Chairman of Wheeling May Resign Today : Ex-Ford Official Seen as Likely Successor

Dennis J. Carney, embattled chairman of strike-bound, financially ailing Wheeling-Pittsburgh Steel, will announce his resignation today, industry sources said Thursday.

The company is expected to name George A. Ferris, a 69-year-old retired Ford executive who ran the auto maker’s steel division, to succeed Carney, the sources said.

Wheeling-Pittsburgh officials refused to comment, but sources confirmed published reports that the 64-year-old Carney, who has been the firm’s controversial chairman since 1978, is being pressured to quit by Allen E. Paulson, chairman of Gulfstream Aerospace and Wheeling-Pittsburgh’s largest shareholder.

On Verge of Collapse

Carney’s impending ouster is thought to be tied to an effort by Paulson and others to break the stalemate that has developed in a two-month strike by the United Steelworkers that has left Wheeling-Pittsburgh on the verge of collapse. Paulson was unavailable for comment Thursday.

Union officials had also been hoping for Carney’s ouster as a way to move toward a settlement. Although they had previously respected Carney for his aggressive efforts to keep Wheeling-Pittsburgh afloat, during the strike union leaders have contacted shareholders to explain that they think Carney has become a stubborn obstacle to labor peace and should be fired.

Still, a union spokesman said Thursday that it is too early to tell whether a change at the top at Wheeling-Pittsburgh will actually result in a speedy settlement.

Carney’s resignation is the climax of a financial crisis that has steadily worsened throughout the year for the nation’s seventh-largest steelmaker. Following years of massive losses, Wheeling-Pittsburgh entered Chapter 11 bankruptcy proceedings in April, and it later sought to win labor savings by having the bankruptcy court annul its contract with the steelworkers.

Strike Began July 21

In July, a federal bankruptcy judge approved the request and the company attempted to unilaterally reduce the wages and benefits of its unionized work force from an average of $21.40 per hour to $17.50.

But the move immediately prompted the union to call a strike by its 8,200 members on July 21, idling all of the company’s steel mills in the first major labor dispute in the U.S. steel industry since 1959.

Until reports of Carney’s impending resignation began to surface, there had been no sign that any progress had been made in the walkout, and Wheeling’s competitors were reportedly starting to pick up its former customers.

Paulson, who has long been at odds with Carney over his aggressive management style at Wheeling-Pittsburgh, was apparently unhappy with Carney’s unwillingness to compromise with the union to settle the strike. Earlier this summer, Paulson and Nisshin Steel of Japan, a big shareholder that had previously tried to establish a U.S. joint venture with Wheeling-Pittsburgh, had asked the bankruptcy court to allow them to form an independent shareholder committee to give them a greater voice in the reorganization of the firm under Chapter 11. Later, Nisshin withdrew its member from the Wheeling board of directors, apparently in a dispute with management.

Throughout the strike, union officials have indicated that they are willing to accept some concessions to keep the company afloat. But a union spokesman denied Thursday that the union has reached any kind of compromise agreement with Paulson that would simultaneously settle the strike and get rid of Carney.

Traveling to Pittsburgh

Ferris, a longtime Ford executive who ran the company’s Rouge Steel division as well as other operations until his retirement in 1981, has reportedly provided advice to Paulson in recent months about Wheeling-Pittsburgh. Ferris could not be reached for comment Thursday, but his wife said he was on his way to Pittsburgh. Industry sources said Thursday that he has already been selected as Carney’s replacement.

But industry analysts now wonder whether anyone can untangle Wheeling-Pittsburgh’s affairs and successfully reopen its mills. With the firm hit both by bankruptcy and a protracted strike in the midst of a severe slump in the steel industry, analysts question whether the firm’s lenders will provide it with the funds needed to restart its capital-intensive mills.

“If this (Carney’s ouster) is a catalyst to end the strike, that is a plus, but things may have already passed the point of no return,” said Peter Anker, a steel analyst with First Boston in New York.