ATI locks out Steelworkers over health care contributions
Allegheny Technologies Inc. moved Friday to lock out more than 2,000 union workers amid stalled contract negotiations with the United Steelworkers.
The lockout is the first at steel mills in Western Pennsylvania since 2008 and the largest in about three decades. The company said it would begin at 10 p.m. Saturday, but union officials said it had started Friday.
It followed three months of talks between the Steelworkers and ATI management. Negotiations hit a wall last week when the Downtown-based company proposed a “last, best and final offer” to the union and threatened the lockout if workers did not accept the proposal by Monday.
The union balked at concessions sought by ATI, which included requiring employees to contribute to the cost of their monthly premiums for health care coverage.
The company has argued that it must lower costs to remain competitive in a domestic steel industry hammered by weak demand and low prices. The union has accused the company of using a temporary downturn to force unnecessary benefit cuts.
A total of 2,200 USW-represented employees work at 12 ATI plants in six states. With union workers idled, ATI said it would operate plants — including those in Harrison, Vandergrift and Gilpin in Western Pennsylvania — with salaried employees and temporary staff. About 1,000 union workers are employed at those plants.
In 2008, about 350 employees were shut out of Latrobe Specialty Steel for 81 days. The ATI lockout is the region’s largest since U.S. Steel Corp. barred 22,000 workers, including thousands in Pittsburgh, from mills across the country for six months.
“While progress has been made during contract negotiations on some issues, significant differences remain in critical areas including: health care benefits for current employees; the structure of benefits for employees hired after June 30, 2015; and updates to subcontracting and scheduling rules,” Bob Wetherbee, executive vice president of ATI Flat Rolled Products, said in a news release.
USW officials responded that ATI was trying to “force workers to accept draconian and unnecessary concessions.”
“It’s outrageous that the company has chosen this destructive path, but it is clear that ATI intended to lock these workers out since day one,” USW International President Leo Gerard said in a written statement. “From the beginning, the company has bargained in bad faith to dictate the terms of an agreement.”
The union had agreed to continue working under terms of the contract that expired June 30.
Fran Arabia, president of United Steelworkers Local 1196, which represents employees at ATI’s Harrison plant and its technical center in Natrona Heights, said the company Friday had begun sending some workers home. Speaking from the local’s union hall in Brackenridge, Arabia said some maintenance workers were escorted from the mill.
“It’s on,” he said. “(ATI has) ramped up their security, and I anticipate some time tomorrow they’ll be busing in their scabs.”
ATI spokesman Dan Greenfield said the company started shutting down plants and told workers that they could go home. He said workers have not been escorted from plants. Employees would be paid if they were scheduled to work Friday whether they were needed or not.
“We’re in the process of an orderly shutdown and transition,” he said.
Starting Saturday, he said, the company will begin to bring plants back online with management and temporary workers. “We’re going to bring up the facilities required to continue serving our customers’ needs.”
Arabia said plans to discuss the company’s most recent proposal with members had changed.
“Because of the bad business decisions the company has made, we will instead discuss filing for unemployment and setting up picket lines,” he said.
Union members can apply for unemployment benefits during a lockout. Workers don’t qualify for unemployment during a strike.
There was a somber mood at ATI’s plant in Harrison as employees showed up for work only to find there was nothing to do, said Todd Barbiaux, vice president of Local 1196. Security guards were posted at every exit to make sure workers left and didn’t try to return.
“It’s very offensive,” he said. “They stare you down like you’re a criminal.”
Union members will meet at 11 p.m. Saturday outside the union hall in Brackenridge to discuss their next move.
The union has accused the company of using a downturn in the steel industry — highlighted by low prices and surging imports — as an excuse to gut the labor pact.
The company says its employees are among the best-paid in the industry and its proposal doesn’t affect wages. Union members do not pay monthly premiums for health insurance and have had deductibles of $600 a year for family coverage. ATI had proposed monthly premium contributions starting at $125 a month and increasing to $215 by the end of the four-year contract. That would be coupled with higher deductibles and out-of-pocket maximums.
The union is in talks with U.S. Steel Corp. and ArcelorMittal on contracts covering about 30,000 workers. Those agreements expire Sept. 1, and the companies are seeking similar concessions on health benefits.
John Tumazos, owner of Very Independent Research in Holmdel, N.J., said ATI faces substantial competition from steel producers with non-union workforces and lower labor costs.
“Allegheny is up against it,” Tumazos said. “It’s actually in the workers’ interest to take the deeper cuts. … It will help the company survive.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or [email protected]. Staff writers Tom Yerace and Emily Balser contributed to this report.