Specialty metals producer Allegheny Technologies Inc. (ATI) locked out 2,200 union members at 12 plants in six states Aug. 15 — after United Steel Workers failed to respond in time to a company ultimatum. The lockout includes about 180 workers at the former Oremet Wah Chang titanium plant in Albany, Oregon, who are members of USW Local 7150.
A lockout is the employer version of a strike: In strikes, workers withhold their labor; in lockouts, employers withhold jobs.
USW says ATI has been preparing to lock out union members since at least January: Months before nationally-coordinated negotiations on a new set of 12 local contracts began in May, ATI hired outside consultants to recruit replacement workers. And starting in June, some replacement workers were assigned to shadow union members to learn their jobs.
With the level of cuts they’re asking for, if the company’s position doesn’t change, I don’t see this ending any time soon.” — USW Local 7150 staff representative Ron Rodgers
ATI’s final offer would significantly cut health insurance benefits, end retiree health and life insurance benefits for new hires, replace the pension with a 401(k) for new hires, and give the company greater latitude to contract out work done by union members. It would also provide annual lump sum payments of $1,500 instead of hourly wage increases.
ATI also seeks to divide the Albany plant from the others by proposing a three-year contract for Albany, but four-year contracts at other locations.
“The last three contracts, we’ve taken cuts in health care,” said Ron Rodgers, staff representative for Local 7150.
Rodgers said ATI’s latest proposed health insurance cuts would cost workers the equivalent of $5 an hour: Their current insurance plan would be eliminated and replaced with a high-deductible version that would worsen over time. The so-called “consumer-directed health plan” would use a Health Savings Account to pay part of the deductible.
In an unofficial show of hands in Albany, members were unanimous in opposing ATI’s final offer, Rodgers said.
“With the level of cuts they’re asking for, if the company’s position doesn’t change, I don’t see this ending any time soon,” Rodgers said.
U.S. companies like ATI are facing foreign competition, and the markets for stainless steel and titanium are at low points in the business cycle, Rodgers said.
“We think they see it as an opportunity to come in and do sweeping cuts,” Rodgers said.
Company managers haven’t argued that ATI needs to make the cuts to survive, just that making the cuts would bring compensation into line with “the market.” Meanwhile, compensation for the company’s top five executives totaled $19 million last year, including just under $8 million for CEO Richard Harshman.
USW says it offered health insurance concessions worth tens of millions of dollars to the company Aug. 4, the day ATI gave its final offer. And the union never threatened to strike or even conducted a strike authorization vote.
Unlike with strikes, locked-out workers are entitled to unemployment benefits in Oregon (and in the five other states where the ATI lockout is in effect: Pennsylvania, New York, Ohio, Massachusetts, and Connecticut). But the maximum benefit in Oregon is $550 a week, well below the $25 to $35 an hour members make at ATI.
Rodgers said the union expects the company will try to operate the plants using nonunion workers and managers. USW members are organizing pickets outside the plants.