Thursday, August 16, 2001
Cleveland officials also approved a package of loans, tax breaks and utility discounts for the company.
STAFF/WIRE REPORTS
WARREN -- LTV employees and retirees in the Mahoning Valley were to get details today on a revised labor contract hammered out by the Cleveland-based steelmaker and United Steelworkers of America and set for a vote by union members later this month.
A meeting was set for 3 p.m. today at the USWA Local 1375 union hall, 746 Elm Road N.E., Warren. David McCall, USWA District 1 Director and chairman of the union's negotiating team in talks with LTV, will explain the proposal and answer questions.
Numbers affected: Mike Rubicz, president of USWA Local 1375, which represents about 200 local LTV employees, said the proposed agreement would affect about 300 area workers and 6,000 to 7,000 retirees.
LTV, its creditors and the union reached what the three parties called a "consensual agreement" on a revised labor contract about six weeks ago.
LTV is operating under Chapter 11 bankruptcy protection, and company officials have tied its survival to USWA members' approval of the pact.
Judge William Bodoh of the U.S. Bankruptcy Court in Youngstown approved the contract revisions July 30, calling it a "necessary step" for the company's survival. LTV faces a late August deadline to apply for a loan from the Federal Emergency Steel Loan Guarantee program.
About agreement: The agreement would give workers 20-percent ownership of the company, two seats on LTV's board of directors and profit sharing.
In exchange, the company would cut its costs by borrowing $140 million from the union-negotiated Voluntary Employee Benefits Association to pay for health benefits and pensions, repaying the funds when the company returns to profitability.
The proposal would also allow LTV to restructure managed-care costs without reducing benefits and to cut staff by 1,300, mostly through attrition, reduced overtime and cuts in contractor labor. LTV officials say the changes in contract would save the company more than $1 billion a year.
USWA members will be receiving ballots in the mail, and the votes will be counted at the union's Pittsburgh headquarters Aug. 28.
Advancing funds: In a related matter, Cleveland City Council agreed Wednesday to advance millions of dollars in loans, tax breaks and utility discounts to LTV in hopes of keeping the company afloat.
The $4.5 million city loan represents less than 2 percent of a federal, state and county program to provide collateral for LTV's private loan. Key Bank and National City are lending LTV $250 million, Ohio is contributing $14 million and Cuyahoga County $5 million.
The loans will be put into an escrow fund that will grow to $32.5 million when the five-year loan is due, he said. If LTV is healthy then, the governments get their money back with 5-percent interest.
Council also approved a 10-year, 75-percent tax reduction for new investments. The cut will apply as LTV invests about $124 million in new machinery.
The third component, a water rate discount, is expected to save about $1.4 million on the company's $5.8 million annual bill.
LTV is the nation's third-largest integrated steelmaker and operates in 17 states, Canada and Britain. Locally the company has a coke plant in Warren with 200 workers, a pipe mill in Youngstown with about 80 workers and an office in Youngstown with 40 nonunion employees.