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LTV Corp. is halting production at two Cleveland steel mills but claims it will keep the facilities open. The move comes a day after the United Steel Workers of America reached a new tentative labor agreement with unsecured creditors after talks with management of the bankrupt steel maker failed. “The union reached agreement with the unsecured creditors’ committee because the company had walked away from negotiations,” said Marco Turbovich, assistant to the USWA’s president. Attorneys for the unsecured creditors at Reed Smith were unavailable Nov. 28. The union said the new pact increases USWA’s stake in LTV to 35 percent from 20 percent, once the steel maker’s finances return to the black. The union had agreed to a one-fifth interest in LTV in earlier contract talks. The unsecured creditors will emerge with control of the company, so the agreement is a move to squeeze management, which is moving to liquidate the company. More importantly, the union said the proposed pact allows $150 million in concessions by hourly and salaried workers. The creditors said the new contract could save $350 million over four years. Despite these moves, LTV’s future and that of its management remain uncertain. Last week, Rep. Dennis Kucinich, D-Ohio, who is participating as a friend of the court, filed a motion asking the U.S. Bankruptcy Court for the Northern District in Ohio in Youngstown to remove LTV’s management. A hearing on the motion is scheduled for Dec. 4. The congressman and the union said they are outraged that on Nov. 20 LTV asked the same court for permission to shut down its mills in Cleveland; Hennepin, Ill.; and East Chicago, Ind.; and begin liquidating assets. That move caught the union by surprise, leading to a strong reaction. “The only thing more devious than the way that LTV’s top management filed for the shutdown is the outright lies they’ve used to cover up their treachery,” the union said in a statement. “LTV’s CEO, William Bricker, is publicly claiming that our union knew all along about their shutdown plans. His lies add insult to the injury of pushing for a shutdown that threatens the livelihoods of tens of thousands of steelworkers.” LTV declined to return several phone calls Wednesday. In the past, LTV has said it needed $800 million in cost cuts over the next five years to convince its banks and the Emergency Steel Loan Guarantee Board that it has a chance of paying back any loans. Even though the union and creditors’ committee are touting the $150 million in recent concessions under the new proposed labor pact, one source familiar with LTV’s finances said this amount in cuts is unlikely to sway the loan board. Copyright (c)2001 TDD, LLC. All rights reserved.

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