MAHONING VALLEY Officials paint a bleak picture of CSC's demise

The court was to decide today whether health benefits should continue for about 3,000 workers and retirees.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- A year ago, CSC Ltd.'s monthly payroll topped $4 million. This month, it's $620,000, and dropping.
The steel bar maker, which once reported average yearly sales of $200 million and captured 10 percent of the market in its product category, has seen sales revenues dwindle: $13.4 million in January; $10 million in February; $4 million this month.
Next month, sales will be zero.
CSC officials used those numbers to tell the story of the steel company's demise as they testified at the mill's first creditors' meeting Wednesday at Youngstown State University.
Facing deadline: The Warren company is under Chapter 11 bankruptcy protection, and its lenders have set an April 13 deadline for management to find a buyer willing to operate the mill. After that, the banks holding CSC's purse strings could ask U.S. Bankruptcy Court in Youngstown to sell the mill piece by piece.
Randy Lachowski, CSC president, said officials never expected it to come to this when they decided to seek bankruptcy protection in January. "We fully thought we would be able to preserve it as an ongoing business," he said.
But the company's lenders refused after the bankruptcy filing to release the dollars needed to keep CSC's steel-producing melt shop operating. "That was the beginning of the stranglehold," Lachowski said. "We tried our hardest to convince them it was the wrong decision."
Prospective buyers: Matthew Goldman, a Cleveland attorney representing CSC, said six prospective buyers are showing some interest in the plant and the company still hopes to sell it intact.
Lenders realize they'll get more money with an intact sale, he said, so he believes they'll be willing to forgo the April 13 deadline if there's a serious buyer "waiting in the wings."
Goldman said the company would not release salary figures for its top officials, as it is privately held. He said no "glitzy" bonuses or stock incentives have been paid to managers recently, however.
He said the company plans to propose a pay-to-stay plan to the lenders under which some key managers would receive compensation to stay with the company so that they can help a buyer restart the plant. Lachowski said he plans to resign and won't be included in that group because he believes a new owner would want to choose its own chief executive.
Health insurance issue: Meanwhile, company managers, leaders of Steelworkers Local 2243 and their attorneys conducted a long-distance conference call with lenders late Wednesday to try to resolve a dispute over health insurance coverage for more than 1,300 CSC workers, most of them laid off, and 1,600 retirees.
Judge William T. Bodoh of U.S. Bankruptcy Court in Youngstown has set a hearing on the matter at 2:30 p.m. today.
The lenders want to terminate the health coverage by Monday, arguing that the $170,000 weekly payment they're making to Anthem Blue Cross/Blue Shield is too much. CSC officials have argued that benefits should continue, as long as there are workers employed at the plant.
Lenders also want to stop sub pay, a supplement to unemployment compensation provided under the Steelworkers' collective bargaining agreement.
Can't get COBRA: John Kubilis, Local 2243 president, said employees and retirees do not qualify for COBRA, a provision established by law which generally requires to employers to provide continued health insurance coverage to former employees, at their cost, for 18 months.
COBRA doesn't apply in this case, Kubilis said, because CSC won't have a health insurance policy unless the company makes its insurance payment.
Lachowski said CSC has 50 hourly and 36 salaried employees still at work at the plant, charged with mothballing the equipment, collecting accounts receivable and working on the buyer search. Some products are still being shipped, but steel processing ended Friday.