Saturday, September 20, 2003

AK Steel workers fret after shake-up

By James McNair and Janice Morse
The Cincinnati Enquirer

MIDDLETOWN - The day after their top two bosses were dismissed, workers at AK Steel weren't sure Friday how to react.

The steel maker, Butler County's biggest employer, sacked its chief executive, Richard Wardrop Jr., and president, John Hritz, a day earlier, leaving the company's 46-year-old finance chief in charge.

But elsewhere in this city of 51,605, people were reacting - mostly in apprehension.

Mary Dyehouse, who lives less than 200 yards from AK's 2,800-acre Middletown Works, said almost everyone at her yard sale Friday had something to say about the shake-up.

"Mostly people are worried about their jobs," Dyehouse, 63, said. "They figure that if the top two people are going out the door, it might not be long before they're out the door, too."

Yet those concerns aren't entirely new, she said.

"Every conversation you have, people are worried about their jobs out there," said Dyehouse, whose two nieces work at AK. "That's all you hear at church, the stores - everywhere you go."

The steel industry has been a major employer and civic contributor in Butler County for more than a century. AK Steel began as the American Rolling Mill Co. in 1900. Its president then was George Verity, whose name is on a major thoroughfare here.

AK Steel was on the brink of bankruptcy in 1994 when legendary steel executive Thomas C. Graham was hired to turn the company around. Graham, who retired in 1997, brought in a new management team, including Wardrop, which dramatically cut AK Steel's operating costs and refocused the business on flat-rolled carbon steel production.

No workers at Bill's Open Door Cafe, two blocks from AK's sprawling steelyard, were willing to be interviewed on the record about Thursday's executive changes. The workers, who declined to be named for fear of workplace retribution, said they were neither happy nor sad to learn of Wardrop's and Hritz's departures.

None of the workers said they knew the acting CEO, James Wainscott, well enough to rate him one way or the other.

But Wainscott began expanding his visibility Friday.

Among other things, he called Ed Shelley, president of the union that represents 3,100 of AK's 4,000 employees in Middletown. AK spokesman Alan McCoy would not say what the two men said but maintained that Wainscott had begun talking to other employees, too.

"Clearly, we understand that change for some people creates uncertainty," McCoy said. "What we're focused on is change as a positive catalyst. That's the message that is going to employees."

Rumors have circulated for years - some fueled by AK itself - that AK would cut costs by shutting down its melting operations here and buy rolls of steel from other manufacturers. The melting operation accounts for about 1,000 of the company's local employees.

Lately, the company has blamed a litany of costs - raw materials, production, pensions, health care and environmental compliance - for losses totaling $612 million in the past year. Those problems, as well as a depressed stock price, have prompted some workers and outside contractors to assess their futures with pessimistic overtones.

Ed Berry, who works for a company that does pipe work for AK, said any belt-tightening by the steel maker could hurt the livelihood of its many contractors.

"We've heard from a number of sources that the contractors are going to be laid off," Berry said. "They've already taken some jobs away. We had a job coming up, and we found out that they took it away and gave it to (AK's) pipe shop."

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