ATI offers 'final proposal' to steelworkers union
ATI told its union workers to take it or leave it on Friday, delivering a final offer in a months-long contract negotiation with the United Steelworkers that could set the stage for a lockout or strike.
The union said it is “disappointed” but is reviewing the offer. Later Friday, the union sent a message to its members saying it is preparing a counter offer to the ATI proposal and believes “there's still bargaining to be done.”
ATI Flat-rolled Products, a part of Allegheny Technologies Inc., the Pittsburgh-based specialty metals producer, employs about 2,200 union workers at 11 plants in four states. About 1,000 are employed in the Alle-Kiski Valley at ATI plants in Harrison, Vandergrift and Gilpin.
ATI said it is offering lump sum payments totaling $4,500 and asking current employees to contribute toward their health insurance premiums.
According to the ATI proposal the United Steelworkers listed on its website, the money is broken up into payments of $1,500 the first year and then $1,000 in each of the next three years.
The health care contributions would start at $125 a month for family coverage in the first year of the contract and rise by $30 each year to $215 a month in the fourth year of the contract, ATI said.
Employees pay nothing toward their premium now.
The company wants to move new hires to a high-deductible health plan with deductibles up to $3,000 a year.
New hires also would get a 401(k) plan that requires employees to contribute toward their retirement instead of an ATI-funded pension that guarantees a lifetime payment.
8-hour day, 40-hour week stay
The company dropped proposals to eliminate a guaranteed eight-hour workday and 40-hour workweek. It also dropped a requirement that workers could be required to work 12-hour shifts and would not receive overtime pay.
“Our final proposal is a fair and competitive solution,” Bob Wetherbee, ATI's executive vice president for Flat-rolled Products Division, said in a written statement. “It will allow us to address serious business issues while still providing opportunities for a secure future for our employees.”
Company officials declined to comment further.
Union wants more talks but...
USW spokesman R.J. Hufnagel declined to say whether the latest offer would be presented to the membership for a vote.
The union has not authorized a strike, he said, and officials offered to continue negotiations.
“Reaching a sensible solution remains our objective here,” Tom Conway, the union's international vice president and lead negotiator, said in a written statement. “This can only be accomplished with good-faith efforts by both sides at the bargaining table.”
Mike Abate, president of the ATI bargaining unit at Local 1138 in Leechburg, said he was surprised by the final proposal “because we're still willing to talk.”
“This day-to-day (contract extension) wasn't going to last forever,” he said. “You'd have to be living in a tree not to realize that.”
... braces for work stoppage
The union this week posted a message on its website to ATI workers urging them to be prepared financially in the case of a strike.
“One of the most important things that you can do to help our union win a fair contract is to take pro-active measures to protect yourself financially in the event of a work stoppage,” the posting stated.
The statement did not indicate whether that means a strike or lockout by the company.
Is offer really final?
It's not uncommon for either side of a contract negotiation to deliver a “last, best and final” offer privately during negotiations, said John Delaney, a professor of labor relations at University of Pittsburgh's Katz Graduate School of Business.
But to do so publicly, as ATI did Friday, shows the company is “trying to send a signal to everyone that, ‘You're not going get more from us, so you're going to take this or go on strike,' ” he said.
ATI contract: A bellwether?
The United Steelworkers union also is in talks with two larger steel companies, U.S. Steel Corp. and ArcelorMittal.
The ATI Flat-Rolled Products division contract was the first to expire and the outcome of the negotiations could be a precedent for the other companies.
All three steel producers are hurting financially from a downturn in the industry and are seeking benefit concessions from the union to reduce long-term costs.
Union officials have been critical of the companies' attempts to link short-term financial challenges with the cost of employee benefits.
John Tumazos, a stock analyst with Tumazos Very Independent Research in Holmdel, N.J., was surprised that ATI would take the step of delivering a final offer now, rather than waiting to see what happens with the talks at U.S. Steel and ArcelorMittal.
The steelworkers contract with ATI expired on June 30. The union agreed to continue working under terms of the previous labor pact.
The contracts at U.S. Steel and ArcelorMittal will expire on Sept. 1.
“(ATI) may benefit from seeing U.S. Steel's or Arcelor's hand,” Tumazos said. “I just wish they took their time and let the other negotiations evolve.”
The contracts cover about 17,000 workers at U.S. Steel, 13,000 at ArcelorMittal and about 2,200 at ATI.
All three companies have reported worsening financial losses in the second quarter, driven by weak demand from oil and gas producers, low steel prices and high imports.
“In the short term, it just doesn't look like a good situation for the companies, and that is probably going to make them more willing to dig their heels in,” Delaney said.