ALLENPORT - Steelworkers overwhelmingly approved a five-year contract with Wheeling-Pittsburgh Steel Corp. that should allow the company to restructure and emerge from bankruptcy after almost three years.
United Steelworkers of America officials Wednesday said members voted 1,875-545 to ratify the deal, which is critical to the company's plan to emerge from bankruptcy by Aug. 15 and claim a $250 million federally guaranteed loan from the Royal Bank of Canada.
At the Allenport plant, USWA Local 1187 President Rick Bergstedt said the contract was ratified by a vote of 194-65.
"Our members realized this is what we had to do to keep this company alive," Bergstedt said. "The men responded with responsibility to their families, companies and the community."
Bergstedt said the new pact will allow the struggling company to be the first integrated steelmaker to emerge from bankruptcy.
Wheeling-Pitt, which filed for bankruptcy in November 2000, employs approximately 3,800 people in West Virginia, Ohio and Pennsylvania.
There are about 280 rank and file members employed at the Allenport plant.
Union officials touted the agreement as one that could protect steelworkers' jobs in years to come by reducing the size of management, protecting pension benefits and modernizing plants.
"We have, for the first time in 20 years, the opportunity to take Wheeling-Pitt out of bankruptcy and put it on solid, long-term financial footing," said Leo Gerard, president of the Steelworkers union.
Gerard warned, however, that while the agreement provides an opportunity for Wheeling-Pitt, it will succeed only if tariffs on imported steel remain in place and health care costs are contained.
Wheeling-Pitt President and Chief Executive Officer Jim Bradley said the ratification brings the company very close to putting bankruptcy behind it. He said he was grateful for the way the union handled the negotiations.
The agreement calls for keeping wages at reduced levels until the end of May 2004, when raises will be instituted, union officials said. The deal also includes buyout offers for 650 employees so that the company can reduce its work force.
David McCall, the union's chief negotiator with Wheeling-Pitt, said all the buyouts will likely be accepted and management positions will be reduced by approximately 250 - a number Gerard said he would be aggressive about reaching.
The new contract is retroactive to May 1 and would expire Sept. 1, 2008.
The deal was a key component required for Wheeling-Pitt to claim the loan approved by the federal Emergency Steel Loan Guarantee Board. Without the loan, there were fears the bankrupt company would have to shut down plants and liquidate assets.
The deal will allow Wheeling-Pitt to become the first major integrated steelmaker to successfully emerge from bankruptcy since the current steel crisis began in 1998, union officials said.
Once the company clears bankruptcy, it will no longer be a subsidiary of New York-based WHX Corp. McCall said a new board of directors would be appointed.
The contract calls for dividing employee duties among eight job descriptions within five job classes, a change the union says will require workers to perform a broader range of duties.
Regular wage increases are expected to bring Wheeling-Pitt scales into parity with those at U.S. Steel by May 1, 2005.
The agreement also calls for development of a new defined-benefit pension plan. To be eligible, a worker's age and years of service must total 85 or higher.
The health insurance program for retirees would be replaced with a Voluntary Employee Benefits Association fund, which the union said would be paid with 40 percent ownership in the company. Following a $7.5 million contribution to the fund in the first year, Wheeling-Pitt would contribute to the retiree health care fund based on profitability.
Under a tentative agreement with the Pension Benefit Guaranty Corp., which moved in March to seize WHX's underfunded pension plan, that pension plan will be frozen - meaning Wheeling-Pitt workers will stop accruing additional years of service or additional benefits under that program.
Instead, they will begin accruing coverage under the Steelworkers Pension Trust, meaning virtually all retirees will get two pension checks in the future.
Staff Writer Stacy Wolford contributed to this report.
