ATI to invest up to $85M in Vandergrift facility, phase out production of standard stainless steel

ATI said Wednesday it will phase out production of standard stainless steel sheet products and end finishing operations at its Brackenridge plant in Harrison as it shifts its focus to specialty rolled products.

While finishing operations will end at the massive Brackenridge works, the $1.1 billion Hot Rolling & Processing Facility there is not affected and “remains a critical asset, especially to our specialty rolled products operations,” spokeswoman Natalie Gillespie said.

At the same time, Gillespie said the company will be investing $65 million to $85 million in its Vandergrift facility to convert its operations there to specialty rolled products.

There have been three primary functions at the Harrison steel mill — melting, rolling and finishing — plus assorted support services. Gillespie said the finishing aspect is being idled. She said there will be further reductions taken in melting.

In addition to Brackenridge, other affected ATI facilities are in Connecticut, Ohio, Illinois and California. Equipment from some of those locations will move to Vandergrift, along with new equipment, Gillespie said.

The consolidation of finishing operations will see 400 jobs cut between now and the end of 2021, with fewer than half of those in the Alle-Kiski Valley, Gillespie said.

“We’re trying to give people as much notice as we can,” she said. “It’s going to take us time to build up those capabilities at Vandergrift.”

Since 2019, and with the cuts to come, ATI will have shed 800 jobs from its specialty and standard rolled products operations, according to Gillespie. Employment in the Pittsburgh area will have decreased from 1,700 at the end of 2019 to 1,500 at the end of 2021.

The hourly employees, representing about 80% of the cuts, are represented by the United Steelworkers union.

”We were certainly surprised and disappointed with the announcement, and we are currently assessing the impact on our members,” USW International Vice President Dave McCall said.

“Obviously, the business has been negatively impacted by the downturn in the economy and the effects of covid, but management’s drastic announcement regarding the realignment of operations is a short-term, knee-jerk reaction instead of a long-term view that will sustain a viable business,” McCall said.

Gillespie said ATI is consolidating its footprint so it can focus what it does in fewer locations that are more efficient.

Standard stainless steel is produced at high volume for products such as appliances and vehicles.

Specialty stainless is made for highly specialized products such as consumer electronics and solar panels, where it needs to be extremely thin and possess specific properties.

ATI said it will get out of low-margin standard stainless sheet products by mid-2021 in favor of specialty stainless where the return is higher. The company is also doubling down on its investment in specialty products, such as titanium and nickel products, that Gillespie said few companies can make and on which customers place high value.

The company started shifting Vandergrift from standard to specialty stainless earlier this year, Gillespie said.

“The reason we’re building out Vandergrift is because it’s really well-positioned,” she said. “Its proximity to Brackenridge is significant. That will help flow time. The two facilities are connected by rail — that’s a big operational efficiency. We don’t have to load things on trucks.”

Despite the changes, employment will not increase at Vandergrift because the upgrade is highly automated and focused on lower volume, Gillespie said.

“We’re really working hard to make this a profitable business,” she said. “We’re trying to make sure that we emerge stronger from the downturn, and this is a business that’s here for years to come.”