Success Story: Severstal Warren

Overview

In 2004, WCI Steel Inc. was working its way through Chapter 11 bankruptcy. A critical part of that process was negotiating a new contract with its workers, represented by the United Steelworkers of America (Local 1375).

Nine years earlier, the company had endured an bitter 54-day strike, punctuated by incidents of physical violence. But by 2004, both labor and management recognized the realities of the highly competitive international steel market: the company had to change or die. The new labor agreement included a key provision: the plant had to turn out more steel with 250 fewer workers.

"In this contract, the union took a proactive stance," says Jim Courim, a union official and Training Coordinator for Severstal Warren. "We said the only way we can survive in a global economy is if we work together. And, in working together, we [the union] have to have some authority in how things are going to work."

Jim Courim, Training Coordinator for Severstal Warren, worked his way up the ladder starting as a machinist. As a result, he has an intimate knowledge of the job structure at the plant, and is uniquely placed to contribute to the development of training programs that will broaden the capabilities of USW Local 1375 members.

Union members approved the contract in July 2004, but it was not until the bankruptcy process ended in 2006 that management and labor could begin actively collaborating on a new system to achieve those goals.

One contractual requirement was to reduce the number of "Maintenance" classifications from 20 to just two: Maintenance Technician Mechanical (MTM) and Maintenance Technician Electrical (MTE). In addition, a new program called Maintenance Assist was developed with the goal of building flexibility into the production process by making most plant employees available to perform assistive maintenance whenever needed.

For example, if a production line had to be stopped for maintenance, instead of an entire work team sitting in the break room waiting for a maintenance team to arrive, members of that team would already be qualified to perform a variety of tasks.

The new system would carry two productivity-boosting benefits:

• less time lost waiting for maintenance help;
• faster repairs to a production line resulting in less downtime.

"The goal here is to reduce downtime," says Courim. "If we can get more hands on equipment to get it running faster, then we reduce downtime, we increase yield and profitability goes up."

Jim Courim (left), Training Coordinator, and Fred Speerstra, Continuous Improvement Trainer, discuss progress for the new training programs being developed for USW Local 1375 workers with the assistance of MAGNET consultants Becky Kemp and and Mary Ann Pacelli (far left).

Union leaders recognized that achieving these goals would be no small task—the company had nine operational areas/departments and more than 500 employees who might require training. So WCI Steel called on MAGNET (then known as CAMP) to help create and implement a Training Plan.

Approach

The WCI Training Committee, consisting of 5 union and 3 management representatives, began working with MAGNET consultants Mary Ann Pacelli and Becky Kemp in January 2006. Their objectives:

• Design a training plan and internal certification for the Electrical and Mechanical Maintenance classifications
• Develop training to support the transition of all employees to the identified competencies in each skilled classification

MAGNET consultant Becky Kemp explains the importance of the project development process mapped out in detail on the white board behind her.

Pacelli and Kemp led the WCI Training Committee through a step-by-step process go achieve those objectives.

1. Conducting a Training Needs Analysis.
2. Producing a Gap Analysis.
3. Producing a Training Plan Design
4. Implementing the Training Plan Delivery process.

The WCI Training Committee identified a team of four individuals to assist with the Training Needs Analysis and named the union's Jim Courim Training Coordinator. Working with the consultants, Courim and his team learned how to document the work activities necessary for all key tasks. This involved reviewing existing documentation, operating procedures and manuals; observing employees performing the activities; and interviewing employees to review task documentation.

Three of the customized training manuals created during the project. The manuals reference the specific equipment and products WCI Steel employees will use and codify the company's own best practices.

In August 2006, the team began evaluating nearly 300 employees to assess their skill competencies.

"This helped us come up with a list of priorities," says Courim. "For example, we found that all the maintenance staff really needed some welding training. Within six months, we had stripped and refurbished an old welding lab that had gone into disrepair and bought all new machines."

Evolution

Within a year, approximately 120 employees had been trained in basic welding techniques and received state certification.

Courim says MAGNET consultants Becky Kemp and Mary Anne Pacelli taught union coordinators the principles of instructional design and how to create their own customized training materials appropriate to WCI Steel's manufacturing process.

Welding instructor Jim Miller shows Jim Courim one of the welding student's test pieces. After designing the new welding training manual, Severstal Warren and USW Local 1375 completely refurbished an old suite of welding rooms so they could be used by trainees. Jim Miller: "You could read a book for weeks, but you won't be able to weld. In this lab, I can show them how. These guys work their hearts out. Every time they pass the test, I pass the test." Jim Courim: "Because of these classes, when something breaks—instead of having to stop, call the shop, send a welder—now one of the workers just grabs a hood. They can be confident enough in their ability that they can do that job."

"We could always go out and buy some canned textbook on welding," Courim observes. "But it's too basic. Now we can use digital photography right here in the plant and create PowerPoint presentations for our classes that include our own safety procedures. We can visually document our plant's best practices."

Within a year, WCI's two training programs had grown to 19 and more than 1,000 individuals had been trained in various aspects.

"What we've done here is a cultural change," says Courim. "We're taking a guy and saying: 'Yesterday you just did this. Tomorrow, you're going to do any part of this.' Any time you have a cultural change like that you're going to have resistance.

MAGNET consultants Mary Ann Pacelli (left) and Becky Kemp tour the welding training shop where USW employees put what they learn in the classroom into practice. Pacelli and Kemp have spent more than two years helping the union and the company analyze tasks and develop cross-training programs that allow former laborers to expand their skill sets. As of May 2008, the project had created an estimated ROI of more than $3,340,000 by reducing downtime at the plant.

Epilogue

In 2008, Moscow-based OAO Severstal bought WCI Steel and the Warren facility was renamed Severstal Warren. The new training program was deemed so successful, it has been incorporated into Severstal's continuous improvement program.