Cost Reductions to Secure Weirton Steel's Position

Weirton, WV— Weirton Steel Corp. officials said they believe the company will succeed in fulfilling the remainder of its cost-savings steps to help the company become more competitive.

An Associated Press article said the steelmaker could be forced into bankruptcy or liquidation if company retirees do not agree to proposed changes in their health care coverage, one of the cost-savings measures the company is pursuing.

"Within the past several weeks, we reduced expenses by $38 million through new labor agreements and like concessions from management which include a 5 percent pay cut and a pension freeze. That was step one. The second step involves our retirees," said John H. Walker, Weirton Steel president and chief executive officer.

"We believe we will trim an additional $10 million in costs with help from our retirees. We currently are holding informational meetings with them to explain a proposal that asks them to assume part of their health care coverage. While the issue is painful, they understand the need to keep the company and their benefits intact and have responded favorably to the proposal."

"Our employees and retirees are extremely knowledgeable about our company and the industry. Nevertheless, we have been, and continue to be candid with them in meetings and in written materials about the task before us and the scenarios of success and failure to move the company forward. The Associated Press obtained written materials intended only for our retirees which mentioned those scenarios," Walker explained.

"What the Associated Press article does not mention is the favorable response we've received from our retirees for the health care proposal. Retirees are signing up for the program. They have responded courageously and there is every reason to believe they will continue to support the company."

Walker said the third step is for the company and Independent Steelworkers Union officials to address health care proposals for active employees as well as improvements in company-wide productivity and efficiency. Together, the issues could result in an additional $34 million in savings.