WEIRTON STEEL Retirees grow bitter over plan to end pensions

The struggling steelmaker says more than half its debt is owed to retirees.
WEIRTON, W.Va. (AP) -- John Guglielmo was furious last week as he wrestled with news that Weirton Steel Corp. wants to eliminate the pension, health care and life insurance benefits that he earned over 38 years.
George Sidezides was just plain baffled.
"Where did all the money go?" said Sidezides, who retired in 1990 and now, at age 75, depends on the nearly $900 a month in income. "It's baloney! The money was already there. I paid for my pension already!"
The two men and their wives are among some 10,000 Weirton retirees and dependents whose lives would change dramatically under the bankrupt steelmaker's plan to return to financial solvency.
"To me, when you go into your retirement, you're supposed to relax. I am not relaxed," said Guglielmo, 65, who retired six years ago. "I always knew in the back of my mind that this could happen, and I tried to have a backup. But you can't exist without money."
Retiree benefits
Weirton, the nation's fifth-largest integrated steelmaker, sought Chapter 11 protection in May after losing more than $700 million in five years. At the time, Weirton said more than half of its $1.4 billion in debt was owed to retirees.
Last year, the company paid nearly $31 million in retiree benefits, and it expects to pay slightly more than that this year, according to documents filed Tuesday in U.S. Bankruptcy Court in Wheeling.
In the reorganization plan, the company said its strategy will succeed only if it can shed those costs. The plan also calls for the elimination of 950 jobs -- one-third of the remaining work force -- and reduced benefits for those who keep their jobs.
"We are working very hard to save this company. As painful as the process is, the bottom line is we want to maintain a steel operation in the Northern Panhandle," Weirton spokesman Gregg Warren said Wednesday.
"It's going to be painful on both sides but what is the alternative to saving this company? ISG (International Steel Group Inc. of Cleveland) continues to get bigger and stronger ... it's squeezing the little guy out. We have to do something to compete," he said.
Sacrifices
In February, workers took a 5 percent pay cut and made other sacrifices to keep the company afloat. The 3,000 members of the Independent Steelworkers Union voted to forgo a planned $1 per hour raise and froze their accrued pension benefits to stop the company's liability from growing any larger.
Retirees were asked to make sacrifices as well. Former CEO John Walker had hoped to cut costs by $34 million by asking both active employees and retirees for health care givebacks.
Despite warnings that lack of cooperation could lead to bankruptcy, many retirees balked at the request to help cover the cost of health insurance with a $200 monthly deduction from their pension checks.
About 65 percent voluntarily agreed to the plan, but the company -- partly in fear of litigation -- decided not to impose the change unilaterally on the holdouts.
Union chief
ISU President Mark Glyptis, who opposed the bankruptcy filing, said the proposed cuts are just what he feared would result.
"We knew pensions could be in jeopardy. We knew the health care and life insurance of our retirees could be in jeopardy," he said Wednesday. "We had a great deal of fear."
Workers at Weirton Steel have watched as tens of thousands of steelworkers at other U.S. companies have lost benefits they once thought they would have for life.
The ISU plans a meeting with the rank-and-file, and separate meetings will be held with retirees to lay out the company's plans.
Sidezides, who retired after 30 years in the mill, will be looking for answers.
"That money was in a separate fund, and it belonged to us," he said. "What about all that money that was in escrow? What happened to that? Where did the money go that they had all those years?"
For Sidezides, the health care coverage is as critical as the income. He spends $648 a month on private insurance to supplement his pension plan, and two months after his third open-heart surgery, he spends about $7,000 a year on prescription drugs.
"How much does that pension mean to me? A lot," he said. "I'd have to cut my groceries. I'd have to cut my vacation. I'd have to cut my grandchildren's gifts. I'd have to cut everything."
Guglielmo, who suffered a heart attack several years ago and takes 10 pills a day, said his medications would cost about $1,000 a month. He still has a commercial driver's license, so he could get a truck-driving job if he had to make ends meet.
"But I don't want to," he said. "Not at this age."
For Guglielmo, who saw several friends die in accidents on the company railroad, Weirton's reorganization plan is about more than money. It's about betrayal.
A generation of steelworkers agreed to compromises in exchange for the promise of lifelong care for themselves and their families, he said.
Today, "There's a lot of hurt in Weirton."