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ChevMCarlo84

Member
Joined
Jun 28, 2002
I have no idea how this isn't huge national news...

Refinery Workers to Reject Offer, Threaten to Strike

By Aaron Clark and Jordan Burke

Jan. 29 (Bloomberg) -- The United Steelworkers union plans to reject a contract offer from Royal Dutch Shell Plc, setting the stage for a nationwide strike of 30,000 workers at U.S. refineries processing about two-thirds of the country’s oil.

Failure to reach a new accord “poses a real threat of strike action,” Gary Beevers, the Steelworkers’ international vice president in charge of the talks, said in a written message to union members. The offer is the third made so far by Shell and all have been rejected by the union, which is seeking a “substantial wage increase” with a cost of living adjustment.

Shell offered union workers a three-year contract with a $500 signing bonus and a 2.5 percent hourly wage increase in the second and third years, the memo showed. Workers would receive a 75 cent-an-hour pay increase in the first year. The current agreement expires at 12:01 a.m. on Feb. 1. Members have already authorized the union to call a strike.

“This is a contract negotiation that the market needs to take seriously because the impact of a strike is potentially extreme,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York.

Gasoline futures for February delivery rose as much as 5.91 cents, or 5 percent, to $1.2426 on the New York Mercantile Exchange after Bloomberg reported the refinery workers would reject the latest contract offer and threatened to strike.

“Shell is optimistic that a mutually satisfactory agreement with USW can be made at this point,” said Stan Mays, a spokesman for Shell. Mays declined to comment further. Shell is negotiating on behalf of refiners across the country.

Strike Authorization

“At this time no location is authorized to extend the collective bargaining agreement without specific authorization from me,” Beevers said in the memo, dated yesterday.

Shell and Exxon Mobil Corp. are preparing to keep their U.S. plants running in the event of a walkout. Refiners plan to use managers and other non-union employees if necessary to keep plants operating.

“We have made arrangements to operate the plants until a successive collective-bargaining agreement is reached,” said Prem Nair, a spokeswoman for Irving, Texas-based Exxon Mobil, the world’s largest fuel maker. “It would be business as usual. We don’t anticipate any supply impact.”

The threat of a strike comes amid declining fuel demand and a recession that pushed the U.S. unemployment rate to the highest level in almost 16 years.

Cutting Capacity

Valero Energy Corp. and Houston-based ConocoPhillips, the two largest refiners by U.S. capacity, are among companies slowing fuel output after profit margins narrowed. Refiners made gasoline at a loss, as indicated by New York futures prices, for a record number of days in the fourth quarter as fuel prices failed to keep pace with crude-oil costs.

Regular U.S. gasoline prices at the pump average $1.842 a gallon, according to AAA, the nation’s largest motorist club, down 55 percent from a record of $4.114 reached in July.

“We already have the U.S. refining capacity operating at 82.5 percent,” said Evans of Citi Futures. “If you were even to drop that to 75 percent, that would be a big deal. That would give us an operating rate comparable to what we had when the major hurricanes hit the Gulf Coast” last year or in 2005.

BP Operations

The one refiner that said it will idle plants in the event of a strike was London-based BP Plc, Europe’s second-largest oil company. BP doesn’t expect a shutdown of its four unionized U.S. plants because of progress in the negotiations, spokesman Scott Dean said. If a strike is called, it would affect BP refineries that can process 1.3 million barrels of crude a day.

Valero, based in San Antonio, has three plants that are subject to the negotiations, including operations in Delaware City, Delaware; Memphis, Tennessee; and Port Arthur, Texas.

The company has contingency plans for a work stoppage, said Valero spokesman Bill Day, who declined to say whether plants would stay open.

San Ramon, California-based Chevron Corp., the second- biggest U.S. oil company, may keep operating its plants if a strike occurs. “Employees have a right to strike,” company spokesman Sean Comey said. “We have the right and responsibility to maintain operations.”

Refining Workers

A strike could affect 58 percent of U.S. refinery workers and about 64 percent of the nation’s fuel-making capacity, said Lynne Baker, a spokeswoman for United Steelworkers. 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, Baker said.

One of the locals is Steelworkers District 13-423, which covers members who work at Valero’s Port Arthur plant. It last called a strike in 1980, District 13-423 committee chairman Bobby Hollis said in November.

The unions are required to give employers 24 hours notice if there will be a strike, said Lynn Westfall, a spokesman for San Antonio-based refiner Tesoro Corp. Shell, based in The Hague, is serving as lead negotiator for the companies.

Frontier Oil Corp.’s El Dorado, Kansas, refinery is among plants that could be affected.

“We have agreements with our union folks that they won’t walk right out the door,” said Kristine Boyd, a spokeswoman for Frontier. “They would at least stay long enough to bring the plant down safely if we got to the point.”

Boyd declined to say if Frontier had plans to keep the refinery operating if a strike occurred.

Husky Workers

Calgary-based Husky Energy Inc.’s Lima, Ohio, refinery doesn’t face the possibility of a strike by its 200 union workers because their contract doesn’t expire until mid April, said Graham White, a company spokesman.

Lyondell Chemical said about 500 of the 950 workers at its Houston refinery are union members.

“We have developed appropriate contingency plans to supply fuel products to U.S. consumers,” spokesman David Harpole said. “We continue to negotiate in good faith.”

Lyondell inquired about renting shower trailers from Pasadena, Texas-based Precision Structures, Inc., Doylton Davis, Precision’s owner, said in a telephone interview.

ConocoPhillips has plans to use salaried employees to keep refineries running and could help meet customer requirements with fuel from plants that aren’t affected by the strike, spokesman Bill Stephens said.

I work for Conoco's Trainer Refinery and am a card carrying member of USW Local 10-234 in Linwood, PA. This sucks hard. I, like most in our local, think the latest offer is fair given the state of the economy. Are they trying lowball us? Absolutely, given the fact that most of these companies have made disgustingly record profits over the last 5 years, but now is not the time for a strike. The union ****ed up by not seeing the massive rise in price and signing an extension in 2005. Now they're trying to make up for it.
 
I feel for ya Chev. Your guys will be the next union to be villified and tried to be broken as too expectant. Can't get in the way of outa control profiteering! The UAW finally let the cat outa the bag to the masses, that we'll be making less than the jap automakers by this time next year as per our current contract, but we're lazy-a$$-unionautoworkers. We had a refinery guy do a safety talk at our plant a few years ago. Your field sounds dangerous compared to my could get killed with any mis-step job. Hope ya's get a good settlement, and I won't complain once while yer out. Just hope there's enough in yer strike fund and refinery guys can afford it at this point in the economy. That's the real crusher aint it? Knowing that corp $$$ can outlast ya, and profit from it to boot!
 
I work for BP (non union plant) and was just announced a wage freeze for '09. While everyone wants to make more $$ I feel it's only fair given the economy. I'll gladly keep what I make now verses loosing my job or having to take cuts. You look all the people loosing work and I'm glad to have a job.
 
So amazing how few people actually understand the difference between "profit" and "profit margin". Mostly the fault of the modern public education system though I guess. Economics is so poorly taught in this day and age. :mad:
 
So amazing how few people actually understand the difference between "profit" and "profit margin". Mostly the fault of the modern public education system though I guess. Economics is so poorly taught in this day and age. :mad:

Shell reported something like 42 billion earned but it's only 8% return. I know my company just a few years ago would have sold off the segment that was only making 8% because it wasn't profitable enough.
 
Had wondered why the price of gas has jumped .20 a gallon since Thursday even though the price of oil seems to be stable around $41-$42 a barrel.
 
I work for BP (non union plant) and was just announced a wage freeze for '09. While everyone wants to make more $$ I feel it's only fair given the economy. I'll gladly keep what I make now verses loosing my job or having to take cuts. You look all the people loosing work and I'm glad to have a job.

I hadn't looked at BP stock in quite awhile until it got REAL CHEAP this week. Bought 5000 shares and plan to hold it, maybe buy more since dividends at almost EIGHT PERCENT A YEAR!!!, double the best CD's I could find!

I didn't know BP was non union, makes it even a better deal! I would think your job is just about recession proof at this poiint in time!
 
I would be willing to bet most of you during the gas hike when it was almost $5.00 a gallon most would have been happy with $3.00 a gallon forever. I know I would have been. We are still a long way from $3.00 a gallon.

It's funny how these car companies were pushing to make all these hybrid cars and people were flocking to the dealerships to get on waiting lists that were 8-10 months to get a hybrid. But if you look at the extra money it costs to purchase a hybrid ud have to own it for like 15 years now to break even....:rolleyes: They are certainly no bargain in todays market.

Gas prices drop and the big car companies suffer from all the money and advertising they were putting into hybrids. Which equals more lay offs for car companies. Michigan must be hurten.
 
Did you catch the news last month that Toyota will finish the building but not install any inside lines or equip. for the hybrid plant they have going up in Ms? No money in it till gas gets ridiculous again.

That was one of them page7 articles. Just like the one about OPEC supposing to meet early this year. To decrease production so prices go back up despite reduced demand.
 
I hadn't looked at BP stock in quite awhile until it got REAL CHEAP this week. Bought 5000 shares and plan to hold it, maybe buy more since dividends at almost EIGHT PERCENT A YEAR!!!, double the best CD's I could find!

I didn't know BP was non union, makes it even a better deal! I would think your job is just about recession proof at this poiint in time!

Haha. BP stock is cheap for sure. I'm staying in because I have no choice. It's half what it was a short time ago. My retirement $$$ have been cut in less than half but I'm only 33 so I know it will be back for me. Sucks for those guys ready to walk out this spring.

BP still operates some union plants in Texas. Our plant was union back in the late 70's/early 80's. This is the last time our plant had a layoff. Once everyone returned they ran the union out and we haven't had a layoff since. When times get slow we will run the contractors out and those of us who can do maintenance work roll into the maintenance crew. It keeps us a job although the work is less desirable. I look at it as they pay me good money to work. I've worked $hit jobs before for less than half the wage so it's fine by me knowing I have a job to go to.
 
ICWU local 498 member here.35 yrs on the job.Been through 2 strikes and 1 lockout.Never easy or fun.We signed a 4yr contract in 07 with 4%,3%,3%,3% raises.Health care cost ate up the 4% in the 1st year.That sucked.Union dues went up.That sucked.Taxes went up.That sucked.I'm a lucky guy to have a good stable job.It doesn't look like a good time to strike the oil co.It would probable be doing them a favor.Hope you don't have to walk.
 
I'm a non union Valero employee and wouldn't have it any other way. There is no way in hell I would vote for a strike in this economy.
 
The USW has approved a 24 hour rolling extension. Means they're close!

Thats good news.That means union leaders are useing good sense.The threat of a strike is the only leaverage you have to get the best offer. When you hit the bricks you've played your last trump card.Good luck.
 
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