MORGANTOWN, W.VA. Government acts to take over steelmaker's pension plan

Most of the steelmaker's debt is owed to retirees.
MORGANTOWN, W.Va. (AP) -- The federal government is moving to take over the underfunded pension plan of bankrupt Weirton Steel Corp., according to an advertisement in today's editions of The Intelligencer.
The move would affect some 10,000 retirees and their dependents. The plant is across the Ohio River from Steubenville, Ohio, and employs many Ohioans.
The Pension Benefit Guaranty Corp. could not be reached to comment Monday night.
Spokesmen for the Independent Steelworkers Union and company said they hadn't been notified about the action but would contact the agency today.
The ad in the Wheeling newspaper provides few details but indicates the federal pension agency will take control of Weirton Steel's plan, which would guarantee at least some payment for the company's pensioners.
Weirton Steel is the nation's fifth-largest integrated steelmaker and No. 2 producer of tin. It sought bankruptcy protection in May after losing more than $700 million in five years.
At the time, more than half of its $1.4 billion in debt was owed to retirees. The pension plan was underfunded by $435 million, while the company had a $355 million shortfall in health care, life insurance and other benefits.
Two strategies
Weirton Steel intends to emerge from Chapter 11 bankruptcy protection by Dec. 31 and is pursuing two strategies for survival. One involves a sale to a larger company; the other hinges on approval of a federally guaranteed $175 million loan package and would keep the steelmaker a small independent producer.
Either path requires the reduction of about one-third of the remaining work force and the termination of the pension plan, the company has said.