United Steelworkers union objects to RG Steel pay plan

The United Steelworkers called a request by RG Steel to pay 21 of its remaining employees $767,000 in bonuses and health-insurance stipends "an inappropriate, unfair and outrageous effort."

The complaint, sent to members of the union Friday, came a day after the former steelmaker asked the U.S. Bankruptcy Court in Wilmington, Del., for approval of the plan. RG Steel owned several steel mills, including Sparrows Point in Baltimore County, before auctioning off its property this summer for pennies on the dollar.

The company asked to pay $2,000-a-month stipends to 21 unnamed "Key Employees" for buying health insurance as well as a "retention payment" equal to three months' salary, if those workers remain with the company through Dec. 31.

RG Steel's attorneys said in a court filing that the company needs the employees' expertise to wind down its estate. Without the proposed plan, the workers would at best "be less motivated to undertake the substantial responsibilities that they have been asked to undertake in connection with the Wind-Down Process, and at worst, would leave the Debtors' employment entirely," according to RG Steel's filing.

The United Steelworkers' letter, written by the negotiating committee, called it a "slap in the face" to ask to pay these handful of workers more when nearly all of RG Steel's approximately 2,000 workers have been laid off. The Sparrows Point complex was idled after the company filed for bankruptcy protection in May and might never reopen as a steel mill.

"Meanwhile, RG owes Steelworkers and retirees monies for unpaid vacation, severance, medical claims and other broken promises," the union said in its letter.

The company's request is separate from an earlier plan, approved by the court, to pay up to $20 million in bonuses to 10 RG Steel executives.



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