Thursday, August 12, 2004

Steelworkers in pension fight

Employer made promise; must government honor it?

By Gregory Korte
Enquirer staff writer

Brenda Harsh of Elyria takes part in a rally Wednesday morning outside the federal courthouse in Cincinnati. Former employees of Republic Technologies International, which shut down, want the federal pension guarantor to honor RTI's promise of early retirement benefits.
About 60 Ohio steelworkers and their supporters protested outside the federal courthouse in Cincinnati Wednesday morning. Inside, a federal appeals court was considering a case that could decide whether 2,500 workers get shutdown pensions after their mills went bankrupt.

The confrontation brought the rust-belt economic issues facing northern Ohio to Cincinnati, if only for one day. And while the legal arguments turned on a narrow issue of when the pension plan was shut down, the protest outside took on broader issues of Ohio's economy in a presidential election year.

The Pension Benefit Guarantee Corp., a federal agency, refused to pay the shutdown benefits because they were negotiated by Republic Technologies International at a time when the steelmaker had already announced it would sell off its plants and seek bankruptcy protection.

"For those who say they don't want to get into politics, let's make one thing clear: this case is political," said Bruce Bostick, a Lorain-based organizer for the United Steelworkers of America.

U.S. Rep. Ted Strickland, D-Lisbon, called the denial of benefits "immoral." Speaking to the steelworkers, he said, "If we do not insist that a commitment made to workers is honored, and we could lose something that is very precious in this country, and that is the idea that government is on our side."

Democratic presidential candidate John F. Kerry sent a letter blasting the Bush administration's denial of the pensions.

A spokesman for the PBGC called the charges of partisan politics "utterly baseless." The 30-year-old federal agency is run by a governing board made up of the secretaries of Treasury, Commerce and Labor and is funded by employer premiums, not tax dollars.

"There's no question it's very tough. But the problem in our view is that companies do not fund the promises made to their workers. That's what happened with RTI," said Randy Clerihue, director of public affairs for PBGC.

The federal government will still guarantee the workers' regular pensions, at a cost of $110 million.

At issue are the shutdown benefits, which would allow the workers to receive benefits before retirement age, at an additional cost of $95 million.

U.S. District Judge Peter C. Economus in Youngstown ruled the government should pay the shutdown benefits. The PBGC appealed to a three-judge panel of the 6th Circuit Court of Appeals in Cincinnati, which heard oral arguments Wednesday.

Steelworkers from Massillon, Canton and Lorain were joined by Cincinnati union leaders outside the courthouse Wednesday.

"We as employees don't have any say about who runs our company into the ground. We look at our contract and believe it, and then we're shot down by loopholes and legalities," said Pat Reich, a former steelworker from Alliance who now works 15 hours a week as an in-home nurse.

"We thought that the United States of America would honor its contract, just like we honor their contracts by paying our taxes."

Both sides spoke of the "facts and circumstances" of the Republic shutdown - a sort of legalese that indicates that the case isn't precedent-setting.

Only 5 percent of pensions guaranteed by the federal government are the kind at issue in the Republic case.

But the industries that have shutdown benefits negotiated into their union contracts - autos, steel, rubber and aerospace - have a heavy presence in Ohio's economy.


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