If Chrysler's rebound was last year's Cinderella story in American business, this year's might well be the turnaround at the Weirton Steel Corporation. A year ago, with the owners of Weirton Steel threatening to phase out the mill here, workers voted to buy the company and run it themselves. In January, Weirton's parent firm, National Intergroup Inc., sold the mill to the workers for $386 million.
With some 7,600 worker/shareholders, Weirton Steel became the largest employee-owned company in the world. In a company known for paying wages near the top of the industry scale, workers swallowed a 20 percent cut in pay and benefits. They also agreed not to expect stock dividends until after the company's viability had been assured.
By the end of September, the mill had earned some $48 million, while some of the nation's largest steelmakers were losing tens of millions of dollars each quarter.
Last fall, the talk among Pittsburgh business leaders was that nobody would buy from Weirton because the mill's days were numbered. But at a time when domestic steel corporations are scrambling to keep from losing customers to low-cost imports, Weirton's new marketing group has signed nearly 200 new customers.
Weirton expects to ship 2.1 million tons of steel this year, 17 percent above last year's total. Sales are expected to top $1 billion, compared with $929 million last year. And the company has invested $62 million to upgrade the mill, which produces sheet-metal products used in a wide range of goods, including containers, automobiles, and appliances.
''You all should take a great deal of pride in what you have done,'' the company's chairman and president, Robert L. Loughead, who is a former president of Copperweld Steel Company, told about 2,000 workers and their spouses early this month at Weirton's first annual shareholders meeting since workers bought the company.
In the cavernous arena where the meeting was held, gray flannel and wingtips were less in evidence than denim and steel-toe boots. Some shareholders carried cassette recorders so they could replay Mr. Loughead's comments for co-workers who were on the night shift and couldn't make the meeting.
Those attending the meeting heard mostly good news during an hour-long pep talk from Mr. Loughead and several members of Weirton's board of directors. The chairman cautioned that profits would likely decline during the fourth quarter in the face of low prices and possibly softening sales. But as head of a company that has survived largely on faith, Loughead still found cause for optimism.
''We expect to be in the black,'' during the fourth quarter, said Loughead. ''Very few steel companies will be able to make that statement.''
In addition to upgrading its facilities, Weirton is looking for a way to fund new equipment that would increase the mill's capacity and improve productivity. A need for new machinery underlines one of Weirton's most formidable challenges, that of securing loans.
''We have to make believers out of everybody, including the banks,'' Loughead said. ''As we continue to maintain profitability, there's no question in my mind that we can obtain borrowed funds to implement our program.'' But, where profits are concerned, the steel industry has become a stingy master.
With prices for its products being held down by intense domestic competition and low-cost imports, Weirton has set about attacking its production costs as a way to widen its 5 percent profit margin, which Loughead hopes to double.
The company has cut those costs by an estimated $23 million this year through a number of process and operations changes. For example, the company recently began purchasing natural gas directly from a producer in Louisiana at a lower price than it had been paying its local supplier. The savings are expected to amount to $8 million a year.
Loughead said the company, which has looked heavily to outside consultants this year for research and development, intends to strengthen its in-house R&D department as soon as it is prudent to spend money doing so. For now, however, the company faces more pressing concerns, many of which are endemic to the industry.
''The steel industry in this country will continue to contract,'' Loughead said. ''It will become more fragmented, more specialized, more efficient. . . . We intend to be one of the survivors.''
Steel imports, often subsidized by foreign governments, have threatened a number of Weirton's traditional customer bases. Weirton's products are also falling prey to growing competition from new materials, such as a new generation of plastics being used in everything from food containers to automobiles.
One way Weirton is attempting to counter the competition in its existing markets has been to broaden its customer base. While under National Intergroup's management, Weirton's products were sold through the parent company's marketing arm.
One of Loughead's first steps was to set up a marketing department at Weirton. ''Now we have an opportunity to marry our facilities planning and our marketing planning,'' Loughead said. ''We have gotten new customers in virtually every market that exists for flat rolled steel.''
''Behind the glowing statistics, it has been largely the commitment of the Weirton workers that has been responsible for the company's favorable performance,'' Loughead said.
''They are proud of their steelmaking heritage, and they are determined to preserve it at any cost,'' said company spokesman Charles R. Cronin.
Ever since 1909 when Ernest T. Weir built his tin mill among the orchards and grain fields that once covered this part of the Ohio River Valley, making steel has been the one dream framing the lives of the people who live here. It has been a dream that has lured craftsmen and laborers from places like Poland, Russia, Ireland, and Greece and melded three generations of their descendants in a community that has never tired of blast furnaces, heaving smokestacks, and grueling shifts.
When Weirton Steel began tightening its belt two years ago, the whole town felt it, while people feared the mill would shut down, a condition that would have meant economic devastation for this town of 28,000. Now, with profits beginning to roll in again, a new spirit of optimism has permeated the community , said Joseph W. Mayernick, executive director of the Weirton Chamber of Commerce.
''Weirton is West Virginia's renaissance city,'' Mr. Mayernick said. ''We were a butterfly once and then we turned back into a worm. We went into the cocoon. And now we're busting out all over.''
Throughout Weirton there are signs, some on metal, some carved in wood, that read: ''Weirton Steel - We can do it.''