wLTV employees will vote on the pact by mailed ballot, and votes will be tabulated Aug. 28.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- It's been well over a decade since John Dzuroff and Steve Bator made steel, but the white-haired retirees were in the second row in U.S. Bankruptcy Court here, quietly rooting for the survival of LTV Corp.
Both former steel workers, the friends said they thought it was a positive development when Judge William Bodoh approved a new modified labor agreement Monday between LTV and United Steelworkers of America.
The plan is expected to save the troubled Cleveland-based steelmaker more than $1 billion over five years.
"We're trying to stay on top of everything. We've got a lot at stake," said Dzuroff, an Austintown resident who retired from LTV in 1984 after 38 years in the mill.
He said thousands of LTV retirees like him are still relying on the pensions, health insurance and life insurance benefits they earned in their years on the job.
Bator, who toiled for Republic Steel Corp. for 37 years before it became part of LTV, said he and his wife, Marian, of Girard, are still waiting for details on how their benefits will be affected by the revised labor pact.
"They're not telling us a lot yet, but from what I heard it seems to be working out pretty good," he said.
Agreement: LTV, its creditors and the union reached what they're calling a "consensual agreement" four weeks ago that would give workers 20 percent ownership in the company, two seats on LTV's board of directors and profit sharing.
In exchange, LTV executive Glenn Moran testified, the deal allows the company to cut its costs by borrowing $140 million from the union-negotiated Voluntary Employee Benefits Association to pay for health benefits and pensions. The money would be repaid when the company returns to profitability.
The plan also allows LTV to restructure managed health care to reduce its costs without reducing benefits and to cut staff by 1,300, mainly through attrition, reduced overtime and cuts in contractor labor.
LTV's 9,000 union employees will be next to vote on the plan. Steelworkers spokesman John Duray said ballots will be printed and mailed out this week, and the votes will be tabulated Aug. 28 at the union's Pittsburgh headquarters.
Compromise: Moran, LTV senior vice president/general counsel and secretary, said the agreement was a compromise, reached after desperate company officials asked the bankruptcy court to throw out the union contract. Without a compromise agreement, he said, union members would almost certainly have gone on strike, forcing the company to shut down.
"This was the best we could do, and it solves a major hurdle by saving us more than $1 billion," he said.
The company's unsecured creditors committee joined LTV and the union in supporting the agreement, while LTV's note holders committee and shareholders both filed objections to the plan.
No guarantee: Attorneys for the opposing groups complained there's no guarantee the plan will save enough money to assure LTV can become profitable again.
Moran acknowledged that the company had hoped to find ways to save $4 billion over five years, including $1.3 billion from the labor contract, and that the new labor agreement may fall short of that total.
Opponents also argued that the stock ownership provisions, board representation and other elements are inappropriate for a labor agreement and should have been included, instead, in LTV's restructuring plan.
Judge Bodoh said the deal is just one step, but a necessary one, if the company is to continue to work toward a reorganization. He noted that LTV faces a late August deadline to apply for loan from the Federal Emergency Steel Loan Guarantee program.
"The company looked at its situation and made the best possible agreement under the circumstances," the judge said. "Does it save as much as needs to be saved? We don't know. We can't wait to find out exactly how much it will save. The clock is ticking."
Operating under Chapter 11 bankruptcy protection since December, LTV is the nation's third largest integrated steelmaker and operates in 17 states, Canada and Britain.
Locally the company's operations include a coke plant in Warren, which employs 200; a pipe mill in Youngstown with about 80 workers; and an office in Youngstown with 40 employees.