AK Steel Holding

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AK Steel Corporation
Public company
Traded asNYSEAKS
S&P 600 component
ISINUS0015471081 Edit this on Wikidata
IndustrySteel
Founded1899; 121 years ago (1899) (as The American Rolling Mill Company - Armco)
HeadquartersWest Chester Township, Butler County, Ohio, United States
Area served
Worldwide
Key people
Roger K. Newport, CEO
Kirk W. Reich, President & Chief Operating Officer
James A. Thomson, Chairman
ProductsCarbon steel
Stainless steel
Electrical steel
Tubular products
Production output
5,596,200 tons
RevenueIncrease $6.818 billion (2018)[1]
Increase $0.384 billion (2018)[2]
Increase $0.186 billion (2018)[3]
Total assetsIncrease $4.515 billion (2018)[4]
Total equityIncrease $0.429 billion (2018)[5]
Number of employees
9,500 [6] (2018)
SubsidiariesAK Tube
AK Coal
Websitewww.aksteel.com
Footnotes / references
[7]
AK Steel production facility in Mansfield, Ohio.
An Armco culvert in an irrigation canal.

AK Steel Holding Corporation is a steelmaking company headquartered in West Chester Township, Butler County, Ohio.

The company's name is derived from the initials of Armco, its predecessor company, and Kawasaki Steel Coporation, which contributed several of its production facilities to the company in 1989 in exchange for a large stake in the company.

The company has been criticized for its record regarding pollution.

Current operations[edit]

The company 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.[7]

Of the company's 2018 sales, 63% was to the automotive industry, 15% was to infrastructure and manufacturing industry, and 22% was to distributors and converters.[7]

AK Steel is a leading producer of flat-rolled carbon, stainless and electrical steel products, primarily for the automotive, infrastructure and manufacturing, including electrical power, and distributors and converters markets. Through its subsidiaries, the company also provides carbon and stainless steel tubing products, die design and tooling, and hot- and cold-stamped components. Headquartered in West Chester, Ohio (Greater Cincinnati), the company has approximately 9,500 employees at manufacturing operations in the United States, Canada and Mexico, and facilities in Western Europe.

In 2019, AK Steel was named GM Supplier of the Year for Non Fabricated Steel by General Motors for the second consecutive year.[8] AK Steel was also presented with a Smart Pillar Award from Ford, as a top-performing global supplier at the 21st annual Ford World Excellence Awards.[9]

History[edit]

The company was founded in 1899 as The American Rolling Mill Company (Armco) in Middletown, Ohio, where it operated a production facility.[10]

In 1922, it opened a second production facility, Ashland Works in Ashland, Kentucky.

In 1971, Armco Steel purchased Kansas City-based engineering firm Burns & McDonnell; however, in 1985, employees of Burns & McDonnell secured a loan to buy the company from Armco.[11] In 1978, Armco Steel was renamed Armco, Inc. It moved its headquarters to New Jersey in 1985.

In 1982, a recession threatened the U.S. steel industry.[12] Several of the nation’s steel companies reported losses for the first half of the year, while other companies, like Armco, were barely breaking even.[13] In 1989, it entered into a limited partnership with Kawasaki Steel Corporation, which contributed several of its production facilities to the company.[14]

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.[15] 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 same year, the company sold the Kansas City Bolt and Nut Company plant to Bain Capital to avoid its shutdown.[16] In March 1994, the company became a public company via an initial public offering,[17] using the proceeds to pay down its unmanageable debt load. In 1995, the company moved its headquarters back to Middletown.[18] In 1996, Graham made the decision to spend $1.1 billion to construct a new steel production facility in Rockport, Indiana.[19] Rifts with its unions and its safety record, including 10 fatalities at its plants in 4 years, resulted in fines and scrutiny from the Occupational Safety and Health Administration (OSHA) ih 1996 as well.[20] In 1999, the company acquired Armco Inc., its former parent company, for $1.3 billion.[21] There was a lock-out at the Mansfield, Ohio plant after a disagreement on a three-year labor contract with 620 USWA employees.[22]

In 2003, the bitter labor dispute in Mansfield ended, the union workers returning to work alongside those who'd replaced them.[23] In 2006, there was another lockout of 2,700 workers in Middletown, Ohio about another contract renewal.[24] In 2007, the company moved its headquarters to West Chester Township, Butler County, Ohio.[25]

In 2014, the company acquired steel-making assets, including a coke-making facility and interests in 3 joint ventures that process flat-rolled steel products in Dearborn, Michigan, from Severstal for $700 million.[26] In August 2017, the company acquired Precision Partners Holding Company for $360 million.[27][28]

Cleveland-Cliffs agreed to acquire AK Steel for $1.1 billion on December 3, 2019.[29]

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

In 2008, the company was added to the S&P 500 Index.[30] In 2011, it was removed from the S&P 500 index and added to the S&P 600 Index.[31]

In popular culture[edit]

The 2016 bestselling book, Hillbilly Elegy, focuses on life in Middletown, Ohio and makes many references to the town's dependence on AK Steel's Middletown Works facility.[32]

Sustainability[edit]

All of AK Steel’s plants are ANSI/ISO 14001:2004 certified to meet internationally recognized environmental management standards.[33]

In 2004, the company settled alleged environmental violations at its steel mill in Butler, Pennsylvania concerning the disposal of hexavalent chromium.[34] In addition to the penalty paid, AK Steel implemented three supplemental environmental projects that exceeded the requirements of federal and state environmental regulations.[34] This included funding a refrigerant recycling program for the residents of Butler County, destroying CFC-based refrigerants in 17 refrigeration units, and retiring 159 tons of nitrogen oxide pollution credits, reducing emissions.[34]

In 2006, AK entered into a Consent Decree with the EPA to cleanup PCBs from Dicks Creek in Middletown, Ohio.[35] The company collected and analyzed soil samples, disposed of soil with high levels of PCBs, and restored the area with clean soil, gravel, and native vegetation.[35]

In 2009, AK Steel’s Coshocton Works plant received the “Wildlife at Work” certification from the Wildlife Habitat Council, a nonprofit dedicated to restoring and enhancing wildlife habitat.[36]

In 2010, the company received Honda’s Green Factory Environmental Achievement Award for its ongoing environmental restoration efforts at its Coshocton plant.[36] Since 2008, the company had restored more than 10 acres at its Coshocton Works into native Ohio prairie land, with plans to expand to more than 20 acres.[36]

In 2014, the Political Economy Research Institute ranked AK Steel 53rd among companies with airborne 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.[37]

In 2015, AK Steel received an award for environmental achievement from Honda North America, Inc.[38] The award was in the Conservation of Natural Resources category and recognized AK for the reduction of water and energy consumption at its Rockport, Indiana, facility.[39]

In 2017, AK Steel was working with the Pennsylvania Department of Environmental Protection (PADEP) to close-out several solid waste management units (SWMUs).[40] The company was monitoring groundwater to ensure it had not been affected by the SWMUs.[41]

In 2018, AK Steel had an air and water compliance rate of over 99.99%. [42]

On June 27, 2019, the TV show “EARTH” featured AK Steel and its recycling efforts.[43] “EARTH” is a National Television Series focused on how the global community can protect Earth and its inhabitants.[43] It is hosted by John Holden, an Emmy award winner and former NBC News Correspondent.[43][44] The episode featured Holden visiting AK Steel’s Research and Innovation Center in Middletown, Ohio, which looks for new ways to recycle steel.[43] The company also recycles around 77% of the water it uses during the steelmaking process, or 160 billion gallons annually.[43]

Legal record[edit]

On June 27, 2000, the United States Environmental Protection Agency (EPA) issued an Emergency Order pursuant to the Safe Drinking Water Act, Clean Air Act and the Clean Water Act to AK Steel's Butler Works in Butler, Pennsylvania concerning the nitrate/nitrite compounds being released into the Connoquenessing Creek, an occasional water source for the Borough of Zelienople, alleging that AK Steel had failed to properly dispose of hexavalent chromium.[45] The issue was settled in 2004, with AK Steel agreeing to pay a total of $1.2 million.[34]

In 2006, AK Steel reached a settlement to compensate for polychlorinated biphenyl (PCB) contamination in Middletown, Ohio. The settlement included cleanup work estimated to cost $12–13 million.[46]

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.[47]

In early 2015, the EPA listed the Ohio River as the most contaminated body of water in the U.S. According to the EPA's Annual Toxics Release Inventory, of the 23 million pounds of chemicals discharged into the river in 2013, more than 70 percent came from AK Steel.[48]

Mansfield lockout[edit]

The strike lasted from 1999-2003 and was extremely contentious, including physical violence between picketing workers and security guards[23]. AK Steel filed a RICO lawsuit against the USWA workers for alleged abusive tactics toward scabs[49]. AK Steel won a $4.3 million judgment in U.S. District Court after a jury ruled the union acted to slow production through sabotage and refusing overtime. When the lock-out finally ended, of the 620 workers, several had died and 110 had retired[23].

Middletown Works lockout[edit]

Armco and the Armco Employees Independent Federation (AEIF; a 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.[50]

On March 1, 2006, AK Steel began a lockout of about 2,700 workers at the Middletown Works plant in Middletown, Ohio.[51] By the next day, the mill was operated by 1,800 salaried and temporary replacement workers.

In late October, AK offered a so-called final contract, which was rejected by the union by a vote of 2 to 1.[52]

One year after the lockout started, on February 28, 2007, AK Steel reached an agreement with the labor union.[53]

The union members ratified the proposed contract on March 14, 2007.[54]

As part of the agreement, the AEIF and AK Steel reached a joint settlement of their 5 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.[50]

Pittsburgh Logistics Systems Lawsuit[edit]

In late 2016, AK Steel notified Pittsburgh Logistics Systems, Inc. (D/b/a PLS Logistics), a company which had been managing all of AK's truck dispatch and rail operations since 1995, that it was being replaced by Ryder as of January 18, 2017.[55] At the time, AK Steel constituted 32% of the PLS' revenue base, according to court filings. PLS battled both Ryder and AK Steel in the United States District Court for the Southern District of Ohio, arguing that Ryder should not be able to use the list of trucking companies that PLS had used while servicing AK. However, U.S. District Court Judge Michael R. Barrett rejected PLS's contention and cleared Ryder and AK to proceed with the use of these carriers.[55]

See also[edit]

References[edit]

  1. ^ "AK Steel Financials". Yahoo Finance. Retrieved 13 September 2019.
  2. ^ "AK Steel Financials". Yahoo Finance. Retrieved 13 September 2019.
  3. ^ "AK Steel Financials". Yahoo Finance. Retrieved 13 September 2019.
  4. ^ "AK Steel Financials". Yahoo Finance. Retrieved 13 September 2019.
  5. ^ "AK Steel Financials". Yahoo Finance. Retrieved 13 September 2019.
  6. ^ "AK Steel". Yahoo Finance. Retrieved 13 September 2019.
  7. ^ a b c "AK Steel Holding Corporation 2017 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  8. ^ "AK Steel Recognized by General Motors as a 2018 Supplier of the Year Winner". AK Steel.
  9. ^ "Ford Honors AK Steel at 21st Annual World Excellence Awards". AK Steel.
  10. ^ "History of AK Steel Holding Corporation – FundingUniverse". www.fundinguniverse.com. Retrieved 2019-09-20.
  11. ^ Eaton, Collin (November 3, 2016). "At Burns & McDonnell, employees feel like owners -- because they are". Times Union.
  12. ^ Chavez, Lydia (1982-06-20). "The Year the Bottom Fell Out for Steel". The New York Times. ISSN 0362-4331. Retrieved 2019-11-26.
  13. ^ Chavez, Lydia (1982-06-20). "The Year the Bottom Fell Out for Steel". The New York Times. ISSN 0362-4331. Retrieved 2019-11-26.
  14. ^ Hicks, Jonathan P. (April 6, 1989). "Talking Deals; Armco's Accord With Kawasaki". The New York Times.
  15. ^ HOLUSHA, JOHN (February 12, 1995). "Profile; Having Done It All in Steel, He's on Top at Last". The New York Times.
  16. ^ BARCLAY JR., JOHN P. (September 22, 2012). "Trade policies destroyed steel industry". News-Press NOW.
  17. ^ "Equity Issues This Week". The New York Times. March 14, 1994.
  18. ^ "AK Steel Holding Corporation History". FundingUniverse.com.
  19. ^ "COMPANY BRIEFS". The New York Times. November 22, 1996.
  20. ^ "AK Steel Holding to Pay Fines Tied to Mill Mishaps". The Wall Street Journal. May 6, 1996.
  21. ^ "AK Steel buys former parent". CNN. May 21, 1999.
  22. ^ "AK Steel ends Mansfield lockout". www.bizjournals.com. Retrieved 2019-09-25.
  23. ^ a b c "AK Steel workers unhappy with return from three-year lockout". Cleveland19. Retrieved 2019-09-25.
  24. ^ "Workers Locked Out By AK Steel". www.cbsnews.com. Retrieved 2019-09-25.
  25. ^ Levingston, Chelsey (November 13, 2010). "Former AK Steel HQ reduced to rubble". PR Newswire.
  26. ^ "AK Steel Completes Acquisition of Severstal Dearborn" (Press release). PR Newswire. September 16, 2014.
  27. ^ "AK Steel Completes Acquisition of Precision Partners Holding Company" (Press release). Globe Newswire. August 7, 2017.
  28. ^ Navera, Tristan (July 3, 2017). "AK Steel to make $360M acquisition". American City Business Journals.
  29. ^ Kilgore, Tomi; Goldstein, Steve (December 3, 2019). "AK Steel's stock rises after $1.1 billion buyout deal with Cleveland-Cliffs". Marketwatch. Retrieved December 3, 2019.
  30. ^ "AK Steel Named To S&P 500" (Press release). PR Newswire. June 30, 2008.
  31. ^ "S&P Indices Announces Changes to U.S. Indices" (Press release). PR Newswire. December 8, 2011.
  32. ^ Ferguson, Mark Lynn (September 12, 2016). "Commentary: For Appalachia's hillbillies, more than an elegy". Chicago Tribune.
  33. ^ "AK Steel receives Honda's Green Factory Environmental Achievement Award". www.reliableplant.com. Retrieved 2019-10-18.
  34. ^ a b c d "AK Steel Settles Lawsuit Over Environmental Violations at Butler Mill - Steelmaker to Pay $300,000 Penalty and $900,000 in Pollution Reduction Projects to Settle Hazardous Waste, Air and Water Pollution Violations". archive.epa.gov. Retrieved 2019-11-01.
  35. ^ a b US EPA, OLEM (2018-08-02). "Success Stories from the PCB Cleanup and Disposal Program". US EPA. Retrieved 2019-11-05.
  36. ^ a b c "AK Steel receives Honda's Green Factory Environmental Achievement Award". www.reliableplant.com. Retrieved 2019-11-12.
  37. ^ "Toxic 100". Political Economy Research Institute.
  38. ^ "AK Steel receives supplier award from Honda North America". Recycling Today. Retrieved 2019-11-21.
  39. ^ "AK Steel receives supplier award from Honda North America". Recycling Today. Retrieved 2019-11-21.
  40. ^ US EPA, OLEM (2015-12-09). "Hazardous Waste Cleanup: AK Steel Corporation (Armco) in Butler, Pennsylvania". US EPA. Retrieved 2019-11-21.
  41. ^ US EPA, OLEM (2015-12-09). "Hazardous Waste Cleanup: AK Steel Corporation (Armco) in Butler, Pennsylvania". US EPA. Retrieved 2019-11-21.
  42. ^ "2018 Sustainability Report" (PDF).
  43. ^ a b c d e "Earth". StarMedia Productions Inc. 2016-08-26. Retrieved 2019-12-06.
  44. ^ "Rockstone Research". www.rockstone-research.com. Retrieved 2019-12-06.
  45. ^ "EPA Orders AK Steel to Reduce Nitrate Discharges, Provide Safe Drinking Water for Zelienople" (Press release). United States Environmental Protection Agency. June 7, 2000.
  46. ^ "Settlement with AK Steel Will Require Cleanup and Investigation of Contamination of Middletown Plant" (Press release). United States Department of Justice. December 2, 2004.
  47. ^ BUTLER, KIERA (April 2, 2012). "America's Top 10 Most-Polluted Waterways". Mother Jones.
  48. ^ "EPA Reports Ohio River Most Contaminated Body Of Water In The Country". Nexstar Media Group. February 28, 2015.
  49. ^ Nelson, Michael (2000-09-25). "More Charges Added RICO Suit Against USWA". National Legal & Policy Center. Retrieved 2019-09-25.
  50. ^ a b "Settlement Agreement" Archived 2008-11-01 at the Library of Congress Web Archives. - International Association of Machinists and Aerospace Workers
  51. ^ VRIES, LLOYD (March 1, 2006). "Workers Locked Out By AK Steel". CBS News. Associated Press.
  52. ^ "AK Steel Union Workers Reject Contract". The Oklahoman. Associated Press. September 26, 2006.
  53. ^ "AK Steel, union reach tentative pact to end lockout". Reuters. March 1, 2007.
  54. ^ "IAM Members Overwhelmingly Ratify New-Era Labor Accord For AK Steel's Middletown Works" (Press release). PR Newswire. March 14, 2007.
  55. ^ a b Boselovic, Len (January 20, 2017). "Pennsylvania Logistics Company Battles Ryder in Court Over Trade Secrets". American Trucking Associations.

External links[edit]

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