By Erwin Seba
HOUSTON, Feb 3 (Reuters) - At tense meetings just daysbefore the first major U.S. refinery strike in 35 years wascalled on Sunday, union leaders grew increasingly pessimisticabout getting a new labor contract and a sizable wage increase.
"The chances of there being an agreement are that of asnowball in hell," one of them complained as the deadlineimposed by the expiring contract loomed.
Officials from Royal Dutch Shell Plc , thelead negotiator for oil companies, were repeatedly saying itwould be too hard to meet the union's demands for a newthree-year contract to lift pay and tighten safety practices,several union officials told Reuters.
But what most frustrated the United Steelworkers union (USW)was something they had never seen before: an intransigent Shell.
A Shell official declined to comment on the tone andsticking points of the negotiations that broke down on Sunday,leading to walkouts. Shell negotiators had made five offers thatwere all rejected by the union, and the company said on Sundaythat it was committed to resolving differences with the USW.
Late on Monday, Shell said representatives from the companyresumed communications with the union "in hopes of coming to amutually satisfactory contract agreement."
A union official said both sides met but no progress wasmade.
From the union's standpoint, Shell has always been the mostflexible of the oil companies, much easier to negotiate withthan Exxon Mobil Corp or Marathon Petroleum Corp.
In fact, the USW enjoys the right to pick which company willhead up negotiations and specifically chose Shell this year forits perceived flexibility. Shell forged deals with the union in2006, 2009 and 2012.
Those contracts were considered successes, especially aftera months-long walkout in 1980, a time people still talk about asa low point for disputes in the sector.
This year, however, was different. John Abbott took over asShell's refining chief in 2013 and Ben van Beurden became chiefexecutive officer in 2014.
This time, there were new faces on the negotiating team fromShell, and a 50 percent slide in oil prices sinceJune cast a shadow over the talks as companies slashed spending.
After days of friction, Shell cut off talks on Sunday, amove that stunned the union.
"We were very, very shocked," USW International PresidentLeo Gerard told Reuters on Monday. "Shell has been a responsiblelead company in years past. We have been able to have rational,reasonable negotiations with them."
Feeling they had no other option, the union called a strikeat nine plants with a combined 10 percent of U.S. refiningcapacity.
Mystified by Shell's change in tone from previous contracttalks, some striking workers on Monday said they think that oilcompanies, seeing that many older refinery workers are retiring,are trying to test the strength of younger union members.
Cutting off talks that began Jan. 21 may have just been aploy, they said, so that the companies can push for a deal thatlimits new costs - a move that would please nervousshareholders.
Indeed, some people picketing on Monday near Houston saidShell may have given the union a big head fake and that thecompany would soon reopen talks.
The union is seeking annual pay raises of 6 percent, doublethe size of those in the last agreement. It also wants work thathas been given in the past to non-union contractors to startgoing to USW members, a tighter policy to prevent workplacefatigue, and reductions in members' out-of-pocket payments forhealthcare. (Writing by Terry Wade; Editing by Lisa Shumaker)
