Labor's Current Challenges

Updated: Jan 17

Our focus in this section is on the predicaments ASARCO’s unions have faced as they try to guide their members through challenging, sometimes traumatizing shifts in the company's mode of operating in the world. These shifts involve the company’s name, its gravitational center, its many guises and subsidiaries, its shifting job base and its changing treatment of employees and retirees. The ASARCO story is not unlike the stories that workers and communities face all over the world as they seek to confront elusive companies that are relocating and redefining themselves, all the while developing new political and legal mechanisms to shirk their social contracts and commitments.

In response, labor has had to adopt both offensive and defensive strategies. It has had to become litigious, initiating legal cases and defending itself in the courts. This is quite different from the body-contact politics of the early twentieth century, especially when we look at the struggles that took place over labor conditions in the mines and smelter towns. Labor unions must now enter a murky arena of politico-legal battles, ranging from conceptual disputes about whether a company has a “right to pollute” to contesting “tort reform” crusades designed to protect companies from claims made by injured workers. In this section we want to show how a transforming company like ASARCO shapes strategies to push community responsibilities, financial burdens and the need for environmental and public health protection back onto labor and labor’s communities—onto families, neighbors and the environment—and we want to show how labor is fighting back.

One example of labor’s new challenges appeared in the Wall Street Journal in 2004. The article, “Companies Sue Union Retirees to Cut Promised Health Benefits,” presents grim stories of retirees who are being hounded and sued by former employers seeking to strip down their benefits. ASARCO is one of the companies featured in the article. In 2003 the company informed retirees that it was raising their health care premiums. Retirees in Arizona were summoned to court. The company suit cited a “duration clause,” which they claimed gave ASARCO the right “to amend or terminate the Plans at any time for any reason. even after you retire.” Chuck Yarter, retired Arizona ASARCO miner, was given a letter stating, “As you know the past several years have been very difficult for the copper industry. The continuing low copper prices and escalating medical costs force us to make these changes” (WSJ, 11/10/04). Essentially, ASARCO was arguing that the “duration clause” allowed it to change the rules for its retirees once a labor contract had expired.

The Steelworkers USW), ASARCO’s key union, along with the International Brotherhood of Electrical Workers (IBEW) and the International Chemical Workers, challenged the action taken by the company. The unions pointed to the lucrative pay sustained by top management in contrast to the financial threat posed to retirees; and they argued that “unforeseen circumstances do not justify a breach of contractual obligations to persons on fixed income who can ill afford to pay the costs the company has shifted upon them” (WSJ, 11/10/04).

A rally in Tucson launched the Solidarity Council for Justice, a coalition that included all the unions with workers at ASARCO: the Carpenters, Electricians, Machinists, Operating Engineers, Plumbers and Steamfitters, Boilermakers and Teamsters. The coalition took the company on over this breach of contract and breach of trust. A worker from Hayden spoke at the rally:


"This company trashes retired workers, working workers, the people who sell them service and parts, the environment and the people who live anywhere near their plants. We’re not going to take this lying down and this isn’t the last time you’re going to see us!” (retrieved from USWA website, 6/24/05)


The workers were joined by Arizona State Senator Peter Rios. Robert Manriquez, USWA Local 5252 President at ASARCO's Ray mining and smelting complex said:


"This company has the legal, moral and ethical responsibility to honor its contracts. We are not part of the the Third World and we are not second-class citizens."


Manriquez added:


"Younger workers know that if we stand by and let the company run over retirees – some who are our parents and relatives – they’ll come right after us next. It’s that simple. It’s basic. We’re all in this together."


Eventually, over a dramatic period that included ASARCO’s path-breaking bankruptcy, retiree benefits were reinstated.

The threat of benefit-erosion posed by ASARCO was part of a complex array of issues and challenges that have faced the USW and partner unions. Through this period, the unions had to figure out how to deal with a company that was shape-shifting in front of them, and around them. In 1999 ASARCO was “bought” by its offspring, Grupo Mexico; in 2002 it shifted ownership of one of its prize assets – Southern Peru Copper —across the border to Mexico and in the same year it negotiated challenges from the Department of Justice regarding the realignment of its finances (for more information, see our bankruptcy section). Throughout this complex and less than transparent process, organized labor – specifically the USW – was realigning its political stance to better challenge ASARCO’s athletic company-complex.


Next: Labor Fights Back

Sources:

“Background on Asarco Ray Mines and Its Current Labor Negotiations,” Asarco Fact Sheet, August 11, 2005. Bargaining Committee (USW, Machinists, Electrical Workers, Pipefitters, Boilermakers, Millwrights) Schultz, Ellen, “Companies Sue Union Retirees to Cut Promised Health Benefits,” Wall Street Journal, pg A1, November 10, 2004.

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