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Arconic publicly estimates that it will report overall profits of $830 to $900 million dollars in 2019, with free cash flow of $650 to $750 million for the year. The Company and Wall Street estimate that next year will be even better.
The Global Rolled Products and extrusions segment reported $393 million in operating profits for 2018, which is forecast to reach of $437 million in 2019, $485 million in 2020 and $518 million in 2021.
Arconic is profitable and can afford a fair contract. The Company has proposed
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$1,000 bonus, if the offer is endorsed by the Union and ratified by June 15, 2019;
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$2,250 bonus following ratification;
- 2.75% wage increase on June 1, 2020; and
- 3.0% wage increase on June 7, 2021.
The wage increases represent an average increase of 1.9% per year over the three- year contract term. In contrast, according to the U.S. Department of Labor, so far in 2019, wage and salary increases for private sector manufacturing workers have averaged 2.9% and 3.1% for Union-represented workers overall. Arconic’swage proposal falls short.
While these bonuses look attractive, they will be completely offset by taxes and the additional health care premiums and out-of-pocket costs proposed by the Company.