Union meeting provides few answers

STERLING, Illinois — The biggest hall in the area wasn't large enough to hold the more than 2,000 union members, retirees and spouses searching for answers about the closing of the Northwestern Steel and Wire Co.

It was standing room only in the Sauk Valley Community College gymnasium, which seats about 1,650, and college staff set up extra speakers and chairs in the hallways for people not able to find a seat inside.

On the way in, David Spencer of Sterling, with 28 years in the company, said he was hoping for answers about his pension and severance pay. There were a lot of rumors going around and any information would be welcome, he said.

United Steelworkers of America Local 63 President Russ Lovell led the meeting, introducing speakers from the international and district branches of the union and others.

U.S. Rep. Lane Evans, D-Ill., spoke briefly, pledging his support and promising to work as hard as he can to help the situation.

"It's not just 1,400 jobs that we're losing. It's 1,400 families that are being affected," he told the crowd.

Jim Robinson, assistant director of the union's district office in Gary, Ind., said the union wants to continue to have a say in what happens to the mill and continue to negotiate with the company. He asked that the members support the effort of their representatives to act quickly without the union's normal ratification process, and no one in the gym voiced an objection. He promised prompt word of any decisions made.

David Jury, assistant general counsel for the United Steelworkers of America from Pittsburgh, said since December 1997, 18 steel mills have filed for bankruptcy. Northwestern had been operating under Chapter 11 bankruptcy since December, and is the fourth company to close its doors as a result of bankruptcy. "We've come today at a time of disaster not only for this company, but for the industry," Jury said.

Although the Sterling company had been relatively stable compared to other companies operating in bankruptcy, in the past few weeks it was faced with a cash problem, and lenders refused to extend the line of credit to pay ongoing administrative costs, such as wages, health benefits and severance pay. In the bankruptcy code, after secured debt, administrative claims are given a relatively high priority for repayment.

But because the mill lacks sufficient funds to pay the debt, the union will have to file a proof of claim on behalf of its members by June 18 — putting on record with the bankruptcy court what is owed members and retirees.

"In any bankruptcy, we cannot guarantee the degree to which the claims will be paid," Jury said. It could be months, even years, before any of the claims are paid.

The union will try to salvage as much as it can from the negotiated contract, Jury said, but employees should not expect accrued vacation time earned this year to be paid in full, nor will severance pay be guaranteed.

"It's difficult to imagine a situation more cash-strapped than Northwestern Steel and Wire," Jury said as the crowd began to grumble.

Adam Olson of American General Securities Inc., Sterling, said workers formerly covered by the mill's self-insured medical plan may be able to find coverage through a spouse's group insurance, find private insurance or qualify for benefits under certain government insurance programs once the company terminates medical coverage. Mill workers also are prohibited from rolling over their 401(k) plans until the mill files a separation of services and terminates the company's plan.

After Olson quit speaking, and the floor was opened up for questions, the gym became noisy as grumbling members left in droves. Those seeking more information pressed to the stage asking questions for another hour and a half.

After 28 1/2 years with the mill, Eddie Dean of Sterling is looking at options for starting a new career at 47 years old. He found it helpful to learn about how Chapter 11 bankruptcy is handled, but was unhappy that his four weeks of vacation time will most likely go unpaid. "If I'd only known," he said, shaking his head.

He's pretty sure he'll collect a pension, but has no idea what he'll be paid. His coworker, Jerry Schriber, a 28 1/2-year employee living in Rock Falls, summed it up: "Once we see the money, we'll believe it."

Schriber, a part of the quickly-dwindling number of mill employees still on the job, missed work to attend the meeting. It's a little unsettling to be at the mill with a small crew. "It's as quiet as I ever heard it. You can hear the pigeons."