MIDDLETOWN, Ohio - AK Steel Corp., trying to cut costs after two years of losses, has suspended a contract guarantee to employ at least 3,116 hourly workers at its Middletown Works mill, the union and company said.
Company officials told the union they don't plan further layoffs, said Ed Shelley, president of the Armco Employees Independent Federation. Retirements and other workers who left have brought the plant slightly below the minimum in the labor agreement, he said.
The company gave notice Tuesday it won't hire to meet the minimum, AK Steel spokesman Alan McCoy confirmed.
"We're doing everything we can to reduce our costs and return the company to profitability," McCoy said.
Despite AK Steel's entreaties so far, the union has not agreed to reopen any part of the contract for renegotiation. It runs through Feb. 28, 2006.
The entire industry is under economic pressure, and AK Steel has been talking with unions across its system about ways of cutting costs to return to profitability. The company has acknowledged those talks, but declined to discuss them publicly.
In October, AK Steel announced it was cutting 20 percent of its salaried work force, affecting 475 employees companywide, including about 200 at corporate headquarters in this city 25 miles north of Cincinnati.
McCoy on Wednesday declined to say whether AK Steel plans layoffs of hourly employees. McCoy said the contract offers a mechanism allowing the company to suspend the work force guarantee.
Union leaders will review the situation before responding, Shelley said. "The contract requires that they meet a certain obligation," he said.
AK Steel has reported losses in seven of its last eight quarters. The company reports its financial results for the fourth quarter and all of 2003 on Jan. 30.
The Middletown-based company employs about 8,500 people. It makes flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing, as well as tubular steel products.
AK Steel operates steelmaking and finishing plants in Middletown, Coshocton, Mansfield, Walbridge and Zanesville in Ohio; Ashland, Ky.; Rockport, Ind., and Butler, Pa., operates an industrial park along the Houston ship channel and owns Douglas Dynamics, which makes snowplows and salt spreaders.
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