
The expired contract contained a cap on the Company’s cost for retiree health care benefits. In
2011, the parties negotiated a trust fund to help pay the cost of retiree health care benefits above
the caps. The Company proposal also eliminates any additional funding for the retiree health
care trust fund.
For More Information:
www.usw.org