By THOMAS J. SHEERAN, Associated Press Writer
CLEVELAND (AP) - Negotiators for the United Steelworkers of America and LTV Corp.'s unsecured creditors reached agreement Tuesday on a revamped contract meant to save the bankrupt company with a $250 million federally guaranteed loan.
The deal proposes $150 million in savings by hourly and salaried workers at LTV, which last week asked a federal bankruptcy judge for permission to close several mills.
The five-year revised contract includes wage cuts, delayed pay increases and health-care savings, according to the union.
Leo W. Gerard, president of the international union, said he was confident the agreement "will satisfy the concerns of lenders and clear the way" for the federal loan.
Questions surrounding the company's ability to repay the federal loan prompted the company to ask the bankruptcy court for permission to close its mills in Cleveland, East Chicago, Ind., and Hennepin, Ill., affecting 7,500 jobs.
In August, the steelworkers union approved a new contract with LTV that cut labor costs in an attempt to save the company. The agreement covered 9,000 LTV Steel employees, including 3,200 in northeast Ohio.
The specific terms of the revised contract with the unsecured creditors, which included most of LTV's suppliers, will be withheld until a ratification vote can be held. No date for the vote has been set, said union spokesman Marco Trbovich.
Unsecured creditors include those owed money by LTV from before the original bankruptcy court filing 11 months ago. They would be paid after secured creditors, which loaned money more recently and have property and land as collateral.
There was no immediate comment from LTV. A message seeking comment was left Tuesday at company headquarters in Cleveland.
The union made it clear that it wants the company to proceed under new management.
Gerard has blasted LTV for asking the court to shut down. Gerard said he and LTV Chairman William H. Bricker were in the middle of a telephone conversation about possible ways to save money when the liquidation petition was filed in bankruptcy court in Youngstown.
"We are left no choice but to call for the current management to be replaced with leadership who will cooperate with us and the creditors in working to secure certification of the $250 million loan by the Emergency Steel Loan Guarantee Board," Gerard said.
"With 26 of the nation's leading steel companies having already gone into bankruptcy, all of us have known for some time that only action by the federal government will save this company and the American steel industry."
A hearing is scheduled next Tuesday in bankruptcy court in Youngstown on the company's request to close its mills and get them ready for sale.
The request prompted LTV's hometown congressman, Dennis Kucinich of Cleveland, to call for the bankruptcy court to appoint a trustee to manage the company.
LTV had filed for bankruptcy court protection from creditors Dec. 29. It blamed competition from cheap imports and a sluggish economy.
The company employs more than 17,000. Its primary assets are in Cleveland, Warren and Youngstown; East Chicago; Aliquippa, Pa.; and Chicago and Hennepin, Ill.