The United Steelworkers made partially good on their strike threat earlier Sunday morning as negotiations between management and the union failed to produce a new contract.
The union called a strike at nine of the 65 fuel-making plants the union represents and stated the other 56 refineries are on a “rolling 24-hour extension”—meaning the union could call them out on strike at any time.
In all, the 65 plants account for nearly two-thirds of the nation’s refining capacity.
The union, on its website, is blaming management for the partial-industry strike.
“Shell refused to provide us with a counter-offer and left the bargaining table,” said USW International President Leo W. Gerard. “We had no choice but to give notice of a work stoppage.”
The remaining USW-represented refineries and oil facilities are operating under a rolling 24-hour contract extension. The USW represents 65 U.S. refineries and over 230 refineries, oil terminals, pipelines and petrochemical facilities in the U.S.
According to the union, Shell—the company leading the industry-wide bargaining—has made numerous offers to the union, all of which have been rejected.
The USW rejected Shell Oil Company’s last offer. It was the company’s fifth offer to the union. Shell is the lead company for the National Oil Bargaining talks. National negotiations focus on establishing a pattern on wages, benefits and working conditions. Local union and unit negotiations focus on local issues at the particular facility.
As Wall Street Journal notes:
This year’s negotiations take place against the backdrop of an oversupplied oil market that has pushed down the price of crude by nearly 60% since June, prompting oil-field layoffs and budget cuts by many energy companies. Gasoline and diesel prices at the pump have plunged and many refiners are worried about their profit margins, though companies have reported stronger than expected fourth-quarter profits.
If the union expands its strike, it seems likely that it will eventually affect gas prices as supplies begin to dry up.
The question remains, will the union and refineries settle their differences before consumers begin paying the price at the gas pump?