ATI Announces Restructuring Actions to Further Streamline Flat Rolled Products Operations
April 18 2016 - 4:25PM
Business Wire
- Continues process of creating a
smaller, focused, agile, and profitable Flat Rolled Products
segment
- $9 million of first quarter 2016
charges for salaried workforce reductions
- Over $30 million of annual savings from
restructuring actions to begin in the third quarter 2016
Allegheny Technologies Incorporated (NYSE: ATI) today announced
the next phase in the restructuring of its Flat Rolled Products
(FRP) operations with the reduction of approximately one third of
FRP’s salaried workforce through the elimination of over 250
positions. This workforce reduction will be completed by the end of
the second quarter 2016. As a result of these actions, ATI will
record a $9 million severance charge in first quarter 2016 results.
These actions are expected to generate annualized cost savings
benefits of over $30 million beginning in the third quarter
2016.
“Reducing our flat-rolled products business’ dependence on
unprofitable commodity products is a difficult process,” said Rich
Harshman, Chairman, President and CEO. “We believe in U.S.
manufacturing. However, it is difficult for a U.S.-based company to
compete in the global commodity markets, particularly when
significant global overcapacity exists for products such as
commodity stainless steel sheet and grain-oriented electrical steel
(GOES). The restructuring and right-sizing actions we are taking,
while painful for our employees and our company, are necessary to
help secure the future of ATI Flat Rolled Products.
“We are in the process of creating a smaller, more agile,
streamlined, cohesive, and efficient FRP business that will focus
on products and markets with significant technical barriers to
entry. As previously announced, our Midland, PA stainless steel
facility has been idled to reduce our exposure to commodity
stainless steel sheet. Our GOES operation will be idled this month.
These actions improve ATI’s focus on differentiated flat-rolled
products that serve growing global markets. The future restart of
the idled operations depends on future business conditions and
ATI’s ability to earn an acceptable return on invested capital on
products manufactured at these operations.
“The reduction in FRP’s salaried workforce is another step in
our journey to return the FRP business to profitability as quickly
as possible, and to execute our strategy for sustainable long-term
profitable growth. We expect the FRP business to be modestly
profitable in the second half of 2016.”
Allegheny Technologies will provide live Internet listening
access to its conference call with investors and analysts scheduled
for Tuesday, April 26, 2016 at 8:30 a.m. ET. The conference call
will be conducted after the Company’s planned release of first
quarter 2016 results. The conference call will be broadcast, and
accompanying presentation slides will be available, at
www.ATImetals.com. To access the broadcast, go to the home page and
select “Conference Call”. Replay of the conference call will be
available on the ATI website.
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management’s current
expectations and include known and unknown risks, uncertainties and
other factors, many of which we are unable to predict or control,
that may cause our actual results, performance or achievements to
materially differ from those expressed or implied in the
forward-looking statements. Additional information concerning
factors that could cause actual results to differ materially from
those projected in the forward-looking statements is contained in
our filings with the Securities and Exchange Commission. We assume
no duty to update our forward-looking statements.
Creating Value Thru Relentless Innovation®
Allegheny Technologies Incorporated is one of the largest and
most diversified specialty materials and components producers in
the world with revenues of approximately $3.7 billion in 2015. ATI
employees use innovative technologies to offer global markets a
wide range of specialty materials solutions. Our major markets are
aerospace and defense, oil & gas/chemical and hydrocarbon
process industry, electrical energy, medical, automotive, food
equipment and appliance, and construction and mining. The ATI
website is www.ATImetals.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160418006630/en/
Allegheny Technologies IncorporatedDan L. Greenfield,
412-394-3004www.ATImetals.com
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