Steelworkers had ‘no choice’ about $4 million loan to WHX
ALLENPORT – The union president at Wheeling-Pittsburgh Steel’s Allenport plant says workers had “no choice” but to contribute to a major cash infusion needed to keep the company’s mills operating.
Mickey Forte, president of United Steelworkers of America Local 1187, said to avoid a shutdown, the international union agreed to provide a $4 million loan to Wheeling-Pittsburgh’s parent company, WHX Corp.
Local 1187 represents about 365 Allenport laborers.
Last week, West Virginia lawmakers agreed to give Wheeling-Pittsburgh $5 million to ease the steel producer’s cash crunch. Ohio agreed to invest $7 million.
Those contributions are part of a $27.2 million package that includes a possible $5 million each from WHX Corp., iron ore supplier Cleveland-Cliffs Inc. and Wheeling-Pitt’s union employees.
Wheeling-Pitt operates mills in Beech Bottom, W. Va., and Ohio, and employs 4,100 union and nonunion workers.
Forte said the union decision was a “no-brainer.”
“We had no other choice,” he said. “As long as we’re operating, we still have a chance.”
Wheeling-Pitt officials say the package is necessary to help the nation’s eighth-largest integrated steel producer pay salaries and suppliers. The agreement was reached Thursday night.
“We have a package in place that I believe is going to be sufficient enough to allow us to be a survivor,” said James Bradley, Wheeling-Pitt president and chief executive officer.
The company is operating under Chapter 11 bankruptcy protection.
Local union presidents, including Forte, met Friday and unanimously agreed to provide the $4 million loan for 75 days.
The loan comprises 12.75 percent in wages, in addition to earlier salary cuts.
Salaried employees will contribute an additional $1 million in wages.
This loan will be repaid beginning March 31.
A statement to union members indicated that had the union refused to contribute, it “would have been pulling the trigger on a shutdown.”
The statement indicated that failure to contribute would have cost union jobs and ended health care for retirees, their surviving spouses and dependents.
Forte said he met with membership Monday to detail the agreement.
The West Virginia loan funds most likely would come from the state Housing Development Fund.
Wheeling-Pitt has until March 25 to complete a reorganization plan that would allow it to emerge from bankruptcy. The steel producer filed for bankruptcy in November 2000 and is talking to three other steel producers about a possible merger.
The company has lost more than $316 million since the beginning of 2000. It has employed weekly layoffs, temporary shutdowns and modified labor agreements to help cut costs.
A company official said the $27.2 million package is not linked to the reorganization plan.
Bradley said Wheeling-Pitt’s orders have increased in recent weeks. The increase was attributed to recent trade decisions involving steel imports and the closure of LTV steel mills in Ohio.
Both Forte and Bradley blamed the federal government’s response to the international steel dumping issue for Wheeling-Pitt’s troubles.
Forte said he believes Pennsylvania should follow its neighbors in West Virginia and Ohio in an effort to keep the company alive.
“I don’t understand how Ohio and West Virginia can both give millions and Pennsylvania isn’t contributing a dime,” Forte said.
The Associated Press contributed to this story.