Steel union urges workers to accept pact

WHEELING, W.Va. (AP) -- A new five-year contract proposal for workers at Wheeling-Pittsburgh Steel Corp. asks some 650 employees to consider a buyout program, while those who stay would take a 15 percent pay cut for 13 months.
Provisions of the tentative agreement with the United Steelworkers of America are spelled out in a 39-page summary mailed to the rank-and-file this week. More details are expected later this week from union headquarters in Pittsburgh, along with a ratification ballot to be returned by the end of the month.
In the summary to members, the presidents of the union locals urge steelworkers to consider the impact of their votes.
Approval of the contract is critical to Wheeling-Pitt's plan to emerge from bankruptcy by Aug. 15 and claim a $250 million federally guaranteed loan from the Royal Bank of Canada.
"If this proposal is rejected, the federally guaranteed loan to Wheeling-Pitt will not be approved and the company will idle the mills and begin a liquidation process," the presidents warned.
"We believe if that occurs, eventually someone else will reopen some of the facilities. But what a new company would look like and what the impact of months of idled and shutdown facilities would do to the equipment, the customers and the market is unknown."
John Saunders, president of Local 1238 in Martins Ferry, Ohio, said the contract gives the company its best shot at survival.
"We have to find a way to produce steel and be competitive under this agreement with an electric arc furnace," for which nearly half the loan money is intended, Saunders said.
Wheeling-Pitt, which filed for Chapter 11 bankruptcy in November 2000, employs 3,800 people in West Virginia, Pennsylvania and in Steubenville, Mingo Junction, Yorkville and Martins Ferry in Ohio.
'Dependent on steel'
"This whole valley is dependent on steel, and we have to preserve the steel industry here," Saunders said. "The next two years will be very fragile for the company and our workers. This is about giving it a chance."
The new contract would be retroactive to May 1 and expire Sept. 1, 2008.
The buyout program would allow up to 650 employees to leave the company with a severance payment of as much as $40,000, and in some cases, credit for years of service.
Those who remain employed would be divided into eight job descriptions within five job classes. The local presidents say that means workers will perform a broader range of duties, and promotions from one class to the next would bring raises.
The contract also proposes a new defined-benefit pension plan and would replace the insurance program that now covers Wheeling-Pitt retirees. Details of the replacement plan were not immediately clear Tuesday, but the change would be effective Oct. 1.