RMI TITANIUM Union questions why company chose lockout over talks

Analysts believe the RMI mill is here to stay despite repeated labor disputes.
THE VINDICATOR
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- Heading into their third week on the picket line at RMI Titanium, union leaders say workers are questioning why the company is keeping them on the street instead of letting them work while negotiations continue.
Another round of talks for United Steelworkers of America Locals 2155 and 2155-7 was scheduled this afternoon, exactly two weeks since RMI managers escorted hourly employees out of the plant and locked the gates.
"I can't figure out why they chose to make the moves they've made," said Todd Weddell, president of Local 2155 which represents RMI production workers. "We're all wondering: 'Why?'"
Weddell said morale has generally been good among the 360 hourly workers, who've been manning informational pickets at two gates outside the Weathersfield Township mill.
But there are worries, too, he said, about making ends meet without a paycheck and about the plant's future.
Company officials are talking through press releases that emphasize the need to be competitive and the hope that workers will accept what RMI has called its final contract offer.
Salaried employees are staying at the plant around-the-clock and performing production work.
A money-saver?
Ray Raschilla Jr., unit chairman of Local 2155-7 representing technical and clerical workers, theorized the company may see the lockout as a money-saver, since the mill already was scheduled for a temporary shutdown in December.
"In my opinion, it's probably cheaper and easier for them to have a lockout than a shutdown," Raschilla said.
Managers have said it's more cost-effective to run the mill at full capacity, stockpile inventory, then shut down for a while, rather than running year-round at reduced capacity. The plant was closed for the month of July, and from Thanksgiving to New Year's Day a year ago.
Brian Jacobs, a Pittsburgh-based analyst who tracks RMI's larger parent company, RTI International Metals, said the union is in a weak position because demand for titanium is so low that it won't hurt the company to be closed for a while.
"Frankly, it's horrible timing on the part of the union," said Jacobs, of Fort Pitt Capital Group. "Given the low level of demand for titanium, I can't imagine that it [the lockout] will negatively impact the company in the current quarter."
He said the workers would have been wiser to wait until the next contract to push for wage increases and other improvements because the outlook for titanium is expected to rally over the next two to four years.
A tough decision
Weddell, the Local 2155 president, said union leaders thought long and hard before deciding not to endorse the company's proposal when they presented it to members for a vote Oct. 25.
"By no means did we go into this lightly," he said. "'There was really no choice. The contract they offered us was purely concessionary."
More importantly, Weddell said, the union did not choose to be on the street. Local 2155 and 2155-7 members are not on strike, and they have repeatedly expressed their willingness to work.
"This is a lockout. This is the company's decision to have us out here," he said.
Looking ahead
As for the plant's future, Cleveland-area analyst Chris Olin said the company is not likely to close or relocate the mill despite what it may see as repeated labor disputes there.
The union's last agreement was reached in 1999 after a bitter, 61/2 month strike, and workers were on the picket line for a week before reaching the previous agreement in 1995.
Olin, a senior research analyst for Longbow Research in Independence, Ohio, called the mill "a bread-and-butter" facility" for RTI International Metals, which also is based at the Weathersfield Township site.
"I couldn't comment on management strategies, but I wouldn't think of this [lockout] as part of a plan to close the plant," Olin said.
Jacobs, the Pittsburgh analyst, said RMI is the only RTI plant that makes titanium from raw materials, and the metal it makes is processed by some of the company's other facilities.
"It would be preposterous to close that plant," Jacobs said. "It's ludicrous to even think that they would do that."
He said RTI has long-term agreements to produce titanium for several military projects, including F-18 and F-22 planes, the new C-17 military transport plane and a new Howitzer cannon. Moving the titanium mill might "rattle" the companies that have ordered titanium for those projects, he said, and also might alarm shareholders.
Titanium is often used for aerospace, weaponry and military equipment because it is stronger and lighter than steel and other metals.
"Unfortunately for the current workers, the most likely outcome I would see would not be closing the plant," Jacobs said. "If push came to shove, it would be replacement workers. I don't think the company is in a position to keep the salaried workers running that plant long term."
vinarsky@vindy.com