Allegheny Technologies Incorporated, Pittsburgh, will exit the standard stainless sheet market to streamline its production footprint and invest in enhanced capabilities to accelerate its push into higher value end markets, the company announced.
“We are taking decisive action to become a more profitable company by further sharpening our focus on the highest-value opportunities for our business,” said Robert S. Wetherbee, ATI president and CEO. “By shedding a low-margin product line and optimizing our footprint, we are redeploying resources to an aerospace and defense-centered portfolio, expanding margins and driving returns to generate significant value for our shareholders.”
ATI expects to exit standard stainless sheet products by the middle of 2021. In 2019, the product line represented $445 million in revenue, but with margins of less than one percent.
The company has continued transforming the footprint of its Advanced Alloys & Solutions business from one designed to support a high-volume strategy to one that emphasizes its advanced capabilities and specialty products to better support its high-value strategy. As it accelerates its transformation, ATI expects to cease production activities at five locations by year-end 2021.
In addition, the company will consolidate its finishing operations by investing in its Vandergrift, Pa., location, creating a more competitive flow path focused on increasing production of high-value, differentiated materials.
Consistent with the company’s strategy of evolving into a leaner organization, and in conjunction with John Sims’ intention to retire, Kim Fields, currently executive vice president of AA&S, will assume responsibility for both the High Performance Materials and Components and AA&S segments, effective Jan. 21. John Sims, who has led the HPMC business since 2013, will continue as senior advisor to the CEO until his intended retirement from the company in 2021, helping to ensure a smooth transition and the company’s readiness to capitalize on the aerospace recovery.