Allegheny Technologies Inc. will lay off several hundred workers at three local plants and a research center beginning Sunday because of falling demand for stainless steel from automotive, housing and appliance producers, the company said Friday.
The layoffs at the Allegheny Ludlum Steel plants will remain in effect on a week-to-week basis as the company adjusts production to meet demand, spokesman Daniel Greenfield said. He said the layoffs will affect 20 percent of the workers, but declined to give an exact number or say when they might be recalled.
The layoffs affect the specialty steelmaker's plant in Brackenridge, and its adjacent plant in Natrona in Harrison, where steel scrap is melted for steelmaking. Those plants have about 1,100 workers. It affects a cold-rolled stainless steel plant in Vandergrift, Westmoreland County.
The research facility affected is located in Harrison.
One plant not affected by the layoffs is a mill in Bagdad, Armstrong County, because it finishes electrical steel used in the power industry, Greenfield said.
The layoffs will not alter Allegheny Technologies' plans to build a $1 billion state-of-the-art hot strip mill at its Brackenridge mill, he said.
"The whole stainless (steel) market is down," Greenfield said. Not only are the end-markets down in terms of demand for autos and appliances, but inventories at service centers are low and are not being replenished, he said. Service centers buy steel from mills, then process and resell it to manufacturers.
"This is a week-by-week thing," Greenfield said. "It's based on the U.S. economy: less demand for steel in cars and refrigerator doors."
In March, Allegheny Technologies had 2,050 employees in four steel mills in northern Allegheny and Westmoreland counties and southern Armstrong County.
Allegheny Technologies Chief Executive L. Patrick Hassey told analysts last week when the company announced results for the July-September quarter that he expected slower demand in the October-December period because of the slowing economy. He did not mention possible layoffs.
The company reported third-quarter profit fell 26 percent because of lower metals prices and demand, and warned that fourth-quarter earnings will be well below a year ago. Profit for the third quarter was $144.1 million, or $1.45 a share, on sales of $1.39 billion, compared to $193.9 million, or $1.88 a share, on sales of $1.33 billion, a year ago.
The company said it expects fourth-quarter results to be in the range of $1 to $1.10 per share, compared to $1.45 per share a year ago.
The layoffs will not affect the work force at Allegheny Technologies' stainless steel plant in Washington, Pa., where about 250 hourly employees work, said Brian S. Ashmore, president of USW Local 7139.
"It has slowed, but right now there's no layoffs," he said.
Allegheny Technologies this spring completed a $60 million upgrade to its titanium and specialty plate plant in Washington County by expanding capabilities and improving productivity. The plant uses specialty steel made at several plants, including Brackenridge, Latrobe and Midland.
Walter Hill, president of USW Local 1196, which represents steelworkers at the Brackenridge plant, and Steve Clutter, president of USW Local 1212 at Midland, could not be reached for comment.
Automotive and appliance steel accounts for 15 percent of Allegheny Technologies' business, according to a report this week by Morningstar Co. analyst Min Ye, who said "commodity-like" stainless steel accounts for about 20 percent of the company's sales.
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