Allegheny Technologies Inc. has laid off 209 hourly workers and supervisors at its Allegheny Ludlum stainless steel plant in Midland, Beaver County, and says the layoffs could last six months or longer.

The layoffs at Midland are in addition to several hundred announced in late October that affect employees at plants in Brackenridge, Harrison and Vandergrift and at the research and development facility in Harrison, though the work force at those locations fluctuates.

The steel company blamed all the furloughs on a downturn in customer orders, due to the nation's slumping economy.

In letter to the state Department of Labor and Industry, John Scarfutti, vice president of human resources for Allegheny Ludlum, said this month that "unprecedented economic conditions have caused a sudden and unexpected reduction in our business" and this led to the Midland layoffs. Four supervisors were let go, while 205 hourly workers were furloughed, according to the letter.

"We have about 230 people in the plant, and there are now about 10 working," Steve Clutter Sr., president of USW Local 1212 at Midland, said Tuesday. "We knew this was a long-term layoff. You don't have to be a genius with this economy to see that orders went south."

Specifically, Scarfutti said in his letter that:

• During the final three months of 2008, customer orders for stainless steel sheet dropped 50 percent below the company's business plan and haven't recovered.

• Shipments of appliances, a key user of Allegheny Ludlum's products, are down 40 percent in the second half of the year compared to the first half.

• Fourth-quarter sales of automobiles, another key industry for Ludlum, are off 30 percent to 40 percent from one year ago.

Steel production nationwide has fallen through the floor, according to American Iron and Steel Institute data. Raw steel production for the week ended Dec. 20 was off more than 50 percent to just above 1 million tons, from more than 2.1 million tons one year ago. Plant utilization fell to 42.9 percent, from 88.1 percent a year earlier.

The hourly worker layoffs at Midland began in late August and ended Dec. 21, with the largest numbers of personnel let go on Oct. 19, with 89; and on Dec. 7, with 93 workers let go.

In March, Allegheny Technologies had 2,050 employees in four steel mills in northern Allegheny and Westmoreland counties and southern Armstrong County.

Excluding the Midland plant, actual layoffs vary from week to week, depending on the next week's order book, said Allegheny Technologies spokesman Dan Greenfield.

"As we've been saying, we have a lot of mixed results with our various products," Greenfield said. "Midland is commodity stainless, used in automobiles and appliances and building, so we don't know how long we'll be shut down, how long the economic downturn will last."

Other parts of Allegheny Technologies' product portfolio, including electrical steel manufactured at the Bagdad Works in Gilpin, Armstrong County, and in parts of the Brackenridge facility and the Natrona Works in Harrison have been strong.

"The melt shops and the finishing shops are more week-to-week," Greenfield said. "The 'several hundred' layoffs number first announced in October were for that particular place in time."

With adverse business conditions persisting, and the outlook for at least the first half of 2009 little better, Scarfutti told the state that the layoffs at Midland could last six months or longer. The company said it doesn't expect to rehire terminated salaried personnel.

Local 1212's Clutter said he's remaining optimistic about his people being called back, but right now, "No one is putting up McDonald's (restaurants). No one is buying new appliances because no one is buying new homes."

The layoffs aren't expected to alter Allegheny Technologies' plans to build a $1 billion state-of-the-art hot strip mill at its Brackenridge facility.

United Steelworkers Local 1196, which represents Allegheny Ludlum workers at Brackenridge, states in a Dec. 18 update on its Web site that permits have been approved for road projects related to the new facility.

"We have been assured the company is moving ahead with site preparation, with the goal to begin construction as soon as possible," the union Web site states.

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