YOUNGSTOWN Union, LTV battle over pact

About 3,500 people are still working at LTV's profitable divisions.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- After LTV Corp. wrapped up financing Tuesday to keep its two profitable divisions operating, it clashed with its union in court today over its attempt to cancel its labor contract.
Richard Shaw, an LTV lawyer, told Judge William Bodoh of U.S. Bankruptcy Court that LTV doesn't have the money to pay for supplemental unemployment benefits or health-care coverage for workers who have been laid off. The hearing was continuing this morning on the company's request.
Shaw said the company is trying to negotiate a contract with the United Steelworkers of America to cover workers at LTV Copperweld and LTV Tubular Products Co., which are continuing to operate.
Impact: Bruce Simon, a union lawyer, told the judge that canceling the contract would end 65 years of collective bargaining at LTV steel mills. A cancellation could lead to workers' losing their homes and cars and disrupt family life, he said.
Simon asked the judge if these hardships are worth the benefits that would come from not having a union at the mill. The company maintains the mills would be easier to sell without a union, he said.
Today's hearing on the union contract also affects tens of thousands of retirees, including about 6,000 in the Mahoning Valley. The federal Pension Benefit Guarantee Corp. has said it would cover basic pension payments.
The company is paying retirees' health-care costs out of a separate fund, but it has enough money to pay for those costs for only about eight to 12 months, said Mark Tomasch, an LTV spokesman.
Although the company intends to retain few of its 7,500 workers at LTV Steel, about 3,500 workers at Copperweld and the tubular products division will stay on the job.
LTV has said both Copperweld and tubular products are profitable and will continue operating until they are sold.
Production has stopped, however, at LTV Steel. Judge Bodoh was expected to hear a report from the company today on efforts to secure a $250 million loan guarantee to help revive it. The union received permission to hire a consultant two weeks ago to push for the financing aid.
Lawyers for U.S. Rep. Dennis Kucinich said they would ask the judge today to extend supplemental employment benefits and health care coverage to laid-off workers through the end of April.
Tuesday, Judge Bodoh approved financing arrangements for the company's other divisions at the request of lawyers representing LTV and its lenders. The tubular division is to receive $30 million in financing for 12 months from a group of lenders led by JP Morgan Chase & amp; Co. It received approval Tuesday for interim financing of $15 million, and another hearing on final financing is set for next month.
Copperweld received approval for a $10 million loan that it can use through Feb. 1. Lawyers said they are working with lenders led by General Electric Capital Corp. on an 18-month deal that would provide Copperweld with about $300 million in financing.
Although both units are profitable, neither has the cash to operate without the financing, said Bennett Murphy, an LTV lawyer.
Here's the situation: LTV says its steel-making operations have no future, however, because they have no customers and are nearly out of money. Bodoh has authorized idling two steel mills through Feb. 28 and a finishing mill until August with the hopes that a buyer can be found.
Two coke plants are being operated on low production until Dec. 28, when LTV intends to close them if a buyer isn't found.
These low production and idling periods were longer than LTV originally sought, but it agreed to extend them two weeks ago under pressure from the union and creditors.
Murphy told Judge Bodoh that this extension will cost $53 million, raising LTV's budget for maintaining these steel-related plants to $338.5 million.
shilling@vindy.com