Workers approve flexible labor pact Company will emerge from bankruptcy

The new work rules will take time to work out, a union leader says.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- WCI Steel will get a fresh start Monday with new owners and a more flexible labor contract, but it still faces some internal struggles.
A new labor deal approved by hourly workers Thursday will allow the Warren steelmaker to emerge Monday from 21/2 years of bankruptcy court protection.
It won't be easy to implement the new contract, however, said Mike Rubicz, president of United Steelworkers of America Local 1375.
He should know. He thinks his support of the contract cost him his position. He was voted out of office last week after coming out in favor of the deal, which was negotiated by officials from the international union.
Opinions were so divided that the contract barely passed, 547-493, in the production and maintenance areas. Clerical workers passed it 29-4.
Rubicz said morale is bad because workers have received so little information as the bankruptcy case became a tug-of-war between WCI's parent company, Renco Group, and a group of noteholders owed $260 million.
Another concern
Workers also are concerned about how they will be affected by a reduction in job classifications and a reduction in the work force from buyouts, he said.
"The bottom line is that this contract requires more work from fewer people," he said.
Instead of having one job duty, workers will rotate among jobs within a large classification. Workers also will have more responsibility and less supervision as WCI switches to the "self-directed work force" that other steel mills have adopted.
"It will take some time to work out, no doubt about it," Rubicz said.
Tim Roberts, a company spokesman, said the contract calls for training on leadership and conflict resolution. He also noted that this is a pattern contract based on what has worked at other steel mills.
"Everybody will be given the tools they need to implement the new work system," he said.
The contract provides for a $50,000 buyout for up to 250 workers, reducing the hourly work force to 1,000.
Rubicz said it also sets limits on management so salaried workers will be cut from about 350 to 200 by the time the contract expires Nov. 1, 2008.
Though there will be big changes on the shop floor, operations at the corporate level won't change much, said G. Christopher Meyer, a WCI lawyer.
"In many ways, this is not a new challenge. It's going to be largely the same people running the operation," he said.
The noteholders have said they will retain senior management.
More details
A bankruptcy court judge approved the noteholders' reorganization plan last month, contingent on the labor contract's passing. The plan includes WCI's eventually becoming a company with publicly traded stock.
Meyer said management believes WCI can survive the next downturn in the steel industry, largely because of the new contract's flexible work rules.
Meyer said most unsecured creditors' claims will be paid next week. They are to receive between 20 cents and 22 cents on the dollar, or between $8 million and $10 million.
Rubicz said some workers also didn't like the contract because it calls for more out-of-pocket medical expenses.
Most workers will receive pay raises as they are moved into new job classifications, and no one will receive a pay cut, he added.
The new wages range from $15.91 an hour for a utility person to $21.75 for a senior operating technician. The contract calls for 3 percent raises March 31, 2007.