ATI’s illegal lockout ends after union members ratify new contract

Members of the United Steelworkers (USW) at 12 Allegheny Technologies Incorporated (ATI) plants in six states ratified by a five to one margin a new collective bargaining agreement.

The ratification vote ends a six-month lockout that the National Labor Relations Board (NLRB) said was illegal.

The workers will return to work on March 13.

The NLRB on February 12 issued a complaint charging ATI with illegally locking out its 2200 union workers.

Ten days after the NLRB ruling, the company and USW reached a tentative agreement that members ratified on March 1.

“(The agreement) doesn’t solve all our problems, but it’s definitely a victory for the union considering what the company wanted to do to us,” said Walt Hill, a USW Local 1196 member and the union’s contract coordinator to the Pittsburgh Tribune.

When bargaining began last spring, ATI, one of the world’s leading producers of specialty steel and other metal products, proposed a list of 145 concessions that USW said would “cost workers thousands of dollars a year and erode decades of collective bargaining gains.”

After months of bargaining, the union pared down the list of concessions, but on August 6, ATI presented its last, best, and final offer to USW negotiators and issued an ultimatum: Present the offer to your members by August 10 and recommend ratification.

The company’s offer still contained a long list of concessions including a two-tiered wage system that would lower wages for new workers, new, much higher health care costs, the removal of restrictions on outsourcing work, changes to the grievance procedure, and the elimination of retiree health care.

As a result, the union refused the company’s ultimatum.

On August 15, the company locked out its workers. The lockout affected ATI plants in Western Pennsylvania; Albany, Oregon; Lockport, New York; Louisville, Ohio; New Bedford, Massachusetts; and Waterbury, Connecticut.

Evidence suggests that ATI had been planning the lockout for some time. Before the lockout began, the company began hiring replacement workers and extra security guards.

After being locked out, ATI’s workers took up their positions on picket lines outside of the company’s factories and stayed there even as winter set in and temperatures fell below freezing.

Meanwhile, USW filed unfair labor practices charges against ATI.

In December, the NLRB informed the union that it would file an unfair labor practices complaint against ATI for initiating an illegal lockout and for bad faith bargaining before and during the lockout.

“In all my years as a negotiator, I have never seen a company engage in such obvious bad-faith bargaining,” said USW’s lead negotiator International Vice President Tom Conway after the NLRB informed the union of its intentions.

Nearly two months later, the board filed its complaint and scheduled a May hearing with an administrative judge.

Had the complaint been heard and had the judge concurred that ATI’s lockout was illegal, the company would have had to compensate workers for their lost wages, benefits, and other losses resulting from the lockout.

After workers ratified the agreement, the NLRB dropped its complaint against ATI.

When bargaining on the new agreement began, the union was facing some difficult circumstances.

The decline in oil prices and the subsequent cutbacks in oil exploration had weakened the demand for products that ATI sold to the oil and gas industry, its second biggest customer.

Sales to the industry had declined by 34 percent.

Furthermore, worldwide overproduction and a resulting glut, reduced demand for its flat-rolled metal products by 60 percent.

As a result, the company’s net income for the past two years has been negative.

Entering negotiations, ATI was looking to reduce labor costs and used the temporary lack of demand for it products as an excuse.

While the company was telling workers that business was bad and they needed to accept concessions, it was telling a different story to investors.

According to the company’s 2014 annual report, the company’s future was bright, a quick turnaround was on the horizon, and the company would be profitable again soon, perhaps as  early as 2016.

The collective bargaining agreement that the two sides finally negotiated does provide ATI with some opportunities for lowering its labor costs.

ATI will be able to reduce its pension liabilities because new hires will no longer be eligible for the union workers’ defined benefit pension, and the workers’ health insurance plan will  no longer pay 100 percent of health care expenses after deductibles are paid.

The new health insurance plan covers 90 percent of the costs and workers will pay the rest until reaching the maximum for out-of-pocket expenses–$15oo for individuals and $3000 for families.

But workers will now be eligible for quarterly profit-sharing bonuses, a feature that the union was able to restore after the company succeeded in eliminating them in a previous collective bargaining agreement.

Workers will also receive a $1 an hour increase in their base pay, and the company will pay another $0.50 an hour to the Voluntary Employee Benefits Account that funds the retiree health care benefit.

The company will pay a modest signing bonus and agreed to contract language saying that it will not eliminate jobs by outsourcing them.

Western Pennsylvania ATI workers interviewed by the Pittsburgh Tribune said that the final agreement was better than they expected.

“Overall, it’s not a bad contract,” said Kirby DeCroo to the Tribune. “It’s (better) than what they were trying to jam down our throats.”

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USW, Big Steel face off

Members of the United Steelworkers (USW) on September 1 staged solidarity rallies in six states in response to Big Steel’s threats to undermine the future of steelworkers, their families, and their communities.

Thanks to 75 years of union struggles, work in the nation’s steel mills can provide a decent living. The benefits of these good jobs spill over into the communities where union members live.

But the nation’s two biggest steel companies, US Steel and Arcelor Mittal, are taking a hard line as the union and the two companies negotiate new collective bargaining agreements. The companies want the workers to agree to major concessions.

Union contracts have expired at both companies, but steelworkers continue to work while bargaining continues.

Another company, Allegheny Technologies Incorporated (ATI), one of the largest producers of specialty steel and other specialty metal products, has gone one step further by locking out its 2,200 union workers at eleven plants in six states.

The lockout began on August 15 after ATI workers refused to accept concession demands from the company that included take-home pay cuts, benefit cuts, more outsourcing, and more forced overtime.

On top of that, ATI wants to deprive future steelworkers of hard-won gains that steelworker solidarity has achieved.

If ATI, which reported $4.2 billion in revenue for 2014, succeeds in imposing its concession demands, it’s hard to imagine that US Steel and Arcelor Mittal wouldn’t want to do the same.

“This is a fight not just for active steelworkers or retirees,” said Dave McCall, USW District 1 director at the September 1 rally in Pittsburg. “It’s a fight for the future.”

To emphasize his point that the future of the next generation of steelworkers is at stake, McCall paused before concluding his statement then as he spoke, held up the young daughter of a nearby union member for all to see.

Among other things, ATI wants union members to accept higher health care costs, no pay raises, the company’s complete control over scheduling and overtime, and an end to bonus payments. (The bonus payments would be replaced by a one-time $1 an hour raise that wouldn’t apply to new hires.)

The company also wants the authority to implement further health care cuts in order to avoid paying the Affordable Care Act excise tax.

Additionally, ATI wants to end its defined benefit pension and its health insurance plan for new hires.

The pension would be replaced by a 401(k) savings plan and the health care insurance would be replaced by a health savings account plan, which among other things requires beneficiaries to pay excessively high deductibles.

New hires also won’t be eligible for the lump sum payments that the company is offering in lieu of a pay raise.

In addition to locking out its union workers, ATI has hired replacement workers to keep its plants from shutting down during the lockout.

ATI, US Steel, and Arcelor Mittal are using a temporary downturn in steel prices as an excuse to demand long-term concessions from their workers.

Like other commodities, the price of steel and other metals produced by these companies fluctuates.

Currently, steel prices are down because of world-wide over production, which has caused a glut on the market.

This glut is primarily due to the economic downturn in China, which has reduced internal demand for steel and other metals in that country and caused China to sell its excess steel on the global market.

Another factor is the drop in oil prices, which has lowered the industry’s demand for steel used in drilling and exploration.

But the current glut won’t persist. According to CAPX, a publication of the Center for Policy Studies, a Thatcherite policy and research center in the UK,

In the long term, commodity prices will recover. The majority of the world’s population lives in countries which have not industrialized, and it won’t be long until they do. Hundreds of megacities around the world are taking shape, and all of these will be hungry for steel, copper and oil.

When the price of steel rises, ATI and the other steel companies will be making big profits again, but if they succeed in forcing their workers to accept their concessions, their workers won’t share in the company’s prosperity.

It won’t just be the workers who suffer. The communities where the workers live and spend their money will also suffer.

One of these communities is Brackenridge, Pennsylvania where one of the ATI plants is located.

Brackenridge has already begun to feel the effects of the lockout.

One Brackenridge business owner Matt Struhar, who runs Maddio’s Pizza and Subs, saw his business drop off by 40 percent after the lockout began.

He posted a Facebook message urging others in the community to support the locked out workers.

The message of support generated a strong outpouring of support for Struhar’s business especially from union members.

To show appreciation for Struhar and his message, one group of union workers drove all the way from Indiana to buy food at Struhar’s restaurant.

The response he received confirmed to Sturhar that supporting the locked out workers was the right thing to do.

“It’s shown me that we really are in this together,” said Struhar in an email message. “We really are our brothers’ and sisters’ keepers. I hope ATI realizes this and ends this unfair lockout soon so we can all get back to work for our community’s sake, and for every community in America that’s depending on good, union jobs.