UPDATE 1-Exxon rejects union proposals to end Texas refinery lockout

(Adds Exxon statement, background)

BEAUMONT, Texas, June 17 (Reuters) - Exxon Mobil Corp said on Thursday it rejected proposals by the United Steelworkers union to end a seven-week lockout at the company’s Beaumont, Texas, refinery.

Exxon locked out about 650 union workers on May 1 after a prior labor contract expired. It cited a risk of a strike by the USW-represented employees. The plant, which makes gasoline and Mobil 1 motor oil, has continued to operate using managers and replacement staff.

A union official confirmed the two sides met for about two hours on Thursday, but declined to discuss any proposals. No date for another negotiation session has been set.

“They told us: ‘We’re not compelled to move,’” said Mark Morgan, chairman of the negotiating committee representing union workers at the 369,000-barrel-per-day (bpd) refinery and lubricant oil plant.

In a statement posted online, Exxon said the company and union remain far apart based on Thursday’s meeting.

“The union provided five partial proposals which included items that significantly increase cost and do not meet the objectives we informed the union of in January,” Exxon said.

The company also said its lead negotiator was prepared to meet with the union’s lead negotiator next week.

The USW proposals were offers on specific issues the union was willing to make changes to if Exxon reciprocated on its issues, sources familiar with the matter said.

The company has insisted the union call a vote on its last proposal, which was made in April. Exxon said its proposal is needed to ensure flexibility to compete in low-margin environments.

The USW has refused to call a vote, saying Exxon’s proposal would eliminate seniority and create two separate contracts for the refinery and lubricant plant. (Reporting by Erwin Seba; Editing by Chris Reese and Peter Cooney)