Sunday, June 18, 2000

AK Steel stokes Middletown economy

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'God forbid they should ever leave'

By John Nolan
The Associated Press

        MIDDLETOWN — AK Steel Corp. is so essential to this city and the region's economy that mere speculation the company might leave town triggered shock waves.

        Four years ago, union leaders at the Middletown Works mill sounded an alarm about the company's decision to build a $1.1 billion steel finishing plant near Rockport, Ind. — rather than in Middletown, which wanted the plant.

AK STEEL CHIEF EXECUTIVE OFFICER RICHARD M. WARDROP JR. (Associated Press photo) | ZOOM |

        But AK Steel's blast furnaces and production lines remain busy in Middletown, where the company began making steel a century ago. The 3,150 union production workers at Middletown Works have a contract through February 2006 with profit-sharing and bonus programs.

        Lively demand for pickup trucks and sport utility vehicles is stoking sales.

        Richard M. Wardrop Jr., AK Steel's chairman and chief executive officer, says the company considers the Butler County city of 54,000 people a good place to do business, with an experienced work force.

        “Do I have confidence in these people? Absolutely. Do I have faith that we'll be here and working with these guys 10 years from now? Absolutely,” Mr. Wardrop said.

        Those words are music to civic leaders who prize the company's $60,000-a-year manufacturing jobs.

        “They've enabled thousands of families to have a part of the American dream,” said Mike Fox, a Butler County commissioner. “They have a tradition of community involvement. That's hard to replace.

        “God forbid they should ever leave. I can imagine it, and it's not a pretty picture.”

        AK Steel invested $500 million during the mid-1990s in upgrading its Middletown and Ashland, Ky., steel mills.

        It donates hundreds of thousands of dollars to community programs. Its employees provide 25 percent of the annual United Way charity collection. George Verity, who founded the company in 1900 and oversaw Middletown's growth, got the United Way started in the community in 1923 by helping to raise $1 million that year.

        The company is donating the stainless steel to cover a concert pavilion along the Great Miami River. The city is to install the roof for a Labor Day celebration of a century of Middletown steel making.

        Elsewhere, AK Steel has some bitter opponents, especially in Mansfield, Ohio, where more than 600 union workers have been locked out since Sept. 1 in a contract dispute.

        The company has sued the United Steel Workers union, accusing it of backing violence for years against the company and others during labor issues. Union officials deny the allegations. The case awaits trial.

        An AK Steel shareholder's lawsuit accuses company management of understating problems that caused its stock price to drop in January.

        This month, federal environmental regulators criticized AK Steel for polluting a western Pennsylvania stream with nitrates, and demanded the company provide residents bottled water. The company has a permit to release waste water from its plant into the stream, but will work with the government to fix the problems, Mr. Wardrop said.

        AK Steel expanded its stainless steel production capabilities and nearly doubled its work force with its September acquisition of Armco Inc. The Armco deal amounted to a reunion, since Armco was the company's old name before it split off to leave what became AK Steel.

        Ed Shelley, the Armco Employees Independent Federation union president who oversaw negotiations for the Middletown Works contract, still wonders why the company chose to build the Rockport mill when the Middletown plant had done the same type of work.

        Mr. Wardrop said the company wanted more capacity in steel finishing, a more profitable business. And it could bring in raw materials more cheaply by Ohio River barge to the southern Indiana site than by rail or truck to Middletown, he said.

        “There's still a lot of land there,” Mr. Shelley said of the Rockport site. “As the company would modernize, our concern is that they would do it here as well.”

        The Rockport mill provides flexibility to roll stainless or carbon steel the same day, depending on market demand. It also is 40 miles from a major customer, Toyota Motor Corp.'s pickup plant in Princeton, Ind.

        Rockport is a complement to Middletown, Mr. Wardrop said.

        “Everything I said back in '96 has come true,” he said in an office decorated with hunting trophies including deer, a wild boar and other game. “I said we were staying. I said I would ask more out of Middletown, rather than less. That's happened. I said Rockport would be a success and drive our business. That's happened.”

        The Rockport plant occupies about 500 of the 1,700 acres the company bought in southern Indiana. Some of the land was intended as a permanent, green-space buffer between the plant and community.

        Tenant farmers remain on about 500 acres. Mr. Wardrop said he sees no change in that land use soon, although he declined to discuss the longer term.

       

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