8,000 Workers at LTV Steel Face Pay Cuts

LTV Steel on Thursday announced plans for a 7% pay cut for all 8,000 salaried employees as the nation’s second-largest steelmaker continues to cope with heavy losses.

The Cleveland-based LTV Steel, which lost $630 million in the first six months of this year, also said it would make cost-cutting changes in benefits and its pension plan.

“We have faced, and will continue to do so in the months ahead, the most difficult period in our company’s history,” David Hoag, presi-dent and chief executive, told employees.

“I am confident that our many efforts to reduce costs will ensure for each of us the job security and career potential we desire,” Hoag said.

In addition to the salary cuts, the company said it is eliminating Sunday premium and shift differential pay, changing holiday premium pay and overtime pay for non-union employees to straight-time rates and dropping two paid holidays beginning next year. The changes are effective Sunday.

“Our mission is to outperform our competition in the areas of cost, quality, service and salesmanship,” Hoag said in a statement. “There is no alternative.”

Company spokesman Mark Tomasch said the current pension plan is being frozen. It will be replaced by a defined contribution pension plan through which each employee decides how to invest the company contribution, he said.

“While each of us will be asked to sacrifice, the changes are designed to be equitable and manageable,” Hoag told employees.

The affected employees work primarily in Ohio, Pennsylvania, Indiana and Illinois for LTV Steel Flat Roll & Bar and LTV Steel Tubular Products and at LTV Steel’s headquarters in Cleveland. LTV Steel has about 2,000 salaried employees in the Cleveland area.

Tomasch said the cuts do not apply to salaried employees at LTV’s stainless steel operations--LTV Steel Specialty Products--which is profitable and up for sale.

Pensions and wages of LTV’s 24,000 hourly employees are covered under an agreement with the United Steelworkers.

The former Republic Steel merged into the Dallas-based LTV Corp. last year to form LTV Steel.

LTV Steel’s losses climbed to $630 million in the first six months of this year and could hit nearly $800 million before the year is over, some Wall Street analysts said.

In the 1985 first quarter, the company had losses of $156 million. The record second-quarter loss of $472.3 million included a one-time special charge of about $400 stemming from the indefinite idling of LTV’s Aliquippa, Pa., steel plant.

The cuts announced Thursday are part of a broad cost-reduction program announced in May to deal with continuing losses.

“I do not foresee any lessening of the competitive pressures which have severely eroded steel markets and prices,” Hoag said.