Bankrupt LTV Says Can't Afford to Pay Benefits
YOUNGSTOWN, Ohio – LTV Corp. lawyers told a federal bankruptcy judge Wednesday that the company can no longer afford to pay the retirement and unemployment benefits of thousands of steelworkers.
LTV returned to court asking permission to void its labor contract, which would leave as many as 100,000 retired workers and family members without long-term health care, said company spokesman Mark Tomasch.
LTV attorney Richard Shaw told U.S. Bankruptcy Judge William Bodoh that required benefits such as supplemental unemployment pay, health insurance and pensions are costing the company $4 million a week, even though it is no longer making steel.
The company filed for Chapter 11 protection from creditors last Dec. 29. It has announced a plan to sell off its assets, but has agreed to maintain its steel mills in operating condition through February in order to make them more palatable to potential buyers.
U.S. Rep. Dennis Kucinich said he will ask the judge Wednesday to force the company to continue paying unemployment and pension benefits through February.
Bruce Simon, representing the United Steelworkers of America union, told the judge that the loss of benefits could have a devastating impact on workers.
"If history serves as a guide in these circumstances, some of us will lose our lives, or our marriages or the respect of our children," Simon said.
Steelworkers rallying outside the courthouse could be clearly heard in the courtroom as they chanted "U.S.A." and "Let's make steel."
Ray Tonsing, 55, who retired from the Cleveland mill in January after 36 years, carried a sign that said "Keep the Furnace Burning."
"I am trying to save my pension and hospitalization," he said. "It's like it's all up in smoke, but I do hope Congress will do something to help keep things going."
Mike Addante, 48, who was laid off as a crane operator in Cleveland last week, said he sees little hope of saving LTV.
"They are just wanting to liquidate and put money in their pockets," he said.
On Dec. 7, Bodoh approved temporary idling of steelmaking facilities at LTV Steel mills in Cleveland; East Chicago, Ind.; and Hennepin, Ill., which employed about 7,500 workers. LTV immediately stopped producing steel and began laying off thousands of workers.
Bodoh put off a final decision on the termination of the union contract and scheduled a hearing for Wednesday to discuss the company's financial situation.
Steelworkers and their supporters said they hoped to use the two-week delay to secure a $250 million federal loan guarantee that they say show the company can be saved, but they have made no progress.
"Everything that we had hoped would happen with that loan in that last two weeks has not come to pass," said state Rep. Tim Grendell.
U.S. Reps. Dennis Kucinich and Stephen LaTourette led a charge to insert aid to LTV into a national economic stimulus package, but that legislation has stalled.
The federal board that is reviewing the LTV loan guarantee has not said whether it will approve LTV's loan guarantee, and Congress has not passed legislation to change the rules to make it easier for the company to qualify.
LTV filed for Chapter 11 protection from creditors last Dec. 29. It has agreed to keep its furnaces in operating condition through February in order to make them more palatable to potential buyers.
As an integrated steel company, LTV handled the entire steel process from ore to scrap.