(Bloomberg) — On the eve of a contract expiring for 30,000 oil workers across the U.S. late Saturday, Royal Dutch Shell P.L.C. representatives walked away from negotiations, according to the employees’ union.
Health care was the final point of contention that caused the talks to break down and prompted Shell, which was bargaining on behalf of all oil companies including Chevron Corp. and Exxon Mobil Corp., to withdraw, the United Steelworkers said. While Shell said it “resumed communications” with the USW on Monday, no progress was made, according to the union.
Leo Gerard, international president of the USW, said the union leaders were insisting on a discussion about lowering members’ annual out-of-pocket maximum of $7,500 when Shell threatened to increase workers’ contribution to health insurance premiums if they didn’t drop the subject.
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“That’s when our people said, ‘That ain’t happening, we’re not taking it off the table,’ and then they got up and left,” Gerard said Monday in a phone interview from Pittsburgh.
Ray Fisher, a spokesman for The Hague, Netherlands-based Shell, said by e-mail late Monday that the company met with USW representatives earlier in the day to take contract discussions further and wants to come to a “mutually beneficial agreement.”
“We continue to be committed to resolving the remaining issues,” Fisher said.
Less than three hours after the contract expired, the United Steelworkers said it had called a strike at nine U.S. plants, including seven oil refineries that make up 10 percent of the country’s capacity. It’s the biggest work stoppage at U.S. oil refineries since 1980. While only one of the plants on strike is shut, a full walkout of USW workers would threaten to disrupt as much as 64 percent of U.S. fuel output.