Wheeling Pitt strikers target Wall Street

by Roy Rydell & Tim Wheeler

This article was reprinted from the June 14, 1997 issue of the People's Weekly World. For subscription information see below. All rights reserved - may be used with PWW credits.

NEW YORK - Larry Mallas, president of United Steelworkers Local 1190 in Steubenville, Ohio, looked weary but determined as he described the effects on 4,500 steelworkers and their families of the eight-month strike at Wheeling-Pittsburgh Steel Corporation.

Mallas, 44, spoke June 4 to a gathering of trade unionists at the headquarters of the Central Labor Council here to plan a series of protest actions on Wall Street - where Merrill Lynch and other investors in WHX, owner of Wheeling-Pitt, have offices. Mallus had tears in his eyes as he reported that eight members of his local have died from stress and other strike-related illnesses since the strike began Oct. 1.

Mallus said WHX Chief Executive Ron LaBow sold off 5.6 million shares, most of his holdings in his own company, reaping at least $150 million in profits before he provoked the strike which has driven down WHX stock by 45 percent. Now, he said, there are deep suspicions that LaBow is buying back the stock at bargain basement prices in a manner reminscent of robber baron Jay Gould a century ago. The USWA has released a report on LaBow's scam headlined, "Wheeling Pitt Shareholders - Passengers on the Titanic."

AFL-CIO organizer Mike Paluscek opened the meeting with the flat statement, "We need your help." The crowd there responded with pledges of full support.

Paluscek then gave some background on the strike and reported on a demonstration in Boston at the offices of Dewey Square Investors who own 10 percent of the Wheeling- Pitt stock or 2.5 million shares.

The next target was Mellon Bank in Pittsburgh where the United Steelworkers and the AFL-CIO held a mass picketline June 12. Mellon owns 3.1 percent of WHX or 765,000 shares.

A busload of 50 Wheeling-Pitt strikers will descend on Wall Street June 25 to leaflet the offices of the Barclay Bank PLC, a London-based investor in WHX. On Thursday, June 26, the strikers and hundreds of New York supporters will march from City Hall to the World Trade Center where Merrill Lynch, another WHX investor, is headquartered. There they will urge Merrill Lynch CEO David Komansky to pressure LaBow to settle the strike.

Strikers will picket the offices of another WHX investor, Donald Smith & Co., in Paramus, N.J on June 27. The aim of the corporate campaign is to convince shareholders that LaBow has made out like a bandit during the strike even as the company suffered a $34 million loss in the final quarter of 1996.

A notorious Wall Street stock manipulator and speculator, LaBow bought the company for $133 million in October 1987. In May 1991, he reported that he earned $147 million from stock selloffs.

Between April 1993 and November 1995, LaBow sold 3.6 million shares of WHX stock followed by the sale of another two million in May 1996, nearly all his holdings. He continues to receive his $5.5 million "consulting fee" from the steel company.

USWA President George Becker charged, "He's stripped himself of any real investment in the company." Business Week reported that LaBow is "even considering liquidating the company." That is a media leak consistent with a Wall Street manipulator who "waters the stock" to drive down its value and then buys it up at bargain basement prices.

Becker wrote letters to top WHX investors May 12, urging them to intervene with LaBow to reach a fair settlement. LaBow, he wrote, "has made the company's workers and its stockholders pawns in his sick and tragic game." Paluscek said no invester has so far responded. "That's why we are visiting their offices ... ."

Business Week said of WHX shareholders: "The captain of their ship has departed in his richly furnished lifeboat, leaving them all to sink under his tough labor policy."

The workers went on strike to demand that Wheeling-Pitt deliver on its promise to restore wages, pension benefits, and other concessions they had given up when the company declared bankruptcy in the late 1980s.

The company, one of the most profitable in the industry, is sitting on a $450 million nest egg built up from those worker concessions. But LaBow still refuses to honor the promise of a defined pension equal to the rest of the industry.

According to observers, a strike of this magnitude couldn't go on without the connivance of the rest of the steel industry and Wall Street. In fact, other steel companies are delivering steel to Wheeling-Pitt's subsidiary operations that are not being struck. USX, Bethlehem, LTV and other steel corporations would like to see the Steelworkers take a fall to weaken the union in basic steel negotiations. The upcoming contract at General Electric could also be affected.

AFL-CIO President John Sweeney called a meeting in Pittsburgh April 26 to mobilize the labor movement for the striking steelworkers. Sweeney's statement of support was also an appeal to community groups for support.