Steely Determination

Dec. 21, 2004
LTV closing doesn't mark an end in Cleveland, just the beginning of another fight.

By now it has become a familiar story, full of cliches. Another giant steel company twists and ultimately tumbles in the winds of change. Another beleaguered community first reels then quickly rallies to keep a tradition -- and the powerful economic force it represents -- alive. The story has played itself out across the American heartland again and again and again as some 29 steel companies have either shut down or been forced into bankruptcy over the past few years. No wonder, then, that much of the nation seemed to let out a collective yawn when Cleveland's LTV Corp. announced it no longer had a fighting chance to survive. The half-century-old company, which had been in bankruptcy twice, put its losses at $2 million a day in early December 2001 when it idled its plants in Ohio, Indiana and Illinois. The company and its defenders, predictably, blamed simple economics: Cheap imports were eroding the foundation of an industry that once was as strong as, well, steel. Equally predictably, union leaders and members additionally cited poor management: The company was bloated, they said, with incompetent executives at the top. So what else was new? As predictable as it all seemed, however, the demise of LTV was not just another scrap item in the wreckage of the domestic steel industry. Certainly not in Cleveland, home to LTV's largest plant, where 3,200 jobs were at stake. Another 4,300 jobs were on the line at LTV's plants in East Chicago, Ind., and Hennepin, Ill. Benefits for more than 45,000 retirees also were in jeopardy. While the story slipped by largely unnoticed elsewhere, in Cleveland it was the only story that mattered. The local political leadership reacted with the same intensity it had to the news that the Cleveland Browns were leaving town. In fact, the city's then-mayor, Michael R. White, branded William H. Bricker, who at the time was LTV's chairman and CEO, "the Art Modell of the steel industry." It is perhaps the worst epithet that can be cast on a Cleveland business leader. Modell, who moved his football team to Baltimore in 1995, remains a pariah who is regularly condemned in Cleveland media. The LTV announcement was particularly bitter for White, who had not sought re-election and was ending his 12-year career as mayor. Bricker's resignation did little to temper White's passion. Asked why he shouldn't give up what seemed to be a losing battle, White quoted Gen. Anthony McAuliffe's response to German emissaries who gave besieged American troops at Bastogne a surrender ultimatum: "Nuts!" In Cleveland, as in other traditional manufacturing cities, the fate of a venerable employer is considered a very personal matter indeed. "There's a lot of steel-making capacity left at LTV," White declared. "My hope is that a quality investor will buy her and make her all that she can be." As the year was coming to a close, there was little else to count on. Congress went home for the holidays without passing an economic stimulus package that might include a $250 million loan from the Emergency Steel Loan Guarantee Board. Yet, like her predecessor, then-Cleveland Mayor-elect Jane Campbell remained optimistic: "My highest and best hope is that we find a buyer who will continue to make steel on that site." Campbell, who marched in a rally of steelworkers to demonstrate solidarity, cited the quality of workers as a strong selling point. "There is no doubt we have a very sophisticated work force and a very sophisticated plant," she said. Church leaders have lent their efforts to the fight. An ecumenical prayer service was held at the city's huge downtown Catholic cathedral, and officials of Catholic, Episcopal and Lutheran churches filed a "friend of the court" briefing urging a bankruptcy judge to consider LTV's moral obligations. Meanwhile, the company -- or what is left of it -- is busy defending itself against charges that its officials deliberately misled community leaders. "There's no truth to it at all," said company spokesman Mark Tomasch. "We have a very clear record of doing quite the opposite." Asked his highest and best hope for the company, Tomasch said he didn't have one. "It's been finalized," he said. "The company is selling off its assets." Whether it will be a piecemeal sale or a package deal remains in question. The bankruptcy court ruled that the facilities must be kept on "hot idle" until Feb. 28. That keeps heat-sensitive equipment protected in the event of a restart. After that, the plants would be shut down and sold off bit by bit. The bankruptcy court ruling also allows the company to sell to a buyer without guaranteeing union representation. Union leaders agreed to the plan. "I think it was a fair ruling for our situation," said United Steelworkers Local 1157 President Anthony Staltari. "It will give us a two-month window to draw somebody in there, and it keeps all the assets pretty much safe. Once somebody gets in there, I think we can negotiate something that's good for both of us."

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