Pittsburgh-based metals giant Allegheny Technologies Inc. on Wednesday announced a sweeping restructuring that includes exiting the low-margin standard stainless steel products business to focus on more profitable advanced alloys products for aerospace and defense markets.
The impact is being felt locally in Brackenridge, where the company recently shut down a portion of its finishing operations, and in Vandergrift, where ATI is making a multi-million-dollar investment to upgrade the facility to switch entirely to finishing specialty products.
Overall, in addition to the cutback in Brackenridge, plans call for ceasing production at four other facilities in Waterbury, Conn.; Louisville, Ohio; Bridgeview, Ill.; and Pico Rivera, Calif.
Together, the moves will eliminate about 400 jobs, including roughly 180 in the Pittsburgh region.
Besides job losses in Brackenridge, the company made “little adjustments” at facilities in Washington, Pa.; Latrobe; and Vandergrift, spokeswoman Natalie Gillespie said.
Currently, the company employs about 1,500 people in the region.
“We are taking decisive action to become a more profitable company by further sharpening our focus on the highest-value opportunities for our business,” CEO Robert S. Wetherbee said in a statement Wednesday.
“By shedding a low-margin product line and optimizing our footprint, we are redeploying resources to an aerospace and defense-centered portfolio.”
ATI expects to complete the shutdowns and have fully exited the standard stainless sheet products line by the end of next year. That product line — which services the appliance and automotive industries — accounted for $445 million in revenue in 2019 with profit margins of less than 1%, the company said.
“Despite our best efforts, we haven’t been able to earn a profit” on that segment, Ms. Gillespie said. "This has been driven by a number of factors, including global trade issues and the 232 tariffs."
This summer, ATI shuttered its Midland plant in Beaver County, an unintended victim of the steel tariffs imposed on imports by the Trump administration.
The plant specialized in cold-rolling 60-inch stainless steel sheets used in a variety of products from kitchen appliances to car parts. The company imported the nickel-bearing steel slabs it needed from Indonesia — materials hit hard by the tariffs. Buying American was not an option, Mr. Wetherbee has said.
Overall in 2019, ATI earned $257.6 million on sales of $4.1 billion. For the first nine months this year, the company reported a loss of $451.6 million on sales of $2.3 billion.
At Vandergrift, the company plans to invest $65 million to $85 million over three years converting the site to a specialty products facility. The highly automated lower volume lines won’t create additional jobs, Ms. Gillespie said.
“If anything, we could see a slight reduction in headcount [at Vandergrift] by the end of 2022,” she said.
The restructuring will result in approximately $1 billion in noncash charges for asset impairments and $25 million to $30 million in restructuring charges in the fourth quarter, the company said.
Patricia Sabatini: PSabatini@post-gazette.com; 412-263-3066
First Published: December 2, 2020, 7:52 p.m.
