ATI-USW Labor Fight Drags On, Negotiations Continue

Over 2,220 United Steelworkers (USW)-represented Allegheny Technologies, Inc. (ATI) workers in six states have been locked out since August 15.

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The locked-out workers lost their ATI health benefits on November 30. For most of them, unemployment benefits ended on February 15^th.  The Pittsburgh regional office of the National Labor Relations Board (NLRB) has issued a complaint that the lockout is illegal. Last week, ATI issued a statement that said they believe that the work stoppage is legal, citing a lack of progress in contract negotiations.

Furthermore, ATI contends that the allegations in the complaint are unsupported by fact or law, and that “ATI will vigorously challenge the complaint through (the) appropriate legal process.”

According to the USW website, the NLRB complaint alleges that ATI bargained in bad faith and over permissive demands, both before and during the lockout.

According to the USW, under the National Labor Relations Act, a company is prohibited from locking out workers over permissive demands, which are bargaining demands that do not relate to terms and conditions of employment. ATI stopped bargaining on Aug. 6 and presented the union with a “last, best and final” contract offer that same date.

ATI contends the lockout occurred because the USW negotiating committee did not accept the company offer by August 10 and did not allow ATI employees to vote on it. The USW characterized this as an “unlawful ultimatum” which resulted in the company locking out its workers.

Furthermore, the USW website contends that ATI started planning for a lockout in January, before contract negotiations began, meeting with outside consultants hired to recruit replacement workers and that ATI “forced union members to sit through captive-audience meetings aimed at intimidating them into accepting concessions.”

New Negotiations

Meanwhile, ATI and the USW have returned to the bargaining table, but there have been no reports of an agreement being reached. According to an ATI press release from August 15, ATI’s aforementioned last, best and final offer to the USW, included, ”$4,500 in lump-sum payments over the four-year agreement and continued incentive programs for ATI Flat Rolled Products employees, who averaged $94,000 in earnings in 2014.”

The proposal also included “affordable solutions for continued family healthcare, at about half the cost that the average American worker pays.”

The USW has not agreed with ATI’s average earnings calculation and does not support giving new hires different benefits than employees who are grandfathered in under previous agreements.

Two Tiers

This “two-tiered approach” would enable ATI to replace retired employees with contract labor, replace pensions with 401(k) plans and have employees bear more of their own health insurance costs.

The current bargaining position of either side has not been articulated, but the USW’s leverage seems to be waning. ATI has already idled its Midland, Pa., plant — a commodity stainless facility — and its Bagdad GOES production facility in Gilpin Township, Pa.

ATI reported a net loss of $378 million for 2015 as compared to a net loss of $2.6 million in 2014. ATI’s Flat Rolled Products business segment is to blame for the staggering losses. Operating losses for flat-rolled products were $242 million for 2015 which, in my opinion, were due in large part to plummeting nickel prices, not the contracting of replacement workers.

What is Rightsizing?

Richard Harshman — ATI’s chairman, president, and CEO — stated that ATI is taking “rightsizing actions” to return the segment to profitability as quickly as possible and “execute our strategy for sustainable, long-term, profitable growth.”

ATI’s current cost position is at a disadvantage to North American Stainless and Outokumpu’s Calvert, Ala., plant, both of which are single site and also non-unionized. The only benefit ATI may have in the future is that anti-dumping and countervailing duty petitions were filed last week against Chinese stainless sheet and strip.

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This is sure to reinforce base price increases for the U.S. mills and may aid ATI in getting back in the commodity stainless game sooner than expected.  ATI’s Flat Rolled Products division was one of the four U.S. mills petitioning the U.S. Department of Commerce and the International Trade Commission to investigate U.S. imports of Chinese stainless sheet and strip.