The United Steelworkers (USW) has neither accepted nor rejected the latest contract proposal from Marathon Petroleum for a four-year labor agreement covering U.S. refinery and chemical plant employees, people familiar with the negotiations said on Monday.
The proposal, presented in negotiations on Sunday, would amount to a 15% increase in pay over the life of the contract for about 30,000 workers represented by the USW, according to the people familiar with the talks. In addition to the pay increases, the package would include a $2,500 signing bonus while keeping other terms unchanged from prior agreements.
Marathon is serving as the lead negotiator on behalf of a bargaining group of 26 companies that includes Exxon Mobil, Chevron and Valero Energy. Marathon is the largest refiner in the United States, accounting for 16% of national refining capacity, the sources said.
USW-represented employees operate sites that together represent nearly two-thirds of the country's refining capacity, measured against a national total of 18.3 million barrels per day (bpd). The contract reached between Marathon and the USW will also set the framework for contracts to be negotiated by other unions within the sector, the people said.
Marathon and the USW did not immediately respond to requests for comment on Monday, according to the people familiar with the situation.
The financial structure of Marathon’s most recent offer specifies an hourly wage increase of 4% in the first year, followed by 3.5% increases in both the second and third years, and a further 4% raise in the fourth year. Sources noted that the average pay for an inside operator at a refinery is about $50 an hour.
The USW’s National Oil Bargaining Program policy committee - the body delegated to approve any agreement - is planning a series of meetings with union members across the United States to review and discuss the Marathon proposal.
The last offer arrived hours after the existing contract was due to expire at 12:01 a.m. on Sunday. Ahead of that deadline, the Steelworkers agreed on Saturday to enact rolling 24-hour extensions of the current contract. Those extensions remain in place until either the union gives notice cancelling the extensions and signaling intent to strike, or Marathon gives notice of intent to lock out workers, the people said.
Context for markets and industry participants
The negotiations involve a significant portion of U.S. refining capacity and the outcome will establish terms used in subsequent talks across the sector.