Alton Steel workers face new uncertainty with talk of the company being sold

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UP FOR SALE? Workers inside the Alton Steel plant. Union members are wary about what the possible sale of the plant could mean. Alton Telegraph photo
UP FOR SALE? Workers inside the Alton Steel plant. Union members are wary about what the possible sale of the plant could mean.
Alton Telegraph photo

By CARL GREEN

Illinois Correspondent

Alton – For a decade, Alton Steel has been showing its industry how a small, independent company can succeed by cooperating with its workers instead of fighting them.

The company has had both strong profits and good labor relations, including agreeing to a contract extension earlier this year that was advantageous to both sides.

But a spate of reports that the company may soon be sold has employees very concerned, according to Terry Wooden, president of United Steelworkers Local 3643, which represents the workers.

“Everybody’s apprehensive, because it’s an unknown and not what we’ve had,” he said at the July 25 meeting of the Greater Madison County Federation of Labor.

Wooden was especially concerned that the company might be sold to a profit-hungry investors’ group instead of owners who would continue to invest in the plant and its workers. “They would just try to turn a profit and get out of it,” he said.

The new contract worked out this spring includes strong succession language that should protect the workers in any transition. “That’s to our advantage,” Wooden said.

The company president, Charlie Linnemeyer, said that even if a sale happens, the company would be careful about who might get it – and that it won’t sell to the kind of quick-buck group Wooden was concerned about. “You can’t pack up a steel mill and move it,” Linnemeyer said.

The interest is based on the company’s strong record of productivity and profits, he said. “We’ve been successful, we’re going to grow and that’s going to draw interest. They don’t want to shutter this place, they want to put money into this place.”

He credited the union workers and cooperation between workers and management for its strong record. “I like to say we’ve done it the right way,” he said. “Without that cooperation, we would have never been successful.”

Linnemeyer said there were no long-term plans to sell, but when a larger steel-industry company made an inquiry, they decided it was worth checking out, even hiring a New York firm to study the company and place a market value on it, something Wooden also described at the Federation meeting.

A NEW CONTRACT

So far, the company has been a model of good employee relations. It was only in May when the new contract was signed to replace one that was to expire Aug. 20.

The contract raises hourly pay rates by 3 percent in each of its two years, maintains the current health plan without worker contributions, and increases pension contributions.

After 97 percent of workers voted for it, Linnemeyer said  it would provide stable and predictable operating costs. Wooden has called the package fair and said it would help continue strong productivity.

Alton Steel emerged in 2003 out of the bankruptcy of the much-larger Laclede Steel. Attorney John Simmons, from a union family, was one of the chief investors and has become the majority stockholder. He is best known for the Simmons Law Firm, which has won settlements nationally for asbestos victims and supports cancer research and treatment programs. Simmons is also a major contributor to the “$5 for the Fight” fund, which helps out of work union members and their families facing financial crisis.

AUTO BUSINESS

Alton Steel makes custom steel bars, using flexible manufacturing techniques. Much of its production is for the automotive industry, making its location in Alton an advantage. It employs about 315 people and is now investing $1.7 million to upgrade its shipping facilities.

Linnemeyer has been in the steel industry since 1966, including 28 years with Laclede, and he joined Alton Steel 3½ years ago.

He said Simmons has been a steadfast friend to labor. “He felt a commitment to the facility because of the way it helped his family,” he said.

Wooden still has strong memories of the fall of Laclede Steel, so he remains wary about what might happen next.

“We’ve had a good relationship with John Simmons and the people who manage the company,” he told the Labor Tribune. “But it’s the workers who have made this company what it is.” 

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