Chevron pulls union workers from California refinery ahead of strike

© Reuters. FILE PHOTO: Chevron Corp's refinery is shown in Richmond, California August 7, 2012. REUTERS/Robert Galbraith

By Gary McWilliams and Erwin Seba

(Reuters) - Union workers were removed from a Chevron Corp (NYSE:CVX) oil refinery near San Francisco hours ahead of a deadline to begin the first labor strike at the gasoline producing plant in more than 40 years.

More than 500 United Steelworkers members were bussed out of the plant Sunday evening and replaced by non-union staff. No new contract talks are planned, said USW Local 5 First Vice President B.K. White in an interview.

The existing labor contract at the Richmond, California, refinery expired Feb. 1 and efforts since then failed to reach agreement. The union twice voted to reject the company's offers.

"The union’s demands exceeded what the company believes to be reasonable and moved beyond what was agreed to as part of the national pattern bargaining agreement," Chevron spokesperson Tyler Kruzich said.

Chevron, he said, "is committed to continuing to negotiate toward an agreement" and has taken steps to continue normal operations at the facility.

The last strike at the 245,000 barrel-per-day plant, which produces gasoline, jet fuel and diesel fuel, took place in 1980 as part of a nation-wide walkout.

NEGOTIATIONS FAR APART

"We are far apart" in reaching an agreement, said the USW's White. "It’s hard to negotiate when one side sees flesh and bone and other side sees the bottom line," he added.

The USW local has asked for a 5% pay increase above that agreed last month by its peers because of the higher cost of living in the San Francisco Bay Area. It also wants the company to add staffing to reduce the 60-70 hours that union members must sometimes work, White said.

The USW and most U.S. refiners last month reached a national agreement that provides a 12% pay raise over four years to the union's about 30,000 members at U.S. oil and chemical companies.

Each local union separately negotiates a contract covering plant-specific issues, and Richmond workers have twice voted down Chevron proposals.

Chevron non-union employees began taking control of refinery operations manned by union workers about 5 p.m. on Sunday, said White.

HIGH FUEL PRICES

California has some of the highest fuel prices in the nation with a gallon of unleaded regular gasoline on Sunday selling for $5.847 and a gallon of diesel for $6.258, according to motorist group AAA.

On Saturday, the union had advised machinists to go to the refinery and remove their personal tools before the contract extension expires.

Union members twice voted to reject Chevron proposals. The last vote, completed on Saturday, was overwhelmingly against what was called the company's last, best and final offer, according to messages posted on-line by USW Local 5.