Hope flickers in LTV's plan to close mills
The company's Tubular Division in Youngstown will continue to operate, but the Warren coke plant will close.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- LTV Steel officials say they still have hope the company can emerge from bankruptcy, despite LTV's surprise request to liquidate.
The nation's third-largest integrated steelmaker is asking the U.S. Bankruptcy Court here to approve a shutdown and sale of its integrated steel operations in Cleveland. Judge William Bodoh will schedule a hearing on the motion Dec. 4.
Motion: U.S. Rep. Dennis Kucinich, D-Ohio, filed a motion in U.S. Bankruptcy Court here this morning asking Judge Bodoh to block LTV's shutdown plans and to appoint a trustee to run the company.
"This company can come back. They have the facilities and the workers," Kucinich said. "There is no reason this company should be shut down.
Trumbull County Commissioner Joseph Angelo praised the lawmaker's efforts to stop an LTV plan that he said would "devastate many Northeast Ohio families." Angelo was at the courthouse with Kucinich and other area leaders.
William H. Bricker, chairman and chief executive, said LTV couldn't come up with enough cash to continue operating its integrated mills, where steel is made from scratch by melting iron ore. The company said it has 7,500 employees involved in basic steelmaking.
Youngstown plant: There was one glimmer of good news in the LTV motion, filed late Tuesday: LTV's proposal to halt operations would exclude its LTV/Copperweld Tubular Products plant on Poland Avenue in Youngstown and its Tubular Products headquarters, on Albert Street in Youngstown.
The Poland Avenue plant, which produces pipe for the oil and gas well drilling industry, employs about 55, though it employed 80 when the bankruptcy case was filed; the Albert Street headquarters office employs 40.
The tubular products division is a part of LTV Copperweld, an LTV subsidiary based in Pittsburgh which employs about 3,500. The company said it is seeking separate financing for LTV Copperweld and intends to continue its operations.
Company stance: Officials said in a news release that they believe the shutdown is the best way to preserve the value of the company's assets for its creditors and to protect the environment and the safety of the communities where LTV Steel operates.
Company spokesman Mike LaWell told a union gathering in Cleveland late Tuesday, "The negotiations process remains open. The negotiations remain active."
But another company spokesman, Mark Tomasch, said today that any new settlement would have to come quickly.
"This was not a ploy. The company is running out of cash," Tomasch said. "We've been warning the public and the employees that this could happen. Unless LTV can make further reductions, it won't be a viable company. Those are the facts."
LTV was obligated to file the petition because under current financial constraints, the company will never be profitable, LaWell said. But if the company can reach a new contract with its workers to save money, LTV may survive.
The steelmaker has a work force of 11,500 and operations in 17 states, Canada and Great Britain.
LTV's coke plant on Main Avenue S.W. in Warren is among the facilities set to close. Plans to cold idle the plant will leave about 200 workers jobless. Coke is coal that has had gases removed by heating, and is then used as an industrial fuel that burns with intense heat.
The Cleveland-based steelmaker's plan would halt operations immediately at its integrated steel mills in Cleveland and in East Chicago, Ind.
Union contract: LTV also is also asking the court to allow it to toss out its bargaining agreement with the United Steelworkers of America. Besides its effect on workers, that action would eliminate health benefits for thousands of retirees and have an uncertain effect on their pensions, said Marco Trbovich, a USWA spokesman.
Bricker said the decision to liquidate came after efforts to get more concessions from the USWA failed.
Members of the USWA approved a revised contract in August that contained major concessions and affected 9,000 LTV Steel employees, including 3,200 in Northeast Ohio.
Nevertheless, Bricker said the company learned recently that it had to cut costs further by reducing wages and benefit expenses to qualify for a $250 million government loan guarantee. The state had already promised $14 million toward the loan
"The company was not able to obtain sufficient reductions," Bricker said. "After so many months of commitment and hard work by all parties, it is very disappointing to find our road to success blocked at this critical time."
Labor leader: USWA President Leo Gerard blasted the decision as "reckless and irresponsible" and said LTV officials shut down operations while negotiations between the Steelworkers union and the LTV Creditors Committee were ongoing.
Gerard said the USWA is continuing to negotiate with the creditors committee and still hopes to come up with an agreement the federal Emergency Steel Loan Guarantee Board will accept.
LTV said it expected to continue paying wages and benefits for about two weeks until the plan to protect its assets is reviewed by the court.
Political leaders: Gov. Bob Taft told the Associated Press that he was disappointed. "I encourage labor and management to make absolutely every effort in arriving at a compromise for LTV to remain in operation. The state of Ohio is committed to the viability of this company and stands by its commitments if a compromise is reached," Taft said.
Imports: LTV blamed unfairly priced imports for driving steel prices to 20-year-lows when it filed for Chapter 11 bankruptcy protection in December. The company lost $272 million in seven consecutive unprofitable quarters before the filing.
LTV filed for Chapter 11 protection once before, in 1986, and emerged years later in 1993 with a new operating plan.
LTV is the second major area steelmaker in a month to give up its battle for survival. CSC Ltd. in Warren, a special steel bar maker, was sold piecemeal at an auction in Cleveland last month, leaving more than 1,375 workers jobless.
XVindicator staff writer Bob Jackson and The Associated Press contributed to this report.