Workers at Montana's largest miner reject 4-year contract they said could result in less pay

Industrials Associated Press

Union workers at Montana's largest mining company have rejected a proposed four-year contract that could have reduced their take-home pay, as Stillwater Mining Co. executives seek to cut costs amid declining precious metals prices.

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CEO Michael "Mick" McMullen and a union representative said contract negotiations would resume Friday morning. The current contract, affecting more than 900 workers, expires after Friday.

It would be extended barring a vote by workers to strike, McMullen said.

Miners went on strike following prior labor disagreements in 2004 and 2007 — an outcome both sides hope to avoid, said United Steelworkers International Union representative Steve Gentry.

"It is our intention to report to work as normal, and we expect our membership to go to work and work," Gentry said. "The company's position is they want to get a contract. So does the union."

Stillwater operates the nation's only two platinum and palladium mines, beneath the Beartooth Mountains. The metals are used in the construction of catalytic converters that reduce vehicle pollution and for other uses such as jewelry.

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The Billings-based company employs roughly 1,600 people and is chaired by former Democratic Gov. Brian Schweitzer.

The rejected contract did not include raises and kept health care and retirement benefits the same, Gentry and McMullen said. It would have changed production incentives, meaning miners could make either more or less money depending on their work and metals prices.

The union's negotiating committee recommended ratifying the agreement. The percentage of United Steelworkers Local 11-0001 workers who rejected the contract was not provided.

"It's really up to them to come back and tell us how far apart they think we are," McMullen said. "We thought we had a deal that was going to get us across the line."

Company officials have said slumping prices for platinum and palladium were forcing them to cut costs to stay competitive in a market dominated by mining companies in South Africa and Russia.

McMullen said he's seeking to promote the long-term viability of the mine near Nye and smelter and refinery complex in Columbus, by more closely aligning pay with productivity and prices.

But union members were angered that top company executives received recent raises and noted Stillwater remains profitable, with income of $70 million last year.

Workers at Stillwater's second mine, south of Big Timber, are covered under a separate contract scheduled to expire at the end of the year.

McMullen's 2014 total compensation topped $3.5 million, making him Montana's highest-paid CEO, according to company filings with federal regulators and a report released earlier this month by the AFL-CIO.

Stillwater's share price dropped slightly on the New York Stock Exchange after the news.