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Saturday, January 12, 2002

By Len Boselovic, Post-Gazette Staff Writer

Fourteen months into its second stay in bankruptcy, Wheeling-Pittsburgh Steel hopes to stanch yet another cash crisis with a $27.2 million aid package expected to be finalized next week.

The steelmaker identified where $12 million of the relief will come from -- $5 million from West Virginia taxpayers and $7.2 million from Ohio taxpayers -- but won't disclose the sources for the remaining $15 million.

Two of the other sources are believed to be WHX Corp., Wheeling-Pitt's New York holding company, and Wheeling-Pitt employees. Spokesman Jim Kosowski yesterday denied speculation that Cleveland-Cliffs, Inc., a Cleveland iron ore provider, would also provide some assistance. Cleveland-Cliffs spokesman Ralph Berge declined comment.

Wheeling-Pitt President James Bradley said the package is contingent on the participation of other parties. If the West Virginia steelmaker can't come up with the cash, it could go the way of LTV Corp. The bankrupt Cleveland steelmaker has ceased production and put its plants up for sale.

Wheeling-Pitt employs 4,100 in Ohio, West Virginia and Pennsylvania and has about 10,000 retirees.

The financing would give the troubled steelmaker about 50 days of breathing room. During that time, Wheeling-Pitt would develop a plan for digging itself of bankruptcy, either by finding a buyer or becoming strong enough to stand on its own by reducing costs and benefiting from slowly improving industry conditions.

The company lost nearly $500,000 a day in November, the latest figures available. Through Nov. 30, it has lost $336.7 million since filing for bankruptcy in November 2000.

Wheeling-Pitt is one of several steelmakers hoping to be part of a government-assisted merger with U.S. Steel, the nation's largest unionized steelmaker. U.S. Steel said last month it would consider acquiring Wheeling-Pitt, Bethlehem and other ailing producers on three conditions: approval of President Bush's plan for relief from steel imports; government assumption of an estimated $12 billion in retiree benefits the steelmakers owe; and major concessions from the United Steelworkers union.

The Associated Press contributed to this report.