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Union Has Mixed Feelings On Vote

November 11, 1987

ASHLAND, Ky. (AP) _ Union employees at Armco Inc. say they have mixed feelings about an upcoming election to determine whether they should lend the company $22.5 million to help pay for new machinery.

Armco says the plan would shorten the steelmaking process and make the plant more competitive and preserve jobs.

Ballots are scheduled to be mailed out this week for the Nov. 24 election.

The loan, which would be paid back with at least 7 percent interest, would cost each employee about $1.08 an hour in salary and benefits over three years. The average employee earns about $12 an hour.

The union wages, in addition to state and local bank loans, would help pay for an $82.4 million slab caster.

″Everyone I’ve talked to about it is skeptical,″ said Charles Whitt, a steelworker who has spent 23 years at Armco. ″Everyone’s saying we’ll never get any money back. There are too many conditions to it.″

Before the loan can be repaid, the continuous caster must produce 1 million tons of cast steel slabs over 12 consecutive months, said Armco spokesman Bill Scaggs.

Scaggs said the company expected to repay the loan to workers in mid-1993, three years after the machinery starts casting steel.

Under the present proposal, employees would give up 69 cents of their hourly wages, two of their 10 paid holidays and part of their holiday pay.

Whitt, who said the loan would cost him $6,000 over three years, said he was unsure how he would vote.

″I don’t owe Armco anything, and they don’t owe me anything. That’s the way I see it,″ Whitt said.

But local union president John Blankenship said the loan means a small investment in return for job security.

″No one likes to be in this situation we’re in, a give-back situation. But a lot of people do see the need for longtime survival, to make Ashland a viable plant now,″ said Blankenship, president of Local 1865 of the United Steelworkers of America.

″A lot of people are terming it more as an investment than a concession because there’s more of a return,″ he said.

Scaggs pointed out that unless the union approves the loan, it may face more trouble than it bargained for. Armco, he said, has lost $1 billion since 1981.

″The object of this is to save jobs. Absolutely,″ Scaggs said.

Most of the major steel companies already use slab casters, he said.

The latest proposal is a modification of a previous company request for $22.5 million in wage and benefits concessions.

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