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RG Steel families dealing with change

August 24, 2012
Kim Loccisano - Staff Writer , Times Leader

MAJOR CHANGES in how day-to-day business practices in the region's steel industry are conducted are already being seen and having an immediate impact in households across the region.

Numerous employee benefits have been effectively eliminated for employees of RG Steel, both active and retirees as the company liquidate its assets.

While none of it is coming as a surprise to the steel company's employees or residents of local communities having ties to the company, the life-altering realities the process is bringing are now coming to the surface.

The most recent wave of adjustments began when a federal bankruptcy court judge in Delaware approved a motion to terminate a collective bargaining agreement installed in March 2011 between now bankrupt RG Steel and the United Steelworkers union, as a representative of the company's 4,500 union employees.

Also, for the first time, details of the extreme staffing situation existing at the Follansbee coke plant, or Mountain State Carbon, are being revealed.

At present, Mountain State Carbon has no employees, as all the workers assigned there are made available through RG Steel through its 50 percent ownership of the coke plant.

Expectations are that approximately 200 key employees are being invited to accept confidential offers of employment with Mountain State Carbon in a concerted effort to do everything possible to protect an essential, but fragile coke battery.

The whole point of this effort is the reality that the coke plant is operated by RG employees as there is no MSC workforce because of the split ownership of the facility between RG and Severstal.

The termination of the BLA and the current MLA are driving the move at MSC.

Employees of RG have been receiving letters this week explaining in some detail the benefits being terminated: health and welfare benefits, early termination of COBRA coverage and termination of 401(k) savings plans.

Employees have been informed that because of the liquidation, the company and all of its sudsidiaries will be terminating sponsorship of and participation in all of the health and welfare plans. All benefits provide under the plans will end as of Aug. 31.

Those identified benefits include medical, dental, vision, prescription drug, life insurance, short-term disability, accidental death and dismemberment, supplemental unemployment and flexible spending accounts.

As early as last Friday evening, major concerns had been breaking out in the local communities, though the action was requested in a single motion entered into the court docket late Friday as a cooperative venture by RG Steel and the USW.

This cooperative approach apparently prompted the steel company to change plans that had been anticipated concerning ending certain employee medical and prescription benefits through Aug. 31, that would have normally ended with the courts approval of the formal request to terminate the contract.

The company's reasoning for allowing a limited number of benefits to be carried through to the month's end was founded on the value of avoiding the cost of litigating such matters.

"In a effort to ensure the continued protection of the debaters assets, to facilitate the orderly sale of such assets, to recognize the contributions of employees and the value to the debtors provided by this MLA and to avoid the expense and disruption of formal proceedings under the sections ... the parties have agreed to enter in to this MLA," according to the Friday court filing.

"Upon the closing of each covered facility the employment of any remaining employees shall be terminated and the debtors shall have no further obligations with respect to such employees ...," noted the court document.

 
 

 

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