AK Steel Lockout No Bargain for Shareholders
July 24, 2006
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Middletown, OH, July 24, 2006 – The nearly five-month long lockout at AK Steel in Middletown, OH has cost Southwestern Ohio communities more than $100 million in economic activity, but the biggest losers could be AK Steel Corp. shareholders.
Lost sales, late deliveries, concerns about the quality of the steel being produced by replacement workers and the ill will of customers and community all add up to costs that will not be fully reflected in the company’s second quarter report, scheduled to be released on July 25, 2006.
“This lockout should have been settled weeks ago,” declared Brian Daley, president of Armco Employees Independent Federation (AEIF), the independent union representing 2,700 workers at AK Steel. “The company is unnecessarily prolonging the dispute and I believe shareholders deserve an explanation.”
Management locked out employees on Feb. 28, 2006, after failing to come to terms on a new contract. The company has maintained partial operations at the plant, producing steel of dubious quality with 1,500 managers and inexperienced replacement workers.
Unresolved issues at the start of the lockout included health care costs, work rule changes, finding a replacement for the company’s under-funded pension plan and training concerns at the Middletown facility.
“The union has, and we continue to make, serious proposals that address management’s concerns. Our members know that their jobs and their community depend on the continued profitability of the Middletown facility,” said Daley.
In May, AEIF officials proposed affiliation with the Maryland-based International Association of Machinists and Aerospace Workers (IAM) to allow workers access to the IAM’s multi-employer pension plan with nearly $8 billion in assets.
Locked out AEIF members at AK Steel quickly embraced the pension proposal and a majority signed authorization cards calling for an election to make the IAM their new representative. The election is scheduled for July 26-27.
“The employees and shareholders at AK Steel have a common interest in the long-term success of this company,” said Daley. “It’s bad business for management to let this dispute go on one day longer than necessary.”
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