Cascade down briefly, then talks resume

Parent company Schnitzer Steel Industries, Inc. Q2 Earnings Conference Call is scheduled for tomorrow and there's a webcast to go with it. It will be interesting to see what they report this time.

The stock price is up a point, their leverage ratio is only 23%, and the PE Ratio of 44.78, shows strong investor confidence.

Their annual report for 2011 shows total revenues $3.4 billion, net income was $118 million, and 1 yr growth 2010 - 2011 of almost 100% in terms of income. Schnitzer acknowledged in April 2011 that they believe in Climate Change and expect it to affect operations.

The Q1 2012 levels also indicate payments for taxes and year-end bonuses. What did the they spend on Cascade Exec level bonuses? They expected operating income per ferrous ton to almost double 1Q12.

Schnitzer/Cascade are sitting very prettily.

They may decide what is best for business - behaving properly and renumerating their Union employees with a generous contract, or, they may attempt union busting/undermining and screw the local economy and many non-steel jobs in McMinnville. Actions speak louder than words.

While Cascade is making a lot of cash.lets mess with the workers that have busted their back to get them there.What ever did happen to the usa when the company took pride in taking care of their employees.Such a dieing breed in this country and this is a perfect example.GREED is a selfish and that indeed well bring us all to our knees.Cascade Steel set the example and show america that you care and stop being the bottom line.This company is not seeing red but black the more you give the more you will get out of your employees. Seek the lord as ask yourself,IS THIS IS WHAT HE WOULD DO?

Kathleen Blair and garr55,

Where are you getting your information? Why disseminate false information?

Cascade (Schnitzer's Steel Manufacturing business) had a loss in the last quarter of $868,000 which was better than their loss of $2,746,000 in the one year ago quarter.

Cascade Steel is a relatively very small part (less than 10 percent) of Schnitzer Steel.

This is the link for the above information:

http://www.schnitzersteel.com/news_releases.aspx?ReleaseID=1680520&Category=NA&ArchiveStatus=Current

And Cascade steel posts another quarter of losses yet the union pushes for pay increases...sad but it sounds like the union is gonna push this too far and end up just closing the plant. Would be horrible for the local economy...THANKS UNION!!!

if you would have listened to the earnings call, you would have heard them report that steel manufacturing was flat and part of it was due to december maintinance down time. also, there have been a couple lengthy mechanical breakdowns that have cost us production time because of what is known as "lean manufacturing". they dont keep parts in the store room to replace everything and it costs money to overnight ship parts from anywhere. schnitzer has also been doing capital improvements in different areas of the mill so that would also drop profits. we are also one of few companies that purchase our raw material from our parent company and can not negotiate the prices so if someone were to really dig into the books i feel they would find other money being hidden in this manner. so with improvements in some equipment, new equipment, maintinance, and mechanical breakdowns, it would show a loss. if you look at the manufacturing numbers, price per finished ton was up as well as amount of finished product was also up. so it is not the unions fault for the loss.

just me,

What you are explaining is part of every business. There are always costs for maintenance. The problem here is that all of the union people are exaggerating the situation, or making things up. It is important to present an accurate picture if the union expects to get any sympathy from the public. Very few people are union employees anymore. Only about 7 percent of the private sector workforce is union shop. The primary reason is that union demands do not fit the marketplace anymore. What business would want to function with union employees? Every union post on this forum has stated what a terrible place/business that Cascade Rolling Mills is for work. At some point this union behavior/attitude gets very old for employers. That is why there are so few union businesses left. The attitude is to fight the business rather than cooperate with the business.

Kona, yes there are always costs, but they also cut into profit, the company has spent money upgrading computers and buying new equipment. if a company makes $800,000, and spends over a million, then it would be showing a loss. the union has no control over the cost of any of that, or lack of parts. if you think you can go in and run the arc furnace with no experience and make proper grade steel guess again, there is knowledge and the physical effort, ideas that we have that improve the process. i dont know how you treat your workers that are willing to come up with better ideas but i bet if you just take them and not thank them in any way they dont like it. our company president jeff dyck received 7817 shares of stock between july and november of 11, and sold 2533 shares from november of 10 to november of 11 for $133933. if you average the price of the three seperate sales for the received stock, that comes to $403200. add it up and he received $537133 worth of bonuses, if he were running a company that is hemoriging money as you seem to indicate why did he receive half a million in bonuses? i dont know what his base pay is because i cant find it online. here is the link for the stock sales, http://www.marketwatch.com/investing/stock/schn/insiders?pid=48037. yes, we are luck to have a parent company that will front money for improvements, but, with some of the equipment and upgrades we may show a loss but production, that the union is doing, is increasing. they increase prices for transportation when fuel prices rise, and when scrap cost more, but all the workers in the community dont get that increase so the whole community suffers when there is less out there.

just me,

I am not taking a position whether, or not, Cascade employees deserve a raise in compensation. The problem I see is that everyone (the union employees commenting) are so eager to point out that Cascade is a terrible place to work and that management is the villain. I don't know why unions promote the adversarial relationship as much as they do, but they do. It is that attitude that has been so damaging for unions in the last few decades. It is why union membership is at an all-time low as a percentage of the workforce.

I don't think anyone is "blaming" the union employees for the lackluster results. The market for the products is the problem, just as with most businesses now. The medical insurance is for the benefit of the employees. Why should the company (Cascade) eat the increases in the insurance costs? It sounds like the employees are in agreement that Cascade should be saddled with the increased costs, rather than the employees who are the ones benefitting.

kona, we do pay 10% of our premiums and every year it does go up, since 07, what i pay a year for my percent has increased over $800. in 07 i paid $1031.94 a year. in 12 i will be paying $1862.90. the company now wants us to pay 20% of premiums which would equate to $3725.80 for the year, then it goes up again next year. with no raise, how do i pay other bills that i have for living expense? do you understand where the whole community suffers because there is less money out in the commuity, according to a website i found, a living wage for this area is $30.54 an hour, according to our pay scale in the last contract, no one in the union makes that kind of money. i will post the link as proof. the last few raises we have received have been eaten up by our medical insurance. if it were not for the union negotiating for these benefits, it would be even worse and that is what the union is trying to avoid. its not like we want $5.00 an hour more and everything free. just to be treated fairly. from 05 to 08 production workers got no raises and had to pay for insurance, in april of 08 we received 3.5% and again in 09 the same, in 10 we offered to extend for a year and not take the raise until the extension kicked in and that was the same amount. but no matter what we offered, our benefits continued to go up. in my opinion, we would be out there working double shifts, with less safety oversite, in worse conditions for a third less money and paying more for insurance. so the union has done alot of good and great things for us out there. here is the link i referred to earlier. http://www.livingwage.geog.psu.edu/counties/41071 .

oh ya, i forgot to also state that my 3.5% raise got me $1456 dollars more for the year, ( based on a 40 hour week, worked at a 52 weeks). that breaks down to $56 every two weeks and our insurance is now at $71.65 every two weeks. so in essence, we are going backwards in wages. it we accepted a pay freeze and double our premium thats even worse, agreed? so even our HUGE 3.5% raise doesnt keep up with inflation.

just me,

1) That "living wage" that you found is completely bogus. That is $61,080 per year. What do you call a "living wage"?

2) Your medical insurance payment of $3,725.80 is pretty small compared to the $14,914 that Cascade pays for your insurance. You should feel very fortunate to have that much paid for your insurance.

3) You are being treated very fairly, but the union has convinced you otherwise.

"we do pay 10% of our premiums and every year it does go up, since 07, what i pay a year for my percent has increased over $800."

This also means the company had had their contribution increase by over $8300 per employee in the same timeframe. Insurance is becoming unsustainable for both employees and employers. Take the $8300 and multiply by the number of union workers you have...how much more is the company shelling out just to cover healthcare benefits?

10% is also a very low number for an employee contribution. (unless you're a government worker.)

and just how much do you think a living wage is? what ever it is, in my opinion i think its bogus, at least i can site where i get the numbers from not just say it and think its so. since i have not had need to use my insurance in over five years, why cant i get a reduction in rates like auto insurance? hummm? as far as what i pay, i have a budget that is based on my wages, when more is taken away, where does the differance come from? the local economy suffers if there is no overtime available, and if there is then the relationship with family suffers. i have to drive a 15 year old truck because with other living expenses i cant afford a new fuel effeciant car payment. i challange you to have a mortgage, pay taxes and have a credit card, raise two teenagers with no second income, have your benefits double and then save for retirement and try to help your kids get ready for college, and have a car payment on a fourty thousand dollar a year salary. it breaks down to $1540 every two weeks before taxes. do the math and let me know what you could afford. in my opinion, people work to live, not live to work. after all the deductions from that $1540, you will have roughly $1200, give or take a little, to live on. that isnt living now is it?
is it fair that to make it to said living wage mentioned in your post, i have to work six days a week, 12 hours a day almost all summer and miss out on time with my family just so im closer to a living wage? another 3.5% raise and im still $20,000 short of that wage. do the math before you say its fair, oh ya, move out of mommys basement and pay your own bills.

dm, all we have to base what we pay is what the company says, i have never seen proof on paper other than a post from the company that says its going up. so there is a little bit of a trust issue. there is no need for any company to be paying this price for insurance, but cascade wont shop around and look for anything better either benefit or cost wise. besides, when i was hired on medical was part of the wage package, so if they want to give me what they pay for my insurance im sure i could find it for less on my own. as far as government workers, the only ones that should be exempt from paying for this for their families are our troops, both past and present and disabled.

when the cost of insurance is broken down from 26 payments to a 12 month cycle it averages $1552.42 a month per member and family. if you look at ehealthinsurance.com they have plans from roughly $119 all the way to $890 a month. the most expensive plan there is still $560 a month cheaper with a 0 deductable and a $25 doctor visit fee. these are the numbers that would apply to my family, other families plans would vary so why does cascade pay almost $600 a month more? no one knows. as far as wages, even the state of oregon gave minimum wage earners a 3.77% increase the first of the year ( http://www.oregon.gov/BOLI/2008_Minimum_Wage.shtml ) and go to the link for 2012 press release for minimum wage as proof.

just me,

I wish you luck in the negotiations.

I still don't know how you came up with "Cascade made roughly $9 million profit in the last year",

just me,

You probably need to look for a different job. You have explained in about every way possible how awful it is to work at Cascade Steel.

it was a math mistake kona, if you look at the reports in the last eight quarters we have been profitable in five of the eight. i made a mistake and didnt double check before typing, it should have been 6 mill roughly, and if they didnt make profit, why do i have check stubs that show they paid us profit sharing? as i said about todays report, we were in the red due to down time, capital expenditures and parts issues, primarily. as far as looking for another job, i know the hazards out there and accept them. i was just letting people know what is out there if they have never been inside. all i ask for is a fair wage package that reflects the knowledge of 15 years of experiance. i dont walk in to your business and tell you how to run it or what to pay your people, so im still trying to understand how you can tell us what is fair and what isn't. i dont know if you read the post about the insurance but if we are only paying 10% why is it i can find insurance that is almost the same, lower deductable and co-pays for over $600 less. maybe they could pay us the 100% and ill buy my own and pocket the almost $8000 differance. im just saying what the numbers say. i appologize for my mis-type on the profit. if you feel you need to see my numbers, let me know and maybe we can set something up so you can see the math.

"all we have to base what we pay is what the company says, i have never seen proof on paper other than a post from the company that says its going up. so there is a little bit of a trust issue." If you pay 10% and the company picks up the rest it's obviously in your union contract. If you have a trust issue ask your shop steward or business agent or go ahead and file a grievance. Don't throw out the company is evil and I don't trust them card. Your healthcare benefits are a large part of what is negotiated. If you want more money in your pocket and a lesser healthcare plan take it up with your union leaders. We went through the same thing where I work last year. We offered the union two choices...a lesser plan and more in pocket or their cadillac plan with less take home....the union picked the cadillac plan. We didn't care either way.

I have to agree with Kona, you obviously don't like where you work and are miserable so my advice to you would be to go elsewhere where you will be happy. Life is too short.

the company is the one that negotiates with the insurance provider, not the union, we agreed to pay 10% and we have, the union has no control over the provider or the cost. we have asked to look to other providers in the past and the company said no. and by your comments i can tell your a company person. i dont know what union you deal with or insurance company, but to me a cadillac plan would have very little deductable and no co pay. just my opinion, ours is not a cadillac but its not a yugo either. im sure you looked at differant providers as well as other plans too didnt you? or did they all come from the same provider? if the plan were getting better, it wouldnt be bad to pay a little more, but its the exact same as it was in 07. just more expensive.

Kona:

I, along with a CPA and an MBA read over Schnitzer's annual reports and 1Q, as well as drilled down into the market research available in databases across the Web. It's a legit analysis.

Kathleen Blair,

What is "a legit analysis"? Cascade Rolling Mills is a very small part of Schnitzer Steel. The last quarter (from their release yesterday) showed a loss of $868,000 for Cascade Rolling Mills.

Kona, if you read that release yesterday your magical, it was released today when they did their earnings call, which i happened to listen to. yes there was a $868,000 dollar loss, but if you would read more than the numbers it tells why.

Sales Volumes: Finished steel sales volumes of 112 thousand tons increased 5% from the prior quarter.

Pricing: Average net sales prices for finished steel products remained consistent with the prior quarter.

Margins: Slightly lower utilization and higher planned maintenance costs resulted in an operating loss of $1 million.
these are copied from the schnitzer web site. if you notice, production was up and sales were consistant with last quarter, so that leaves the margins. higher planned maintenance costes, thats also capital improvements approved by our parent company.
im sure you know that as equipment gets older its harder and more costly to repair or replace as parts become harder to obtain. it is up to the company to pay for this, so why should the workers have to pay for it?

You are correct the release date was today (April 5). Maintenance is part of a profit/loss statement. It can't be disregarded.

I still think you should look for a different job. You clearly don't like the company you work for and you don't like the work.

well, im glad i dont work for some one such as you that seems to think everyone is happy no matter what pitance is given them, and i do in fact like and enjoy my job. im willing to bet that there are things that dont make you happy or comfortable at your job too, but i dont tell you to look around. there used to be a time when loyalty between companies and workers went both ways, but its gone now for the most part, so that is why some unions are still needed. so im asking nicely, please dont tell me what i clearly do and dont like because you dont know me at all. thank you.

Ok, good luck in the negotiations and your job. I have appreciated learning how you feel about the situation.

You said, "you that seems to think everyone is happy no matter what pitance is given them". No, that is not what I think.

You said, "im willing to bet that there are things that dont make you happy or comfortable at your job too". You are correct.

To those who feel the union employees are well compensated already, I have this to say; yes, we do receive descent middle class family wages and benefits, but there is a reason for this. There is a 40 plus year legacy at Cascade Steel of union employees pushing, struggling, and fighting for better wages, better benefits, and safer working conditions. Now the company wants to cut virtually ALL benefits across the board. It is true Cascade is not asking for a pay cut, BUT wants a wage freeze. But in my mind it is a pay cut. Due to the constantly rising cost of living, by the end of the 4 or 5 year contract, it WILL be a pay cut. To Steve Bagwell, editor at the News Register: There is a reason the company has not divulged specifics. Cascade does not like negative publicity and they would probably not like the public to know how they have acted during these negotiations. It is my opinion this is another example of corporate greed, the rich getting richer and pushing the middle class into the working poor. Sometimes people need to fight to get what is fair.

The moral of this story is : Just don't be a Dyck.

The problem we are seeing in the economy in the decisions of people at all levels. Isn't that there isn't enough pie to go around. It's that everyone wants the whole pie and doesn't want to share any.

Like Bill on Fox said "Why should I share my pie".

that pretty much sums it up doesn't it?

Well, I have only one thing to say to that, if a person can't accept less so others can have a little more. Then we probably deserve the fate we will get from it when it comes crashing down.

Troy Prouty*

I think the real problem in negotiations (from the public's point of view) is the old fashioned bullying techniques used by the unions. It doesn't matter which union, there are the same accusations and name calling that get more intense as negotiations run their course. There is always the starting point of "union busting", "greedy", "no respect", "terrible place to work", "hardest job in the world", "unsafe place to work". Then there is a branching out of focusing on individual members of management, owners or board members to demonize. Then turning against anyone in the public who might show distaste for the union actions. It is always interesting when the union scenario plays out against school board members who are just there as a service to the community, but it is the same scenario.

The effect of this type of behavior has taken a toll in union membership. Very few union members are left (only seven percent of the private sector workforce). The adversarial/bullying relationship promoted by unions has lost its effectiveness. Unions have reached the self destruct phase of their history. The sympathy for this type of behavior is running thin.

kona, someone said yesterday about the negotiations being open and transparent. historically this local has had open negotiations where members could show up, sit down and watch the proceedings, with rules about outbursts and talking and making rude gestures. this time around the company demanded that they be closed, if the union did not agree, the company could just leave and refuse to negotiate. so then we, the members have to rely on what our reps tell us. and these reps are actual members of this local, and not some hotshots from out of town that just want to cause trouble. it is not the "hardest job in the world", but its not the easiest either. when a company losses money why is it the executives are still getting bonuses and stock options and they expect the people that do the work to take a loss? all the union is asking for is a fair shake so we can continue to work, provide for our families and support the community as a whole. if we are taking home less as one of the best paying jobs around, that means we will spend less in your business. so us losing money will affect every business in the area. we as a union have bullied no one. as everyone keeps saying, you have a choice where to work, if you dont want to be in a union that stands up for its workers then work else where. this mill has been union since it opened and i know a couple men that were working there in the early days. as i have stated several times, no one WANTS to strike but sometimes it is needed to prove a point.

These kind of negotiations always remind me of the Woody Allen monologue. When Woody was young he went to work in his father's grocery business. He learned his routine jobs fairly quickly. After a couple of years he decided that he and his fellow employees should be paid more. So he got them all together and they decided to join a union and get as much as they could from the old man. Woody rambled on telling the story for about 15 more minutes and then came to the punch line how proud he was to get everyone more money and couldn't understand why his father was upset that he (Woody) put him out of business.

I have no idea how the negotiations should end up, but I do know that business after business have decided that the union promoted adversarial relationship is not worth it. The ones that really get hurt are the future union members who will never be hired.

Like I said I wish you the best. I don't have a horse in this race, but I do find it very interesting. Times are difficult for most everyone these days. Thank you for your comments.

"The moral of this story is : Just don't be a Dyck."
Kathleen Blair, A comment like that really undermines the credibility of any other comments you have made.

Try as I might, I really don't understand the union thing...and my dad belonged to the sheet metal workers union for forty some odd years.
It seems to me that If you don't like what your employer is paying, you get a different job or start your own business. Could someone please explain to me why the workers don't do that? I genuinely would like to understand the point of view of the union worker.

mack, if you factor in having to drive to portland for any other high paying jobs that pay good you will still be losing money, even $2.00 or $3.00 and hour more. and being part of the working class, where do you suppose the start up capitol would come from? our wages only come to $40,000 a year or so. that puts us in the bottom third of the lower middle class. not all of this is about just wages, some of this is about language and working conditions and safety. if you owned a company, and it was ok safety wise, wouldnt you want it to be even safer? these are some of the issues. with the working environment presently there, 16 hour shifts would lead to fatigue over the course of the week. the union protects people from being fired just because. how would you feel if you walked into work one day, your boss said i dont like the tone you said good bye to me yesterday, your fired? these reasons and others are the reasons for unions. not every work place is like that because some companies respect their workers and treat the with respect. another point is, if it were not for unions most people would not be making the wages they make now, union or non-union alike. all we are asking is to be treated with respect and fairly. if you have other questions please post them and i will do my best to answer them for you.

just me,
Your answer does help me get a better feel for your perspective. Thanks for responding in a respectful manner. You sound like a nice person. I wish you well in the negotiations and hope things turn out fair for both sides.

Does anybody know if the wife of the union president is employeed by Cascade or is a union official? If not, it seems odd that an employees spouse is discussing labor and contract issues.

DM, the answer to your questions are no and no, she is however a paying associate member of the steelworkers. also, as a spouse of a member she is welcome to speak during rallies and such, as are my children and any other members family members. there is no telling what she was talking about when the photo was taken.

Mack: The moral of this story is still "Just Don't Be A Dyck." No, it doesn't undermine any credibility just because you try to label it that way. Attempted assassination by implication is intellectually dishonest of you and I think you are capable of better. I also think you need a better sense of humour. Try not to take yourself so seriously - nobody else does.

Here's what the News Register isn't reporting http://nwlaborpress.org/2012/04/usw/

"Schnitzer CEO Tamara Lundgren � a former JP Morgan Chase investment banker � was paid over $7 million in compensation in the company�s most recent fiscal year. In their recently expired contract, union steel workers were paid $18.79 to $29.71 an hour for work in searing heat and deafening noise....Schnitzer Steel is demanding contract take-backs, including proposals to: obligate workers to work 16-hour shifts; to curtail workers� right to have union representation during discipline' and to .double the amount workers pay for health insurance. The company says its bargainers are available only two days a week, four hours at a time. Management walked out of one bargaining session, refused to answer calls, and even drew the shades on the office window. A guard is posted outside the company president�s office, and escorts him to his car when he leaves the building.

At one point, union bargainers even overheard the company HR director on the phone asking someone, �Do you want us to keep screwing around with them?� "

NW Labor Press? Now that's an unbiased source for information. I know, I get it. Big company bad, poor worker abused and mistreated. $30 an hour sounds pretty good to me. I drove by the picketers this morning on the way to work and they all looked healthy and well fed to me. There are two sides to every story and all we're hearing is the labor side. I'm sure you're also aware Weingarten rights don't give workers right to representation when discipline is being handed out. It's when potential discipline is being investigated. It could be something as simple as the company has allowed a union rep to be in a meeting while a letter is being handed out and now they're saying they aren't going to allow it anymore, which is their right. A lot of corporate executives are overpaid, I don't know enough about Cascade to draw a conclusion either way, but if you don't like it don't demonize them, buy some stock and go to the shareholder's meeting and voice your opinion.

hey dm, the only ones out there that make even close to the $30 an hour are the electritions. maintinance makes about $26. the production workers are between $18 and $23. the production workers out number maintinace and electrical by far. and yes, a member may request representation when they are required to meet with management for investigations and discipline. and also for safety investigations as well.
as far as buying stock, if our wages and take home pay are going backwards after you figure in the insurance, how do you expect anyone to buy stock just to go to a share holder meeting, let alone try to plan to retire? if you would bother to look at the BOLI website, you would see that even they decided that the cost of living rose at a rate of 3.77% so they adjusted minimum wage accordingly.
there are a few items that are not included when figuring the cost of living out too, such as fuel and electricity, which are two of the big ones. dont ask me what person decided that but you kinda gotta have both to live. fuel to get to work and electricity to live. as far as the picketers looking well fed and healthy, we have had some great places here in town donate food and other items to us. as well as the fact its been three days.

What the News Register is not reporting: from http://nwlaborpress.org/2012/04/usw-4/

"A striking worker at Cascade Steel Rolling Mills was treated at Providence Newberg Medical Center today after a car driven by a security guard bumped him on the picket line. The incident occurred about 5 a.m. this morning at the west entrance to the employee parking lot outside Cascade Steel Rolling Mills in McMinnville. "�He put his bumper right up against my leg and then he hit the gas,� mill shop worker Lee Frakes said. Picketers called police, who took statements from witnesses, and cited the driver for failure to yield to a pedestrian � a traffic infraction. After the incident, Frakes said he tried to continue walking the picket line, but started to experience pain and numbness in his lower right leg. �It�s just really bad timing,� Frakes said. Frakes, 36, says his wife is due to give birth any day to their third child, and he can�t drive with his leg immobilized. Frakes says he�s disturbed by the incident, and says managers and non-union employees at the mill have been getting more aggressive in recent days. �I watched a guy almost get hit [by a manager�s car] the other day. He came in super fast, and if the guy did not jump out of the way, he would have been hit.�