By Janice Morse
The Cincinnati Enquirer

MIDDLETOWN - Amid the upbeat atmosphere of Middfest International on a sunny Sunday afternoon, some festival-goers brushed aside gloomy forecasts about this city's major company, AK Steel Corp.

"It appears there is a lot of hope now, with the new management trying to establish better labor-management relations," said Mary Krauss. An English teacher at Middletown High School, she is concerned that any blow to AK or the local economy would hurt the schools' chances of passing a "desperately needed" levy.

Whatever happens to AK, Krauss is confident that Middletown, a city of about 52,000 people midway between Cincinnati and Dayton, can rebound. "There are great people who live in this community, very dedicated people who love it," she said. "It can have a great future."

Still, Krauss, of West Chester Township, acknowledged, "There is a sense of uneasiness in Middletown because people don't know what is going to happen."

AK, which employs 4,000 here, is facing a series of changes and challenges in a tough economic climate. The company, which had a shakeup in leadership last month, is struggling to restore profitability. It also faces a lawsuit alleging AK's plant in Butler, Pa., is racially hostile; another suit blames the Middletown plant for pollution.

Some Middletonians enjoying the annual cultural celebration at Donham Plaza downtown said they had paid little attention to those events. And Ben Crowley, who has lived in Middletown for 47 of his 50 years, expressed disinterest - and some disdain. "Yeah, if they left it would hurt the town," he said, "but not everyone is in favor of (AK)...they act like they own the town."

Casey Combs, who was pushing her 7-week-old son, Jacob, in a stroller, lives in nearby Trenton. She said the area's economy is very dependent upon AK. Her friends and relatives who work at AK think some job losses are inevitable, "but they're not real worried," she said; they're waiting to see what happens under AK's new leadership.

Lifelong resident Tom Hale, whose father retired from AK, likes what he has seen from acting CEO James L. Wainscott since he replaced Richard Wardrop last month. "(Wainscott) is trying to do the right thing, I'm sure...I'm hopeful that this is going to be something progressive."

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E-mail jmorse@enquirer.com