AK Steel Holding

AK Steel Holding
Public
Traded as NYSE: AKS
Industry Steel
Founded 1899 (1899) (as The American Rolling Mill Company - Armco)
Headquarters West Chester Township, Butler County, Ohio
Area served
 Worldwide
Key people
 Roger K. Newport (CEO), Kirk W. Reich (President and Chief Operating Officer), James L. Wainscott (Chairman).[1]
Products Steel products
Revenue Increase US$6.692 billion (2015)[2]
Decrease US$86.5 million (2015)[2]
Decrease US$-510.7 million (2015)[2]
Total assets Decrease US$4.084 billion (2015)[2]
Total equity Decrease US$-599.7 million (2015)[2]
Number of employees
 8,000 (2015).[2]
Subsidiaries AK Tube, AK Coal
Website www.aksteel.com

AK Steel Holding Corporation is an American steel company headquartered in West Chester, Ohio. In 2015, the company produced and shipped over 7 million tons of steel.[3] The company's name is derived from the initials of Armco, its predecessor company, and Kawasaki Steel Corporation, which contributed several of its production facilities to the company in 1989 in exchange for a large stake in the company. The company executed an initial public offering in 1994.[4]

Current Operations

The company has 7,900 employees and operates 8 steel plants and 2 tube manufacturing plants. The steel plants are in Ashland, Kentucky, Butler, Pennsylvania, Coshocton, Ohio, Dearborn, Michigan, Mansfield, Ohio, Middletown, Ohio, Rockport, Indiana, and Zanesville, Ohio.

Products

AK Steel production facility in Mansfield, Ohio.
An Armco culvert in an irrigation canal.

AK Steel's main products are carbon, stainless and electrical steels, cold rolled and aluminium coated stainless steel for automakers.

One of Armco's best-known products may be the crash barriers installed at roadsides, in central reservations, and around many auto-racing tracks. These barriers are commonly called "Armco" or Armco barriers in the UK.

Another product is bent corrugated steel panels that can be bolted together to make culverts. These are known as "Armco culverts".

For many years Armco was well known for its line of pre-fabricated and pre-primed/pre-painted steel panel buildings, often found in railyards and as outbuildings and storage structures (sheds, Quonset hut, hangars, etc.).

History

The company was founded in 1899 as The American Rolling Mill Company in Middletown, Ohio, where it operated a production facility. In 1901 it opened a second production facility, Ashland Works in Ashland, Kentucky. In 1948 it adopted the ARMCO name and soon thereafter changed its name to Armco Steel Corporation. In the 1950s, the company made several acquisitions. During the late 1970s and 1980s corporate finances and business declined, as with much of the US steel industry, and Armco faced a number of pollution and obsolescence/international competition issues, which resulted in a general decline of workforce size and profitability and closure of a number of older facilities. In 1971, Armco Steel purchased Kansas City-based engineering firm Burns & McDonnell; the engineering company operated as a subsidiary of Armco Steel until 1985, when employees of Burns & McDonnell secured a loan to buy back the company.

In 1978 Armco Steel was renamed Armco, Inc. and it moved its headquarters for a now diversified company to New Jersey in 1985. In 1989 it entered into a limited partnership with Kawasaki Steel Corporation as well as with Itochu Corporation owning 50 percent of its Nova Steel Processing unit. In 1989, Kawasaki Steel Corporation contributed several of its production facilities to the company. While the company achieved over $1 billion in annual sales in the early 1990s, it was not profitable. The company then hired the 65-year old Tom Graham and Richard M. Wardrop, Jr. to improve its finances. These executives divested unprofitable operations and replaced most of the company's executives and managers. In 1993 the company moved its headquarters to Pittsburgh, Pennsylvania and renamed itself AK Steel Holdings reflecting its Armco roots and sizable investment by Kawasaki. The company became publicly traded in 1993. In 1995 it moved its headquarters back to Middletown. The company went public in 1994, using the proceeds to pay down its unmanageable debt load. After a profitable year in 1995, Graham made the controversial decision to spend over $1 billion to construct a new steel production facility in Rockport, Indiana. While the company's sales were starting to increase, in 1996, rifts with its unions and its safety record - 10 fatalities at its plants in 4 years - resulted in fines and scrutiny from the Occupational Safety and Health Administration (OSHA).[5]

In 1999, the company acquired Armco Inc., its former parent company, for $1.3 billion.[6]

In 2007 it moved its headquarters to West Chester Township, Butler County, Ohio.

On July 21, 2014, AK Steel Holding announced that it had agreed to purchase Russia-based steelmaker OAO Severstal's Dearborn, Michigan steel-making assets for $700 million cash. The acquisition would also include a coke-making facility and interests in three joint ventures that process flat-rolled steel products.[7]

Inclusion in the S&P 500 Index (2008-2011)

Following the close of trading on June 30, 2008, AK Steel was added to the S&P 500 and Standard & Poor's 500 Global Industry Classification Standard (GICS) Steel Sub-Industry index. .[8] On December 11, 2011, it was removed from the S&P 500 and replaced with BorgWarner and AK Steel was added to the S&P 600 Index.[9]

Legal record

Environmental record

AK Steel was listed #1 on the Mother Jones Top 20 polluters of 2010; dumping over 12,000 tons of toxic chemicals into Ohio waterways.[10]

The Political Economy Research Institute ranks AK Steel 14th among corporations emitting airborne pollutants in the United States. The ranking is based on the quantity (300 thousand pounds in 2009) and toxicity of the emissions. At the same time, it scored well in terms of environmental justice, affecting smaller percentages of the poor and minorities than their respective percentages of the total population.[11] The United States Environmental Protection Agency (EPA) issued an Emergency Order pursuant to the Safe Drinking Water Act to AK Steel's Butler Works located in Butler, Pennsylvania concerning the nitrate/nitrite compounds being released into the Connoquenessing Creek, an occasional water source for the Borough of Zelienople on June 27, 2000.[12] They had violated the Clean Air Act and the Clean Water Act and that it had failed to properly dispose of hexavalent chromium waste in Butler.[13] In 2004 the EPA and the Justice Department announced that AK Steel Holding settled their alleged environmental violations at their steel mill in Butler, Pennsylvania.[14] AK Steel Holding agreed to a $1.2 million settlement, which consists of a $300,000 penalty and $900,000 in projects intended to reduce smog-producing ozone in Pennsylvania.[14] In 2006, AK Steel reached an estimated $12,000,000 settlement to compensate for PCB contamination in Middletown, Ohio.[15]

Middletown Works lockout

Armco and the Armco Employees Independent Federation (AEIF; an employee labor union) had a collective bargaining agreement in place in 2004 that required AK Steel to employ 3,114 workers, a "minimum base force guarantee". The agreement also authorized AK Steel to suspend the minimum number. On January 13, 2004, AK Steel informed the AEIF that it was suspending the minimum. The union then filed a grievance contesting the suspension. An arbitrator upheld the decision by AK Steel on July 1, 2004, subject to certain limitations, through at least May 10, 2005. The union sought and was granted a new hearing, and on July 1, 2005 the arbitrator issued a comprise total workforce. As part of the agreement the arbitrator allowed AK Steel to set aside financial payments to a fund, in lieu of hiring to the minimum, the amount of which was set by the arbitrator on October 7, 2005. On September 29, 2005, the AEIF filed a lawsuit against AK Steel in the United States District Court for the Southern District of Ohio (AEIF v. AK Steel Corp.; Case No. 1:05-CV-639), in which the AEIF sought to vacate that portion of the July 1, 2005 Award. AK Steel answered the complaint and filed counterclaims (AK Steel Corp. v. AEIF, Case No. 1:05-CV-531) on November 2, 2005.[16][17]

On March 1, 2006, AK Steel began a lockout of around 2700, workers, at their Middletown Works plant, in Middletown, Ohio.[18][19] By the next day, the mill was operated by 1,800 salaried and temporary replacement workers. In late October, AK offered a "final" contract, which was rejected by the union at a vote of 2 to 1.[20] One year after the lockout started, on February 28, 2007, AK Steel reached a labor deal with the labor union,[21][22] The lockout was over when the union members ratified the proposed contract on March 14, 2007.[23][24] This lockout was the longest labor stalemate in the 105-year history of the Middletown Works.[25] The previous longest stalemate was a six-day company lockout in 1986.[26][27] As part of the agreement the AEIF and AK Steel reached a joint settlement of their five total counter lawsuits, with AK Steel paying $7,702,301. A third of the amount was for profit sharing, a third for an assistance fund for employee benefits of employees not recalled to work, and a third an escrow account to settle employee disputes and claims as a result of the lockout. The Employment Security Plan and the Trade and Craft Quota and Service/Support Group Quota (the "minimum base force guarantees") were completely terminated.[17] Prior to the 1984 lockout Armco's Middletown works never lost one minute of production due to a labor issue. <The Rise And Fall of Americas Middle Class by Jim Davis, a former Armco employee>

See also

References

  1. ↑ "James L. Wainscott to Retire as President and CEO of AK Steel Effective January 1, 2016". AK Steel. October 27, 2015.
  2. 1 2 3 4 5 6 "AK Steel Reports Financial Results For Fourth Quarter And Full-Year 2015". AK Steel. January 26, 2016.
  3. ↑ "AK Steel Reports Financial Results For Fourth Quarter And Full-Year 2015". AK Steel. January 26, 2016.
  4. ↑ "Equity Issues This Week". New York Times. March 14, 1994.
  5. ↑ "AK Steel Holding Corporation History". FundingUniverse.com.
  6. ↑ "AK Steel buys former parent". CNN. May 21, 1999.
  7. ↑ "AK Steel To Acquire Severstal Dearborn". AK Steel. July 21, 2014.
  8. ↑ "AK Steel Named To S&P 500". AK Steel. June 30, 2008.
  9. ↑ "S&P Indices Announces Changes to U.S. Indices". PRNewswire. December 8, 2011.
  10. ↑ "America's Top 10 Most-Polluted Waterways". Mother Jones. April 2, 2012.
  11. ↑ Political Economy Research Institute - Toxic 100
  12. ↑ AKS Annual Report (Regulation S-K, item 405) (10-K405) Item 1. Business - AK Steel Holding Corporation
  13. ↑ Environmental Protection Agency
  14. 1 2 "AK Steel Settles Lawsuit Over Environmental Violations at Butler Mill - Steelmaker to Pay $300,0000 Penalty and $900,000 in Pollution Reduction Projects to Settle Hazardous Waste, Air and Water Pollution Violations" - Newsroom - U.S. EPA
  15. ↑ Environmental Protection Agency
  16. ↑ 1Q 2007. - AK Steel Holding Corporation. - May 7, 2007. - (Adobe Acrobat *.PDF document). - | Environmental and Legal Contingencies p.13 | Retrieved: 2008-06-10
  17. 1 2 "Settlement Agreement". - International Association of Machinists and Aerospace Workers. - (Adobe Acrobat *.PDF document). - Retrieved: 2008-06-10
  18. ↑ Gnau, Thomas. - "AK Steel locks out Union". - Cox News Service. - The Middletown Journal. - March 01, 2006. - Retrieved: 2008-06-10
  19. ↑ 1Q 2006. - AK Steel Holding Corporation. - May 4, 2006. - (Adobe Acrobat *.PDF document). - | Environmental and Legal Contingencies p.11 | Results of Operations p.17 | Outlook p.18 | Retrieved: 2008-06-10
  20. ↑ Union: "Workers At AK Steel Reject Contract Offer". - WHIO-TV. - October 19, 2006.
  21. ↑ "AK Steel Reaches Tentative Labor Deal". - Associated Press. - (c.o Topix.net)
  22. ↑ Press Release: "AK Steel and IAM Reach Tentative Contract Agreement For Middletown Works". - AK Steel Holding Corporation. - February 28, 2007. - Retrieved: 2008-06-10
  23. ↑ AK Steel boss projects long-term profitability. - The Middletown Journal. - May 25, 2007
  24. ↑ Press Release: "IAM Members Overwhelmingly Ratify New-Era Labor Accord For AK Steel’s Middletown Works". - AK Steel Holding Corporation. - March 14, 2007. - Retrieved: 2008-06-10
  25. ↑ Gnau, Thomas. - "Day 7 brings no resolution". - Cox News Service. - The Middletown Journal. - March 08, 2006. - Retrieved: 2008-06-10
  26. ↑ Rick McCrabb, Rick. - "Veteran AK workers fear someone's going to get hurt inside plant". - Cox News Service. - The Middletown Journal. - March 02, 2006. - Retrieved: 2008-06-10
  27. ↑ Rick McCrabb, Rick. - "Timeline of the AK Steel lockout". - Cox News Service. - The Middletown Journal. - October 19, 2006. - Retrieved: 2008-06-10

External links

Coordinates: 39°19′38″N 84°26′18″W / 39.32722°N 84.43833°W / 39.32722; -84.43833

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