Friday, October 17, 2003

AK Steel will keep Wainscott

After 29 days, interim CEO wins job

By James McNair
The Cincinnati Enquirer

James Wainscott's 29-day tryout as AK Steel Holding Corp.'s chief executive was a successful one.

The Middletown steel maker elevated Wainscott from acting CEO and gave him a permanent promotion to president, CEO and board member Thursday. The 46-year-old executive had been named interim CEO Sept. 18, when the company dumped Richard Wardrop.

"Our board has the utmost confidence in Jim's ability, leadership and commitment in steering AK Steel through the challenges the company faces," said AK chairman Robert Jenkins. "Jim has ... done a remarkable job since he assumed the role of CEO."

Jenkins himself was promoted to his post Thursday - the first time in company history it gave the chairman's gavel to someone other than one of its executives.

Jenkins, who has been on the AK board since 1996, is the retired chairman and president of Sundstrand Corp. It was acquired and now is part of Hamilton Sundstrand, a United Technologies Corp. subsidiary.

Wainscott, an AK officer since 1995 and its chief financial officer since 1998, has been a whirlwind of activity since taking charge. He has demonstrated a knack for diplomacy by calling and meeting with state officials, union leaders and environmentalists. He has even agreed to meet with the owners of soot-covered homes in the shadow of its blast furnace and coke plant in the Oneida neighborhood of Middletown.

"He called Gov. Taft," said Orest Holubec, the governor's spokesman said Thursday. "They had a very good conversation about the future of AK Steel. Mr. Taft told him he would work with him to resolve any issues."

There are issues indeed. The Ohio Environmental Protection Agency took AK Steel to court over alleged violations of state pollution laws, and AK faces the installation of $80 million in pollution controls to meet new federal requirements. AK also needs to spend $100 million on blast furnace improvements and is seeking concessions from its labor unions.

Repeating what might have been considered purely a chess play two years ago, AK insists it needs relief from its financial obligations to keep producing raw steel in Middletown.

Otherwise, it says, it will have to shut down the so-called "hot end" of its operation, which could eliminate about 1,000 jobs.

"I am convinced that together we have the opportunity, the ability and the will to put AK Steel on solid footing," Wainscott said in a statement issued after business hours.

At the least, Wainscott has halted the steep drop of AK's stock price. The stock hit an all-time low of $1.74 Sept. 26. It closed unchanged at $2.39 a share Thursday, or an improvement of 37 percent.


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