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Allegheny Technologies Completes J&L Acquisition

06/02/2004 -  

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Allegheny Technologies
Completes J&L Acquisition

June 2, 2004 — Allegheny Technologies Inc. has completed its acquisition of J&L Specialty Steel, LLC assets.

Rank-and-file Steelworkers approved the new collective bargaining agreements by a 62-38% margin.

"Ratification of this agreement ensures a place for USWA members in a more competitive specialty steel industry in North America," said Andrew V. "Lefty" Palm, USWA Vice President of Administration and chair of the union's negotiating committee, who noted that there will be no layoffs at any Allegheny Ludlum facility as a result of the J&L Specialty Steel acquisition.

Instead, explained Thomas Conway, secretary of the USWA's Basic Steel Industry Conference and of the Union's negotiating committee, the agreement includes a Transition Assistance Program to enhance voluntary attrition. TAPs will be offered by seniority to up to 775 workers at Allegheny Ludlum and J&L Specialty Steel operations who decide to retire during the next three years."

The new agreement also:

  • Limits the number of non-represented employees at Allegheny Ludlum to no more than 1 to every 4 Steelworkers.
  • Requires the company to reinvest at least $150 million at covered facilities and maintain the competitive status of the plants.
  • Mandates new requirements to maintain and return work to the bargaining unit.

Closing of the acquisition followed the recently completed ratification of a new progressive labor agreement by United Steelworkers of America (USWA) represented employees at ATI Allegheny Ludlum and at the former J&L facilities.

"Our new labor agreement combined with our acquisition of these assets go a long way to 'fix' our stainless steel business," said Pat Hassey, Chairman, President and CEO of Allegheny Technologies. "We believe we have created a stronger Allegheny Ludlum. Allegheny Ludlum now has a more competitive cost structure. It has modern facilities and a diversified product mix and is capable of shipping in excess of 700,000 tons of flat-rolled products annually. Allegheny Ludlum is well positioned to sustain and enhance its position as one of the premier flat-rolled specialty metals companies in the world.

"Implementation of our integration plan begins today at key facilities in Midland, Pa., and Louisville, Ohio. We welcome the former J&L employees, who will number approximately 400 after a short transition period. This transaction maintains J&L's key capacity in the U.S. flat-rolled stainless steel market. We expect these facilities to have a real impact. They complement and enhance Allegheny Ludlum's manufacturing process.

"The USWA leadership and its represented employees recognized what needed to be done to make Allegheny Ludlum more cost competitive on a global basis. Working together, we were able to construct an agreement that improves Allegheny Ludlum's cost structure, while saving jobs and providing a good compensation package.

"Highlighting the labor agreement is a new work environment. It facilitates implementation of the ATI Business System. New flexible work rules enable efficient modern practices and reduce the number of production and maintenance job grades to 5 from 33. Employees are given broader responsibility and have the opportunity to become more engaged in the business. We believe this modern work environment secures a strong future for Allegheny Ludlum and its employees."

Because of workforce restructuring, one-time Transition Assistance Payments (TAPS) incentives will be offered by ATI to approximately 775 hourly employees who decide to retire over the next 2 1/2 years. The agreement expires June 30, 2007, and replaces existing labor agreements at Allegheny Ludlum and at the former J&L Midland, Pa., and Louisville, Ohio, facilities.

Allegheny Technologies Inc. is one of the largest and most diversified specialty materials producers in the world, with revenues of approximately $1.9 billion in 2003. High-value products include nickel-based and cobalt-based alloys and superalloys, titanium and titanium alloys, specialty steels, super stainless steel, exotic alloys, which include zirconium, hafnium and niobium, tungsten materials, and highly engineered strip and Precision Rolled Strip(R) products. Commodity specialty materials include stainless steel sheet and plate, silicon and tool steels, and forgings and castings.

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