Walking the Line at Wheeling

By Barbara Rudolph

Hugging the eastern bank of the rust-colored Monongahela River, the mammoth Wheeling-Pittsburgh steel plant has long dominated the town of Monessen, Pa. (pop. 12,000), situated in the shadow of the Allegheny Mountains 40 miles south of Pittsburgh. Last week the mill was conspicuous for another reason. Hit by the first major strike of the United Steelworkers in 26 years, the Wheeling plant stood idle.

The walkout began after Wheeling imposed an 18% reduction in wages and benefits for its 8,200 workers in Ohio, West Virginia and Pennsylvania. The company, which filed for bankruptcy on April 16, acted after a federal judge ruled that its old labor contract could be annulled. The union immediately refused to accept the new work terms and called a strike.

The union's action could profoundly affect the entire steel industry. Earlier this year, steelmakers abandoned their 29-year tradition of negotiating one pact for all American workers. With labor contracts for five major steel manufacturers due to expire next July, the Wheeling settlement could become a trendsetter for an industry that has grown unaccustomed to strikes. Said William T. Hogan, a steel-industry expert and an economics professor at Fordham University: "This is historic, a benchmark. The outcome will be of great importance for both the companies and the union."

Wheeling officials insist that the company had no choice but to cut wages, pointing out that its workers take home 78% more in pay and benefits than their Japanese counterparts. The company was about $520 million in debt last April when it went into bankruptcy proceedings. Wheeling had been paying for an expensive modernization program and losing business to lower-cost foreign imports. "We now face the greatest challenge that men and women can face, the challenge to survive," said Chairman Dennis Carney. The Pittsburgh-based company, which recorded sales of more than $1 billion in 1984, maintains that slashing wages and benefits from $21.40 to $17.50 an hour is necessary if it is ever to emerge from bankruptcy.

Wheeling workers said that management's demands were unacceptable. "We won't work for slave wages," said Paul Chasshind, one of many pickets marching last week near an entrance to the Monessen plant. His co-workers point out that together they have given back $141 million in reduced pay and profit sharing over the past three years. Labor leaders fear that if Wheeling-Pittsburgh achieves its goals, other steelmakers will be inspired to seek their own concessions from workers. Said Don Caterino, a third-generation steelworker: "If we cave in, workers at other mills will get buried too."

Union members are particularly alarmed that Wheeling succeeded in applying a 1984 law that permits a company in bankruptcy proceedings to abrogate its labor contracts. The law stipulates that a judge must first rule such a step is necessary for the firm to come out of bankruptcy successfully. Workers hoped that the courts would be sympathetic to their cause, but Wheeling was able to receive the authorization from Bankruptcy Judge Warren W. Bentz. Said Union Attorney Michael Gottesman: "This interpretation of the law could open the floodgates for companies seeking to use the bankruptcy statutes to dodge labor agreements. It's a chilling decision."

Both sides last week seemed to be settling in for a long strike. The company has perhaps $62 million in cash on hand, $100 million worth of steel in stock and no reason to settle quickly. Meanwhile, those workers who will not be receiving unemployment compensation will collect an average of $60 a week in union benefits for up to 400 weeks. "The next step is liquidation if our backs are forced against the wall," said Wheeling Spokesman Ken Maxcy. Elmer Paulina, a veteran steelworker, was equally unyielding: "There comes a time when you must draw the line and say, 'I'm not going to take it anymore.' Now is that time." --By Barbara Rudolph. Reported by Thomas McCarroll/Monessen

With reporting by Reported by Thomas McCarroll/Monessen