PITTSBURGH, May 20, 2019 /PRNewswire/ -- The United Steelworkers (USW) today reacted to an announcement by Arconic (NYSE: ARNC) that its board of directors have authorized an additional $500 million in share repurchases.
"This stock buyback was designed to reward short-term, activist investor Elliott Management and Arconic's senior executives at the expense of hourly workers, salaried employees and long-service retirees," said USW International Vice President Tom Conway, who chairs negotiations with Arconic. "The priorities of Arconic's senior management are deeply misplaced and counterproductive, as the company apparently has enough cash for its executives and stockholders but will not fund its promises to retirees or provide retirement security to active employees."
He pointed out that Arconic has proposed to freeze the pension benefits of certain employees, complaining that its costs are volatile and that its funding has declined.
"Arconic's board of directors approved this additional stock buyback at the same time its management was at the bargaining table demanding concessions in health care and retirement benefits," Conway said. "The pension plan would be fully funded at predictable and modest costs if the company had contributed a fraction of the $900 million in cash used to repurchase shares."
The labor agreement between the USW and Arconic, covering 3,400 employees at four plants, was scheduled to expire at midnight on May 15, 2019, before the parties agreed to an extension. The union has a right to strike on 24 hours' notice.
The USW negotiating committee is meeting with local union members this week to review the company's proposals and discuss the union's next steps.
The USW represents 850,000 men and women employed in manufacturing, metals, mining, pulp and paper, rubber, chemicals, glass, auto supply and the energy-producing industries, along with a growing number of workers in public sector and service occupations.
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SOURCE United Steelworkers (USW)