WCI BANKRUPTCY Many workers can't wait for case's end, USW rep says
Lawyers huddled throughout the day to try to settle the bankruptcy case.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
AKRON -- Even with a potential $50,000 buyout waiting to be approved, about 90 workers recently have retired from WCI Steel.
They were unable to wait for the company's bankruptcy case to conclude even though the steelmaker intends to provide a retirement incentive, said Dennis Brubaker, a staff representative for the United Steelworkers of America.
The case may be nearing a conclusion this week in U.S. Bankruptcy Court here, but no one is sure. This is the third time a reorganization plan for WCI has made it to confirmation hearings.
Workers constantly are asking if the case will end soon so they can make plans, Brubaker said.
"This case has been going on for 30 months. I'm not going to tell them it will be over in three months. No one's going to risk their credibility on that," he said.
This week's hearings involve a plan for WCI to be operated by noteholders who are owed $263 million.
The hearings are scheduled to continue through Wednesday, although lawyers and others met outside the court throughout the day Monday in an effort to settle the case. Lawyers didn't disclose any information on the talks, other than to say they are complicated.
Parties involved
Creditor groups, the union and federal pension agency were involved in addition to noteholders and Renco, WCI's parent company.
The union has a tentative labor deal with the noteholders that calls for up to 250 workers to agree to leave the company with a $50,000 payment. Workers with the highest seniority would have the first chance to take the offer, but younger workers could accept it if spots are still available.
Union officials said many workers' decisions would be affected by whether they are allowed to receive pensions under the current WCI plan while still working for the new company, which is known as double dipping.
Steven Strom, who testified most of the day on his study of the value of WCI, said he thinks 250 workers will leave with the buyout, even if they are allowed to double dip. Strom is managing director of CIBC Worldwide Markets.
Higher productivity expected
Patrick Tatom, WCI president and chief executive, said during a break that he expects productivity of the new company to be 40 percent higher than it was 10 years ago.
The number of work hours needed to produce a ton of steel will fall dramatically because of the proposed labor deal, he said. Not only would there be fewer workers because of the buyout, but the number of job classifications is being cut from 32 to five, he said.
By allowing workers to handle different duties, the mill can become more efficient, he said. The mill has 1,250 hourly workers.
Brubaker said the tentative contract will provide raises for all workers. Some will receive significant raises because the reduction in job classifications will push them into a higher-paid classification, he said.
Competing plans
Before workers vote on the contract, Judge Marilyn Shea-Stonum must decide whether to approve the noteholders' plan.
Renco opposes that plan. It had submitted its own reorganization plan, but David Dichter, a Renco lawyer, said at the start of the hearing that he planned to ask for its withdrawal because no action was being taken on it.
Monday's hearing focused on the value of WCI, which will determine the value of stock and notes that creditors receive when the case is completed.
Strom was questioned for hours by Howard Hawkins, a Renco lawyer, but he was chastised by the judge for taking a "markedly inconsistent position." When Renco was pushing its own plan earlier in the case, it argued for a lower value of the company, but now Renco was asking why the noteholders didn't value the company higher.
shilling@vindy.com