THE VINDICATOR, YOUNGSTOWN
All sides praise the labor deal but say much needs to be done for LTV to survive.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Local plants probably would be spared under a proposed labor contract that calls for cutting 1,300 jobs at LTV Corp., a union official said.
The brunt of the cuts will come from LTV's steel-making plants, said Michael Rubicz, president of United Steelworkers of America Local 1375 in Warren. Nearly 500 of the cuts already have been identified, he said.
All or nearly all of the cuts would come through attrition and could include some in-plant contractors, said John Duray, a Steelworkers spokesman in Pittsburgh.
Locally, LTV has a coke plant in Warren which employs about 200, a pipe mill in Youngstown which employs about 80 and an office in Youngstown which employs about 40.
New contract: Union officials, LTV and company creditors agreed Friday to a new labor contract that covers about 7,700 LTV workers.
The union agreed to cutting the equivalent of 1,300 full-time workers, changing work rules to help plants operate more efficiently, postponing upcoming raises and changing health insurance plans to an HMO.
In return, the union will receive 20 percent ownership of the company and two of the 11 seats on the board of directors. Workers are to receive quarterly payments that amount to 20 percent of the company's pre-tax profits.
In light of LTV's financial troubles, the deal is good for workers, Rubicz said. While LTV doesn't have profits now, it will have to begin making money soon if it's going to survive, he said.
Duray said it will take a few weeks for a mail-in ratification vote on the agreement by union members. Details haven't been worked out, he said.
Besides worker approval, the agreement needs approval from Judge William Bodoh of U.S. Bankruptcy Court in Youngstown. After learning Monday that a few weeks are needed to prepare documents, the judge set a July 30 hearing to consider approving the agreement.
Technicalities on a few parts of the agreement, such as profit-sharing, still need to be worked out, lawyers said.
Motion: Friday's agreement followed an LTV motion last month to cancel the labor agreement so it could set its own contract terms. LTV was frustrated with negotiations with the union, saying it needed concessions to survive. The company's creditors stepped in and oversaw negotiations that led to the agreement.
David Heiman, an LTV lawyer, told Judge Bodoh that senior managers at LTV were involved in the negotiations and approved of the terms, but he said he didn't want to withdraw the motion to cancel the labor contract. He said that motion can be dealt with at the July 30 hearing.
Attorneys for LTV, creditors and the union said they were pleased with the labor deal.
"This is a very major step forward in the survival of the corporation," Heiman said.
Bankruptcy end: He cautioned, however, that much work needs to be done before LTV can emerge from bankruptcy court protection, which began in December. He said he was optimistic that LTV will be able to reorganize.
LTV said in a news release that the agreement allows it to operate with lower costs and cuts more jobs than the company's original proposal.
Richard Seltzer, a union lawyer, said LTV still needs a lender to make a $250 million loan under a federal loan guarantee program and it needs other government help to curb foreign imports.