Union workers will be asked to accept wage cuts and health-care plan changes.
WEIRTON, W.Va. (AP) -- Workers at Weirton Steel Corp. will be asked to make concessions, including wage cuts, under a new contract their union leaders say will help ensure the company's long-term survival in an increasingly competitive industry.
On Dec. 11, Weirton Steel shareholders rejected a plan that would have made the company more attractive to outside investors and clear the way for the purchase of a struggling or bankrupt competitor.
The day after, the company reopened its contract with the 3,200-member Independent Steelworkers Union. Negotiations have continued quietly since, ISU spokesman Dave Gossett said.
Weirton Steel is located across the Ohio River from Steubenville, Ohio, and employs more than 1,000 Ohioans.
ISU President Mark Glyptis plans a series of union meetings to explain the details.
Union workers will be asked to consider wage cuts and changes in their health-care plan. The company also wants workers to consider deferring a portion of their vacation pay until later in the year. Currently, workers receive their annual vacation pay in a lump sum, Gossett said.
Ballots have been mailed to union members and are to be counted Feb. 19, Gossett said.
The company also has tentatively cut a new deal with the Independent Guard Union, which represents a shrinking cadre of mill security guards, Gossett said.
Glyptis said negotiations have been difficult because the industry is changing quickly.
"But our union negotiating team believes we have fashioned a new agreement that will position the company to become more efficient and competitive and at the same time protect our steelworkers' jobs as well as pensions and benefits," he said Friday.
John Walker, Weirton Steel president and CEO, said that given the industry climate, "it's imperative we secure these improvements."
"It's technically correct to say we're seeking sacrifices from all employees," Walker said Friday. "However, I believe a more accurate term would be contributions. Our employees have an opportunity to contribute to the longevity of their company. It's an investment in their future."
Company and union officials alike have publicly acknowledged that Weirton Steel would be unlikely to re-emerge if it filed for bankruptcy.
Tariffs on some steel imports were designed to give U.S. producers time to recover and restructure, but domestic pressures on Weirton Steel are now as great as the foreign competition.
The new budget plan President Bush has proposed would cut funding for the Emergency Steel Loan Guarantee Program by $26 million. He also has proposed repealing a law that imposed some tariffs.
Meanwhile, some newly reformulated U.S. companies, mainly Cleveland-based International Steel Group, have been gaining a significant edge on Weirton Steel.
After LTV Steel filed for bankruptcy and decided it could not restructure, some of its assets were sold and reopened as ISG. It has created a model for the industry by dramatically slashing expenses.
On Thursday, executives with bankrupt Bethlehem Steel agreed to sell its assets to ISG as well. The $1.5 billion deal, likely to be approved by the Bethlehem board of directors today, allows the plant to stay in production and its workers to keep their jobs.
It also makes ISG one of the nation's largest integrated steel producers, with an annual capacity of 16 million tons.