RMI TITANIUM Analysts: No tie between lockout, RTI stock increase

RTI International stock hit record highs just days after contract talks broke down.
THE VINDICATOR
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- Stock values have been climbing for RTI International Metals, even as union workers at its affiliate RMI Titanium complete their 11th day of informational picketing outside the Weathersfield Township plant.
The stock reached record 52-week highs three times last week in the days after members of United Steelworkers of America Local 2155 voted down what the company called its final contract offer. About 380 hourly workers have been locked out of the titanium mill since Oct. 26.
But analysts say there's little or no relationship between RTI's improving share values and the labor troubles at its titanium mill.
"The stock's performance is driven more by the economic outlook in its peer group," said Chris Olin, a senior research analyst for Longbow Research in the Cleveland suburb of Independence. "You'll see that steel and aluminum stocks are moving up too."
Olin said the worker lockout is "a near nonissue" for investors because managers had planned to shut the mill down for the month of December anyway. Officials have said it's more cost-effective to run the mill at full capacity, stockpile inventory and shut down for a while, rather than running year-round at reduced capacity.
The facility was idle from Thanksgiving 2002 through Jan. 2 of this year, and a similar schedule was planned for this year, Olin noted.
Demand for metal stocks
Brian Jacobs, an analyst for Fort Pitt Financial Group in Pittsburgh, agreed that RTI's stock performance is related to the general upturn in demand for metals stocks.
Metals industry stocks have increased in value by 36 percent over the past year, according to Yahoo.com, and metal mining stocks have risen 47.8 percent in that period.
In fact, Jacobs said RTI's 52-week performance range could be considered moderate compared with its peer group companies. "It's not quite as fast growing as some others," he said, theorizing that RTI's dependence upon the still-sluggish commercial aerospace industry has held its profits down.
The Pittsburgh-based analyst also dismissed the idea of any connection between the workers on the picket line at RMI Titanium and the rising stock prices. Investors tend to see work stoppages as temporary issues, so they seldom affect share values, he said.
Union spokesman Ray Raschilla Jr. said a federal mediator has arranged a negotiation session with company representatives Sunday, the second session since the company asked workers to leave their jobs at the plant Oct. 26. Raschilla is unit chairman of USWA Local 2155-7 which represents RMI's technical and clerical workers and negotiates with Local 2155 representing production workers.
Upcoming meeting
Local 2155 president Todd Weddell said union leaders will meet Nov. 17 with representatives from the Ohio Department of Job and Family Services to argue that the RMI workers should qualify for state unemployment compensation. If the department ruled the situation a lockout, workers would qualify, provided they met other criteria; if it were ruled a labor dispute, they would not qualify.
Weddell said state officials will have 10 days to make a decision on the matter, so workers should know by the week of Thanksgiving whether they will be receiving jobless benefits. After 30 days, he said, workers will also qualify for some financial help from a USWA strike and defense fund.
vinarsky@vindy.com