Labor Wins Shareholder Votes
Decisions at Oregon Steel Reflect Union Pressure on
Wall Street
By Frank Swoboda
Washington Post Staff Writer
Thursday, March 4, 1999; Page E03
Organized labor scored a victory yesterday in its new campaign
to use its financial muscle on Wall Street to bring shareholder
pressure against corporations with protracted labor disputes.
Shareholders at Oregon Steel Mills Inc. voted overwhelmingly in
favor of laborbacked, though nonbinding, resolutions to make it
easier to oust the board of directors and wrest control from the
company, force shareholder approval of any "poison pill"
antitakeover proposals, and keep shareholder votes secret from
the company until the final vote has been tabulated. The company
indicated yesterday that it will try to meet the unions halfway on
some of the issues.
The vote results, certified yesterday by CT Corporation Systems,
showed the three labor resolutions winning the support of a
minimum of 10.7 million shares of the 14.3 million votes cast.
There are 25.7 million common shares outstanding.
"This is a 9.5" on a scale of 1 to 10, said Bill Patterson, director
of the AFLCIO's Office of Investment, who helped organize
labor's effort at Oregon Steel.
Oregon Steel is involved with the United Steelworkers of America
in a bitter strike at its Rocky Mountain Steel Mills plant in Pueblo,
Colo., that began in October 1997. The strikers have since been
permanently replaced. Oregon Steel's other mills in Oregon and
California are nonunion.
Last month, the AFLCIO announced it was keeping a public
scorecard on how investment managers voted on laborbacked
proxy motions, just as unions keep a scorecard on votes by
members of Congress. A low grade on the annual list could cost
money managers some of the business that labor pension funds
send to Wall Street.
A survey by Georgeson and Co., a New Yorkbased
proxysolicitation firm, showed that 43 percent of all shareholder
resolutions dealing with corporate governance last year were
introduced by labor unions.
American workers have approximately $6 trillion in retirement
assets such as pensions, stock plans and 401(k) savings plans.
Assets from union members total $350 billion, according to the
AFLCIO.
The company, which had opposed the labor resolutions, saw the
result quite differently. Company spokeswoman Vicky Tagliafico
said the vote was actually a victory because, by the company's
accounting, a majority of the shareholders either voted against
the resolutions or didn't bother to vote at all. She said failure to
cast a ballot was the same as a vote to withhold support for the
resolutions.
Patterson responded: "Any time you get 80 percent of the
shareholders that vote in a contest, I consider that a win."
Tagliafico said she expected the company board to make some
changes in the governance rules, but not the ones the unions
wanted. Failure to adopt the terms of the shareholder proposals
even though they are nonbinding is expected to set up a further
confrontation with the unions, labor officials said. But Patterson
said he was glad the company was going partway on the
governance issues. "We're going to push them forward," he said.
Patterson said the unions would continue their shareholder efforts
at the company, with possible efforts including a push for binding
shareholder resolutions, votes against current board members
and even running director candidates of their own.
© Copyright 1999 The Washington Post Company
