News from USWA: Union Wary of Ormet's Financial Picture After Bankruptcy Reorganization; Union Urges Responsible Management with Creditors' Equity Still at Risk.

WHEELING, W.Va. -- The United Steelworkers of America (USWA) today said that despite last week's announcement that Ormet has completed its financial reorganization and exited bankruptcy, creditor recoveries could still evaporate entirely while the CEO Mike Williams and the company's other top managers continue to collect huge salaries.

A report released by the USWA earlier this year noted that the company's financial projections were based on flawed assumptions that pumped up projected cash flows and created unrealistic expectations for recoveries by unsecured creditors.

According to Potok, Campbell and Co., who conducted the research for the USWA, two of Ormet's most uncertain assumptions include the company's ability to defer 2006 and 2007 payments to its pension fund and that the company will be able to liquidate inventories and receivables without any deterioration in recoveries over the next six months.

"Laying-off employees, contracting-out jobs, cutting wages, slashing retiree health insurance benefits and reducing production capacity while doing business with a company owned by an individual charged with threatening Steelworkers with a shotgun are not responsible solutions to Ormet's long-term financial problems," said USWA District 1 Director David McCall. "Ormet management and its new board of directors must now take responsibility for the current labor dispute, return to the bargaining table and commit to working with the USWA to achieve a fair contract in Hannibal."

McCall pointed out that the Union has made a number of contract proposals based on the principles that enabled other bankrupt Steelworker employers to thrive after emerging from bankruptcy. The Union's latest proposal to Ormet would preserve as many jobs as possible and largely retain existing levels of wages and benefits for active members and retirees while achieving savings in humane ways that place less of the burden on workers and retirees.