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Bad blood in ATI lockout expected to linger

| Tuesday, Feb. 23, 2016, 11:00 p.m.

The repercussions of a bitter contract battle at Allegheny Technologies Inc. could linger for some time even if the United Steelworkers accept a tentative deal and return to work.

The relationship between the union and the company was damaged by a six-month lockout and the hiring of replacement workers that fueled hostility from the rank-and-file. Management blamed a severe downturn in the steel industry in demanding concessions, but the union said it was an excuse to erase decades of labor gains. Union leaders weren't restrained in their criticism, saying the company's problems were caused by “reckless and irresponsible management.”

The bitterness was underscored Tuesday as workers directed anger at ATI's top leaders for the strife despite a settlement that, if approved by 2,200 union members, would return them to their jobs a few weeks after unemployment benefits started to run out.

“I know that there is a lot of hard feelings toward the management, and not the local management, but the upper management for what they've done,” said Terry Stinson, a member of USW Local 1138 who works at the Vandergrift plant.

“I don't see how it is going to get back to the way it was before the lockout,” he said. “I think there are going to be a lot of hard feelings for quite some time.”

Neither side has detailed the terms of the agreement, which the union is expected to vote on in two to three weeks. Dan Greenfield, a spokesman for ATI said the company would not comment until after the union votes on the agreement.

The deal, announced late Monday, would allow ATI to settle a potentially costly unfair labor practices case and return its focus to improving the business at a time when the steel industry has been clobbered by low prices, weak demand and cheap imports.

Adding to pressure on the union, unemployment benefits for about 1,700 locked out ATI workers began to run out Feb. 15. The company stopped paying for health insurance in November.

The acrimony caused by the dispute isn't likely to fade quickly and could have negative implications for the company's turnaround, experts said.

“ATI's approach to labor relations is the worst kind of destructive approach that a company can have, and it can have long-lasting implications,” said Paul Clark, a Penn State professor and director of the university's School of Labor and Employment Relations. “What the steelworkers have been through these last six months, that doesn't go away easily.”

John Tumazos, an analyst and owner of Tumazos Very Independent Research in Holmdel, N.J., suggested that the ill will may flow the other way because the union was unwilling to offer concessions when ATI was hurting financially.

The company in January reported a 29 percent drop in fourth-quarter revenue and a $227 million loss driven by one-time expenses related to the declining value of its Flat Rolled Products unit.

“Allegheny said they needed concessions, and I think they were telling the truth,” Tumazos said. “Their numbers haven't been good.”

The lockout, which started Aug. 15, was the biggest and longest in Western Pennsylvania in decades. In 2008, about 350 employees were shut out of Latrobe Specialty Steel for 81 days. In 1986, U.S. Steel Corp. barred 22,000 workers, including thousands in Pittsburgh, from mills across the country for six months.

ATI sowed resentment by running the dozen Flat-Rolled Products plants with salaried and temporary workers, a move that workers criticized as a waste of money.

“What they did with spending the money that they did with the scabs, what they did to the community. Who made out on this? Tell me who the winner is?” said Dave Rodgers, a USW Local 1196 member at ATI's plant in Harrison.

Clark said many employers benefit from engaging their workers on ways to make improvements, increase productivity and cut costs, but ATI will have trouble building a collaborative relationship with Steelworkers members.

“Now you have a settlement with a workforce that is — to use the word disgruntled is an understatement,” he said.

A change in management, or at least a radical turnaround in how ATI's leaders approach the union, could make a difference, Clark said. But even then, it will take time.

Dale Belman, a Michigan State University professor of labor relations, said sometimes, particularly bitter labor disputes can lead to better relations between workers and management.

“I have see that happen, where you beat one another bloody and decide that wasn't much fun,” Belman said. “Sometimes people learn, and they can really change the nature of their relationship.”

The agreement followed the filing of a complaint less than two weeks ago by the National Labor Relations Board that alleged ATI engaged in unfair labor practices and illegally locked out its workers. A hearing was set for May 23. The union said it has agreed to drop the charges that resulted in the action by the NLRB.

Clark said it is likely that the NLRB case pushed ATI to make a deal.

A key to winning support from rank-and-file for the deal — and improving relationships — would be an agreement by the company to reverse its decision to close a plant in Midland and the Bagdad plant in Gilpin, said Stinson, the worker from the Vandergrift plant.

To deal with weakness in the steel industry, ATI in December announced the closure of the Midland and Bagdad plants, which would affect about 600 steelworkers.

“They need to make sure that those folks continue to have employment,” Stinson said. “As long as they take care of the folks from Bagdad and Midland, I think that is a big step, whether they are union or salaried.”

Alex Nixon and Tom Yerace are Tribune-Review staff writers. Reach Nixon at 412-320-7928 or anixon@tribweb.com. Reach Yerace at 724-226-4675 or tyerace@tribweb.com.

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