Allegheny Technologies cutting retiree benefits
Allegheny Technologies Inc., the parent company to Allegheny Ludlum Steel Corp., has announced that the company will no longer pay health benefits for its retired salaried workers beginning in 2010.
The health care plan will remain unchanged through Dec. 31, but beginning next year and continuing through Jan. 1, 2009, the retirees will be responsible for increases that exceed 2004 costs.
For those retirees who enrolled in the ATI retiree health care plan and who are not eligible for Medicare (age 65 or older) on Jan. 10, 2010, ATI intends to provide a $3,300 annual pension supplement, which will be paid monthly until the retiree reaches 65.
Allegheny Technologies spokesman Dan Greenfield said Wednesday that he's unsure how many retirees will be affected. A letter was sent to all those who will be affected by the move, which is being made because of skyrocketing health care costs, Greenfield said.
The company employs about 8,800 union and salaried workers worldwide.
"We've seen double-digit increases," Greenfield said. "When you're fighting double-digit increases in health care, it's pretty hard to make up for that."
Greenfield said that it was a difficult decision that was made after much research and that officials tried to lessen the impact.
He said most of the company's competitors and other companies do not pay retiree benefits.
Last month, the Pittsburgh-based company said it expects to post its first profit in more than two years, propelled by increased demand for flat-rolled stainless steel and a drop in retiree benefit costs.
The company, the biggest U.S. specialty metals manufacturer, said it expects second-quarter net income to be 22 cents to 32 cents per share, compared with a loss of $26 million, or 32 cents, a year ago. Second-quarter earnings will be released July 20.