ATI offering retirement to incentive to cut costs

Allegheny Technologies Inc. will be offering a voluntary early retirement incentive in an effort to cut costs, the company announced.

The program will be for eligible salaried, non-union employees, spokeswoman Natalie Gillespie said.

To be eligible, employees have to meet age and service requirements.

The company has not disclosed how many may qualify or what those requirements are. Gillespie said each person who was eligible was approached.

ATI expects severance payments and health care under the retirement program to cost the company $8 million in the first quarter of this year , Gillespie said. That would be in addition to the $4.5 million cost of a restructuring in the fourth quarter of 2019.

The specialty steelmaker said it expects its cost reduction programs, once fully implemented, to save $14 million annually.

Realigning business segments

ATI announced it will also realign its business segments.

Starting this quarter, the company said it is reporting in two business segments: a High Performance Materials & Components segment, which includes its specialty materials and forged products, and a new Advanced Alloys & Solutions segment that combines ATI’s specialty alloys and components and Flat Rolled Products businesses, as well as its aerospace-grade titanium plate products.

The former Flat Rolled Products business is being divided into two businesses, the company said.

The first, specialty rolled products, is focused on specialty alloys and materials for highly demanding and mission critical applications used in ATI’s core markets. The second, standard stainless sheet products, is being restructured to focus on the standard stainless sheet marketplace, using a lean structure enabled by its cost reduction efforts.

The company’s $1.1 billion steel mill in Harrison, commonly called its Brackenridge operation, is part of the specialty rolled products business unit under its Advanced Alloys and Solutions business segment, Gillespie said.

ATI said it is continuing to analyze options and timing to further de-emphasize the role of standard stainless sheet in its product portfolio.

ATI is currently in contract talks with the United Steelworkers union, which represents about 1,300 employees at nine facilities. The last contract between the company and union expired at the end of February. Employees have continued working.

USW spokesman Tony Montana said the union had no comment on ATI’s announcements.

On Friday, the company announced it had paused negotiations due to the coronavirus pandemic and a lack of progress.