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Wednesday, 21 November, 2001, 12:37 GMT
Cuts at US steel firm 'threaten 7,500 jobs'
Steelworkers
US steelmakers are facing tough times
A cash crunch has left the US's fourth largest integrated steelmaker unable to continue operating some of its steel plants, the company has said.

Cleveland-based LTV has asked for court permission to ignore agreements with the trade unions, and implement cutbacks and sell-offs which reports say could lead to 7,500 job losses.

More than 52,000 workers could lose their pensions and medical insurance, the Wall Street Journal said.

The move comes amid a crisis, blamed on cheap imports, among US steel firms, 25 of which are operating under bankruptcy protection.

'Necessary actions'

The LTV revival package includes halting integrated steel operations, and selling divisions making flat rolled steel, used for example in making cars and electrical equipment.

LTV headquarters
LTV failed to secure government loans

"These actions are necessary because LTV no longer has sufficient liquidity or sources of other capital to operate the integrated steel facilities," the company said.

The move would protect creditors from a debt default, LTV said, adding that metal tube production would be unaffected.

But the proposals angered workers, who have branded them "reckless and irresponsible".

A year-long struggle

LTV's fight for its life begun last December when it was granted bankruptcy protection by US courts.

"It has been clear since last year that the integrated steel unit needed to reduce wage and benefit costs to compete with non-union minimills and foreign competitors," LTV said on Tuesday.

Unionised steelworkers accepted measures to cut labour costs, while the United Steelworkers of America (USWA) union entered talks with LTV creditors.

But efforts to attract $250m in government loans failed despite support from state authorities.

LTV was "unable to obtain sufficient reductions" in wages and benefits to qualify for the cash, chief executive William Bricker said.

So LTV asked workers to accept measures including further pay cuts and job losses, plus greater employee contributions towards insurance benefits.

Angry workers

Tuesday's proposal came despite significant efforts by staff at all levels to preserve operations, Mr Bricker said.

"LTV's management and employees have done everything in their power to save LTV Steel," he said.

But Rick Shainoff, treasurer of the local steelworkers union, accused managers of attempting to "run the company into the ground".

"They've tried to basically just run the company out of business," he said.

USWA president Leo Gerard said: "LTV's management has engaged in unnecessary confrontation that initially cost it contracts... and ultimately threaten the livelihoods and health care benefits of tens of thousands of steelworkers and steelworker retirees."

See also:

20 Nov 01 | England
Steel city given more brass
23 Aug 01 | Business
14m boost for UK steel industry
19 Feb 01 | Business
European steel firms join forces
19 Feb 01 | Business
Europe regains steel top spot
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