We’re not totally sure just yet what to make of the news that specialty metals producer Allegheny Technologies has moved its headquarters from Pittsburgh to Dallas and, in that process, changed its corporate name to ATI Inc.
But we do know it should be a cold-water-in-the-face wake-up call for Pennsylvania public policy makers at all levels.
The storied Pittsburgh company came to life as Allegheny Steel & Iron in 1901. It later was touted as the first company to use the electric furnace process to make alloys.
It took on the moniker Allegheny Ludlum Corp. in a 1996 merger with Teledyne of California.
The new ATI says the move gives the company “an independent, centralized headquarters location that is expected to strengthen the company’s strategic focus and support the independent functioning of its other hubs.”
And while it will move its Pittsburgh office presence from Six PPG Place in downtown Pittsburgh to a smaller space in a coming new building in the Strip District – a move previously announced — ATI says none of its approximately 1,500 Western Pennsylvania employees are being asked to relocate out of town.
“We are committed to maintaining a strong presence in Pittsburgh. In August, we’ll move into a new enterprise resource center, a progressive workplace … that’s designed for our team’s needs,” spokeswoman Natalie Gillespie told the P-G in an email.
Significant manufacturing operations will remain in the region, the company says. Do note, it did not say “all.”
ATI gave no other reasons for the move.
But Stefani Pashman, the CEO of the Allegheny Conference on Community Development, was quick to point to the deleterious effects of Pennsylvania’s 9.9 percent corporate net income tax, which she correctly referred to as “a flashing red light that often deters companies from doing business here.”
“In light of this news, it is more imperative than ever that Pennsylvania Gov. Tom Wolf and the legislative body of the commonwealth focus on creating a more business-friendly climate in Pennsylvania,” she said in a written statement.
That’s quite the entreaty from an organization historically touting the great “benefits” of taxing our way to prosperity.
By the way, that corporate net income tax, a flat tax, is the second highest in the United States.
Indeed, Texas has no such tax beast and, generally, is considered far more tax-friendly to businesses. And, of course, unlike Pennsylvania, Texas is a right-to-work state, which clearly offers greater manufacturing cost-efficiencies.
Do note that ATI’s headquarters move came without fanfare in a filing with the Securities and Exchange Commission. Some might criticize that as trying to slink out of town unnoticed and/or the sign of a poor corporate citizen. But ATI is no BNYMellon or USAirways. Ahem.
Perhaps, just perhaps, weary of the poor business climate in the state, region and city, it had had enough, threw in the headquarters towel here and decided to see to the best long-term interests of itself, its shareholders and its customers.
Imagine that.
And with all due apologies to Barry Goldwater (if not Aristotle long before him), relocation in defense of success is no vice and subservience to the state in pursuit of survival is no virtue.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
