ittsburgh Steel Corp., the nation's eighth-largest steel maker, have overwhelmingly approved a contract designed to save the company $35 million over the next 19 months.
Employes of the financially strained company voted 7,875 to 1,210, a margin of more than 6 to 1, in favor of the agreement.
The new contract affects 11,000 employes represented by the United Steelworkers union at 4 Wheeling-Pittsburgh plants in West Virginia, 3 in Ohio and 2 in Pennsylvania.
The vote marks the fourth time in five years that Wheeling-Pittsburgh workers have given back benefits to help the company stay in the tottering domestic steel business. The latest givebacks are designed to help the company retire nearly $360 million in long-term debt incurred in a modernization program that has been damaged by a steep decline in demand for steel products.
Wheeling-Pittsburgh sells the bulk of its steel to the auto, construction and appliance industries, all of which have have experienced significant dollar losses in the current recession.
The latest concession pact "doesn't solve all of our problems, but it certainly makes things a lot better," Joseph Scalise, Wheeling-Pittsburgh vice president for industrial relations, said yesterday. He said the greatest benefit from the new contract will be psychological.
Paul D. Rusen, president of USW District 23, which includes the 21 locals representing Wheeling-Pittsburgh workers, agreed yesterday that the company's commitment to steel production yielded the favorable vote.
"The members can see the company building new rails and casting machines. The company is not spending its money on Marathon Oil (a recent acquisition of U.S. Steel Corp.), and it has no money in savings and loan institutions. All of the company's money is in steel," Rusen said.
Most of the latest concessions--which Rusen prefers to call "investments in job security"--come from the sacrifice of two weeks of paid vacation time and 13 paid holidays over the next 19 months. Union-represented Wheeling-Pittsburgh workers received average hourly compensation, wages and benefits, of about $22.16. The new agreement will reduce that amount by a little more than $1 an hour.
In return, over the life of the agreement, most Wheeling-Pittsburgh workers will receive $4,000 in voting preferred stock. The company also has agreed to set up problem-solving teams aimed at giving its employes a larger voice in local plant decisions. Rusen said yesterday that the monetary tradeoff "is modest" in the way it affects the workers but he said the major thrust of the contract--to help Wheeling-Pittsburgh complete is modernization program--will pay off in increased job security.