Workers Locked Out By AK Steel

Union members wave to supporters as they picket at AK Steel shortly after the company locked out it's hourly workers after failing to reach an agreement on a new contract, Wednesday morning, March 1, 2006, in Middletown, Ohio. Nearly 2700 union workers are affected by the lockout. (AP Photo/David Kohl)
AP Photo/David Kohl
AK Steel employees locked out after their labor agreement expired chanted "United we stand!" and received signs to wear while they picket at the plant's gates.

With negotiators unable to reach a new contract by the midnight deadline, the company locked out nearly 2,700 hourly workers early Wednesday.

Union leaders informed hundreds of employees who had gathered to wait for the news. Police reported no problems after the lockout was announced.

AK Steel will use salaried and temporary replacements at its Middletown Works to continue filling orders for its customers, spokesman Alan McCoy said.

"They've counted on us for 105 years," he said. "We'd like to continue serving them for another 105."

Union members had recently voted overwhelmingly to authorize their leadership to call a strike if negotiations on a new contract failed. Many of those gathered said they weren't surprised by the lockout because the company had been making preparations, such as training replacement workers.

"We kind of expected it," said Scott Prater, a six-year employee. "We've had a long time to prepare for it too."

The two sides began negotiating Nov. 30, and tensions rose as the deadline approached at this southwest Ohio city's largest employer.

The company has said reducing the work force is among things AK Steel must do to remain competitive in the increasingly global steelmaking industry.

The company wanted to follow the contract model negotiated last year at its Ashland Works in Kentucky. That contract froze the company's pension plan, reduced the number of job classifications so that workers can handle more duties, eliminated guarantees on the number of workers at the plant and increased employees' share of health care expenses.

The union said some 400 hourly jobs have already been cut at the plant in the past two years.

Brian Daley, president of the Armco Employees Independent Federation, said the union had offered to continue working under the terms of the existing contract, but the company refused. He said both sides agreed to continue negotiating, but no talks had been scheduled.

"We have been trying to do everything we can to get a contract," Daley said.

The company went through a heated 39-month standoff with workers at its Mansfield, Ohio, plant. AK Steel's predecessor, Armco Inc., locked out some 620 hourly workers belonging to the United Steelworkers of America on Sept. 1, 1999.

AK Steel acquired Armco and continued to operate the plant with replacement workers. There were numerous clashes and arrests before the lockout ended.

AK Steel produces flat-rolled carbon, stainless and electrical steels, along with tubular steel products, for customers in the automotive, appliance, construction and manufacturing markets, with sales totaling $5.65 billion in 2005.

Besides its hub in Middletown and the Mansfield and Ashland plants, AK Steel has operations in Zanesville and Coshocton in Ohio and at Rockport, Ind., and Butler, Pa. The company also faces contract negotiations this year with workers in Zanesville and Butler.

For 2005, AK Steel Holding Corp. posted a loss of $2.3 million, or 2 cents per share, compared with net income of $238.4 million, or $2.18 per share, the previous year.