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 "The chances of there being an agreement are that of a snowball in
hell," one of them complained as the deadline imposed by the
expiring contract loomed.
Officials from Royal Dutch Shell Plc <RDSa.L><RDSa.N>, the lead
negotiator for oil companies, were repeatedly saying it would be too
hard to meet the union's demands for a new three-year contract to
lift pay and tighten safety practices, several union officials told
Reuters.
But what most frustrated the United Steelworkers union (USW) was
something they had never seen before: an intransigent Shell.
A Shell official declined to comment on the tone and sticking points
of the negotiations that broke down on Sunday, leading to walkouts.
Shell negotiators had made five offers that were all rejected by the
union, and the company said on Sunday that it was committed to
resolving differences with the USW.
Late on Monday, Shell said representatives from the company resumed
communications with the union "in hopes of coming to a mutually
satisfactory contract agreement."
A union official said both sides met but no progress was made.
From the union's standpoint, Shell has always been the most flexible
of the oil companies, much easier to negotiate with than Exxon Mobil
Corp <XOM.N> or Marathon Petroleum Corp <MPC.N>.
In fact, the USW enjoys the right to pick which company will head up
negotiations and specifically chose Shell this year for its
perceived flexibility. Shell forged deals with the union in 2006,
2009 and 2012.
Those contracts were considered successes, especially after a
months-long walkout in 1980, a time people still talk about as a low
point for disputes in the sector.
This year, however, was different. John Abbott took over as Shell's
refining chief in 2013 and Ben van Beurden became chief executive
officer in 2014.
This time, there were new faces on the negotiating team from Shell,
and a 50 percent slide in oil prices since June cast a shadow over
the talks as companies slashed spending.
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After days of friction, Shell cut off talks on Sunday, a move that
stunned the union.
"We were very, very shocked," USW International President Leo Gerard
told Reuters on Monday. "Shell has been a responsible lead company
in years past. We have been able to have rational, reasonable
negotiations with them."
Feeling they had no other option, the union called a strike at nine
plants with a combined 10 percent of U.S. refining capacity.
Mystified by Shell's change in tone from previous contract talks,
some striking workers on Monday said they think that oil companies,
seeing that many older refinery workers are retiring, are trying to
test the strength of younger union members.
Cutting off talks that began Jan. 21 may have just been a ploy, they
said, so that the companies can push for a deal that limits new
costs - a move that would please nervous shareholders.
Indeed, some people picketing on Monday near Houston said Shell may
have given the union a big head fake and that the company would soon
reopen talks.
The union is seeking annual pay raises of 6 percent, double the size
of those in the last agreement. It also wants work that has been
given in the past to non-union contractors to start going to USW
members, a tighter policy to prevent workplace fatigue, and
reductions in members' out-of-pocket payments for healthcare.
(Writing by Terry Wade; Editing by Lisa Shumaker)
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