LTV attorney Richard Shaw told U.S. Bankruptcy Judge William Bodoh 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, according to the Associated Press.
Lawyers also asked the court for permission to void the steel manufacturer’s labor contract, a move which a company spokesman reportedly said would leave as many as 100,000 retired workers and family members without long-term health care.
LTV’s decision to petition the court to void its labor contract is just in time for its report on its progress in securing financing. An agreement made earlier this month with the United Steel Workers of America (USWA) and bankruptcy courts obligated the company to report on its financing prospects so that a judge could determine whether the company could be saved and whether the sale of its assets could go forward.
LTV formally filed for bankruptcy a year ago on December 29. Though the company is still operating, its 18,000 employees have been embroiled in a battle to save jobs and salvage the shrinking possibility of their long-term retiree benefits.
The USWA has been influential in keeping the doors of the embattled company open; on December 6th due to support from congressional leaders, the USWA helped to prevent a shut down of LTV’s steel making operations.
The group managed to forge an agreement with the Unsecured Creditors Committee of LTV and its Debtor in Possession (DIP) lenders to keep the company’s integrated steel facilities in “hot idle” for nearly three months. The USWA also managed to get a two- week extension to petition for certification of a $250-million loan from the Emergency Steel Loan Guarantee Board.
The Union also succeeded in winning significant protections through today for its members employed at LTV such as, supplemental unemployment benefit (SUB) pay for terminated workers; full health care coverage and payment of retiree health benefits through use of the Voluntary Employee Benefit Association (VEBA) fund.
However, on Dec. 7, Judge Bodoh approved a
temporary halt of production at LTV steel making facilities
in Cleveland; East Chicago, Ind.; and Hennepin, Ill., which
employed about 7,500 workers. LTV immediately stopped
producing steel and laid off thousands of workers.