Steel Mills

USW Says ATI Behind on Orders; Company Says HRPF Not Impacted

Written by Michael Cowden

The United Steelworkers (USW) union and Allegheny Technologies Inc. (ATI) appear to be far from making a deal as a strike against the company enters its fourth week.

The USW says ATI is under pressure because it finds itself unable to fulfill existing customer orders a result of the labor action.

An ATI spokeswoman said the company is quickly closing any gaps and has been able to meet its commitments when it comes to rolling carbon slabs.

USW“During a time when the market for steel is growing, ATI is on the sidelines due to relentless mismanagement, including the serious unfair labor practices that instigated our strike,” the USW said in an update to members on Saturday, April 24.

“The demand for the products we make is high, and so are the prices,” the union continued. “Because ATI cannot deliver orders and must pass on new business due to the ongoing labor dispute, we are getting calls and inquiries from customers asking for options.”

An ATI spokeswoman chastised the union for continuing the strike. “With a generous offer on the table that includes wage increases and excellent healthcare, we find it incomprehensible that the USW has chosen a path that attempts to jeopardize the stability of critical U.S. manufacturing,” she said in an email on Sunday, April 25.

USW members at ATI went on strike on March 30, alleging unfair labor practices and seeking more generous wage increases and healthcare benefits than the company was willing to offer. ATI reiterated that it has been able to continue operations in the face of the strike with temporary and non-union represented staff.

“We have partnered with our customers to understand their needs against our projected capacity, prioritizing what is most critical to them. Our salaried team and replacement workers have done a phenomenal job restarting operations and ramping production,” the ATI spokeswoman said. “We are on track to meet or are ahead of our ramp plan in most plants and working to close the gaps where they exist.”

The company’s primary business is specialty metals and components for high-end sectors such as aerospace. ATI also toll rolls carbon slabs into coil at its hot rolling and processing facility (HRPF) at Brackenridge, Pa., for a handful of third-party customers, including not only certain domestic mills but also slab importers.

When it comes to carbon slab conversion in particular, the  HRPF is highly automated – and so ATI has been able to meet customer requirements. “HRPF weekly conversion tonnage is at an all-time high, and we are focused on meeting that demand,” the spokeswoman said.

Steel Market Update’s average hot-rolled coil price stands at $1,410 per ton ($70.50/cwt), an all-time high. Other flat-rolled steel products – including cold-rolled coil, coated steels and plate – are also testing new highs.

Sticking Points

The main sticking points are healthcare issues and attempts to replace office and technical employees with non-union represented staff, according to a previous USW update to members.

On the healthcare front, the USW objects to a “two-tier” system that it says would result in new hires paying twice the premiums of current workers.

The USW also objects to premiums being changed from a fixed amount to a percentage of overall costs, something the union says would result in higher premiums.

The union said it had made a counteroffer to ATI on Tuesday, April 20.

“They thanked us for our proposal and told us we had until close of business on Monday, April 26, to accept their offer and left the room, with the threat to make a lesser offer after Monday,” the USW said in the update.

The union referred to the deadline in a separate text to members as a “bad-faith ultimatum.”

ATI objects to that characterization.

“Despite what others may have said, we are really trying hard to get this resolved. We want our employees to come back to work,” the company spokeswoman said.

ATI has changed contract language to protect office and technical staff – namely, by preventing work from being assigned to supervisors, the spokeswoman said.

And the company will not require that new hires join a different healthcare plan than current workers. Instead, ATI will give them the choice to do so. And it will keep premium-free healthcare until 2024, she said.

The proposed shift from a fixed to a percentage-based premium could result in an employee paying lower premiums if their overall healthcare costs are lower, the spokeswoman noted.

She acknowledged that ATI had given the USW a deadline of Monday, April 26, at 5 p.m. ET to accept the company’s offer. Future offers will “reflect the costs incurred by ATI as a result of the strike,” she said.

ATI was more blunt in its own update to union-represented employees.

“In response to the USW’s allegations of bullying, we’d like to emphasize that we’re not the ones who walked out on an already-struggling business that’s trying to weather a pandemic,” the company said in its update.

ATI swung to a $1.57 billion loss in 2020 after recording net income of $257.6 million in 2019. 

By Michael Cowden,

Michael Cowden

Read more from Michael Cowden

Latest in Steel Mills