United Steelworkers announces ATI strike, citing ‘unfair labor practices’

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USW announces ATI strike

“We are willing to meet with management all day, every day, but ATI needs to engage with us to resolve the outstanding issues,” USW International Vice President David McCall said in a prepared statement. “We will continue to bargain in good faith, and we strongly urge ATI to do start doing the same.
“Through generations of hard work and dedication, Steelworkers at ATI have earned and deserve the security of a union contract. We cannot allow the company to use the global pandemic as an excuse to reverse decades of collective bargaining progress.”
USW said negotiations with ATI began in January 2021. The union claimed the company “sought major economic and contract language concessions” from its roughly 1,300 union members. Furthermore, the union said members have not had a wage increase since 2014.
Meanwhile, the union had announced its intention to strike Friday, March 26.

“In addition to protesting the company’s serious unfair labor practices, it is the utmost desire of the union to achieve a fair and equitable contract, and we are prepared to meet with management all day, every day if it helps us reach a fair agreement,” McCall said in a statement Friday. “We will continue to bargain in good faith, and we strongly urge ATI to do start doing the same.”

ATI response

Meanwhile, ATI expressed its disappointment in the development.
“Last night, ATI further improved our proposal in hopes of averting a work stoppage,” ATI spokesperson Natalie Gillespie wrote in an emailed statement. “With such a generous offer on the table — including 9% wage increases and premium-free health care — we are disappointed for this action, especially at such an economically challenging time for ATI.
“We remain dedicated to serving our customers and continuing to safely operate in the manner necessary to deliver our commitments through the use of our non-represented employees and temporary replacement workers.
“We will continue negotiating to reach a competitive agreement that rewards our hard-working employees and positions ATI to succeed in the future.”

Supply squeeze

As we’ve noted in previous reports — including the Monthly Metal Outlook — industrial metal buying organizations are facing serious challenges in procuring metal. On top of that, steel prices have continued to skyrocket. Buyers continue to hold out hope that steelmakers will bring new supply onstream.
In addition, soaring freight rates have also made imports a costly proposition, too, leaving buyers in a tough spot. The ATI strike only exacerbates an already difficult situation.
Meanwhile, Katie Benchina Olsen, MetalMiner senior stainless analyst, indicated lost production from the strike will be difficult to fill.
“Neither NAS nor Outokumpu have the capacity to undertake filling in for the ATI strike,” she said. “My opinion is that we may see some manufacturers run out of metal or have to substitute with another stainless alloy or maybe even another metal.”
Furthermore, in December, ATI already announced plans to exit the standard stainless steel sheet market.
“The announcement comes as part of the company’s new business strategy,” MetalMiner Senior Research Analyst Maria Rosa Gobitz wrote. “ATI will focus on investing in enhanced capabilities on higher-margin products, primarily in the aerospace and defense industries.”
Furthermore, the move leaves a gap for 201 series materials, she added.

Shifting focus

In its December announcement, ATI said it would exit the aforementioned market by mid-2021. Furthermore, ATI said the product line brought in $445 million in revenue in 2019, at margins of less than 1%.
“In the fourth quarter, we took decisive action to accelerate our future by exiting the low-margin standard stainless sheet product line and redeploying capital to high-return opportunities,” ATI President and CEO Robert S. Wetherbee said in the company’s Q4 2020 earnings release. “We’ve already made significant progress on achieving that goal. The transformation represents a major step forward to making ATI a more sustainably profitable aerospace and defense-focused company.”
In addition, for fiscal year 2020, ATI reported a net loss of $1.57 billion, compared with net income of $270.1 million in 2019.