USW Says It Won’t Give In on LTV’s Plea for More Cuts : Veteran Mediator Called Into Steelworkers’ Talks With USX

Bargainers for the United Steelworkers and LTV Steel Co. met behind closed doors Friday to explore the troubled steelmaker’s request to renegotiate a 7-month-old contract that slashed wages and benefits.

Union leaders, who spoke to reporters before the session on condition they not be identified, said they were unconvinced that LTV needed concessions beyond the $3.60-per-hour average savings that it won last April.

“We’re certainly not going to be making any negotiating proposals nor are we prepared to entertain any,” one senior union official said.

The Steelworkers and USX Corp., meanwhile, sent their top bargainers to Washington to meet Friday with veteran mediator Sylvester Garrett, named Thursday to help settle a 141-day-old work stoppage by 22,000 union members.

A company source said the secret session was intended to lay ground rules for Garrett’s role in trying to end the longest Steelworkers walkout in history.

USX, which owns the nation’s largest steelmaker, is seeking wage and benefit concessions comparable to those the union granted earlier this year to LTV and other major competitors. It also wants to cut its full-time work force.

Bankruptcy Law as Leverage

But even as USX tries to catch up, LTV hopes to pull further ahead on labor costs by using leverage afforded under Chapter 11 of the U.S. Bankruptcy Code.

The Cleveland-based steelmaker’s parent, LTV Corp., filed for reorganization July 17, citing more than $4 billion in debts.

LTV asked the union to reopen contract discussions, and the Steelworkers said the bankruptcy law essentially compelled them to talk with the company. If the union refused to meet or if negotiations were held and failed to produce a settlement, LTV could seek bankruptcy court approval to dissolve the contract.

“That process has not begun,” said one Steelworkers adviser.

One measure of the depression in the oversupplied steel business is that even a 4 1/2-month shutdown of the largest producer has done little to pull second-ranked LTV out of its predicament, a union economist said.

“Any significant pickup in the economy would do a lot more for them than the absence of USX,” he said.

Union leaders say that before going to bankruptcy court, LTV likely would try to persuade the union that further concessions are necessary to save the steel unit because court approval to dissolve the contract also would free the union to strike.

Understand Union’s Mood

“This is a company that very much knows what it’s doing in labor relations. It’s very capable of assessing the mood of our members” and realizes the importance of continuing to operate its plants, said another union official.

“The worst-case assumption is that at some time . . . these modifications are necessary,” the union adviser said.

Before that issue is resolved, the union may have to deal with the termination of two pension plans covering 45,000 LTV retirees and surviving spouses.

The two plans, covering Steelworkers members, are underfunded by $1.8 billion, the Steelworkers told retirees in a recent letter.

Although there is enough money in the plans to pay benefits for several years, the liabilities could grow significantly over those periods.

At a meeting in Cleveland late last month with company, union and congressional representatives, Kathleen P. Utgoff, executive director of the federal Pension Benefit Guaranty Corp., said the agency might take over the plans within weeks to avoid even greater losses later, according to an attorney who attended the meeting.

The attorney spoke Friday on the condition that he not be identified. Officials of the PBGC, which insures pensions for 38.5 million active and retired workers, have declined public comment on their intentions in the LTV case.

About 7,000 LTV pensioners stand to lose $400 per month in supplemental benefits if the PBGC steps in, and all would lose health and life insurance provided under the plans.