The deal, which had been worked out by the company, its committee of unsecured creditors and the United Steelworkers of America (see LTV Reaches Tentative Agreement With Workers), will keep health and life insurance in effect until February 28 for about 7,500 recently laid off workers, as well as guaranteeing 50% of unemployment income through the company.
It will also preserve pensions and medical and life insurance benefits for retirees, perhaps to the middle of next year.
LTV told the bankruptcy judge last week that required benefits such as supplemental unemployment pay, health insurance and pensions were costing the company $4 million a week, even though it is no longer making steel (see LTV Says It Can?t Meet Retirement, Insurance Obligations ).
Ultimately, retirees will likely lose their medical benefits, but the pensions are guaranteed by the federal government. The steel industry continues to struggle with the burden of its pension obligations, and some large firms have broached the idea of government-supported consolidation of those obligations as part of an overall rescue plan for the industry (seeSteel Exec: Consolidation Depends on Government Benefits, Mini Mill Opposes Steel Industry Benefits Plan ).
LTV, which was the nation’s third-largest integrated steel company, filed for bankruptcy protection last December (see LTV Asks Court To OK Shutdown ).
– Nevin Adams firstname.lastname@example.org
For MORE on the PBGC, seeThe PBGC, Friend or Foe