AK Steel Holding
|Traded as||NYSE: AKS
S&P 600 Component
|Founded||1899(as The American Rolling Mill Company - Armco)|
|Headquarters||West Chester Township, Butler County, Ohio, United States|
|Roger K. Newport (CEO)
Kirk W. Reich (President and Chief Operating Officer)
James L. Wainscott (Chairman).
|Products||flat-rolled carbon steel, stainless steel, electrical steel, and tubular products|
|Revenue||US$5.882 billion (2016)|
|US$230 million (2016)|
|-US$7.8 million (2016)|
|Total assets||US$4.036 billion (2016)|
|Total equity||US$90 million (2016)|
Number of employees
|Subsidiaries||AK Tube, AK Coal|
AK Steel Holding Corporation is a steel producer 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 Corporation, 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 pollution and worker safety record.
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.
Of the company's 2016 sales, 66% was to the automotive industry, 16% was to infrastructure and manufacturing industry, and 18% was to distributors and converters.
Armco's best known products include:
- 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 United Kingdom.
- Bent corrugated steel panels that can be bolted together to make culverts. These are known as "Armco culverts".
- Pre-fabricated and pre-primed/pre-painted steel panel buildings, often found in railyards and as outbuildings and storage structures (sheds, Quonset huts, hangars, etc.).
The company was founded in 1899 as The American Rolling Mill Company (Armco) in Middletown, Ohio, where it operated a production facility.
In 1901, it opened a second production facility, Ashland Works in Ashland, Kentucky.
During the late 1970s and 1980s, corporate finances and business declined, as with much of the US steel industry, and Armco faced several pollution and obsolescence/international competition issues, which resulted in a general decline of workforce size and profitability and closure of several older facilities.
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.
In 1978, Armco Steel was renamed Armco, Inc. It moved its headquarters to New Jersey in 1985.
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 1995, it moved its headquarters back to Middletown.
In 1996, Graham made the controversial decision to spend $1.1 billion to construct a new steel production facility in Rockport, Indiana.
In 1996, 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).
In 1999, the company acquired Armco Inc., its former parent company, for $1.3 billion.
In 2014, AK Steel purchased OAO Severstal's Dearborn, Michigan steel-making assets, including a coke-making facility and interests in 3 joint ventures that process flat-rolled steel products, for $700 million in cash.
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. 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.
In popular culture
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.
The Political Economy Research Institute ranks AK Steel 53rd among corporations emitting airborne pollutants in the United States. The ranking is based on the quantity (343,000 pounds) 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.
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. The issue was settled in 2004, with AK Steel agreeing to pay a total of $1.2 million.
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.
Middletown Works lockout
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.
On March 1, 2006, AK Steel began a lockout of about 2,700 workers at the Middletown Works plant in Middletown, Ohio. 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.
One year after the lockout started, on February 28, 2007, AK Steel reached an agreement with the labor union.
The union members ratified the proposed contract on March 14, 2007.
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.
This lockout was the longest labor stalemate in the 105-year history of the Middletown Works. The previous longest stalemate had been a six-day company lockout in 1986. Prior to that lockout, Armco's Middletown works never lost one minute of production due to a labor issue.
Pittsburgh Logistics Systems Lawsuit
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 PLS was being thrown out and replaced by Ryder Integrated Logistics as of January 18, 2017. 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 Federal Court of the Southern Ohio District, 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. PLS now must deal with the loss of almost one-third of its revenue base.
- AK Steel Holding Corporation 2016 Form 10-K Annual Report
- LYDIA CHAVEZ (June 20, 1982). "THE YEAR THE BOTTOM FELL OUT FOR STEEL". New York Times.
- Collin Eaton (November 3, 2016). "At Burns & McDonnell, employees feel like owners -- because they are". Times Union.
- Jonathan P. Hicks (April 6, 1989). "Talking Deals; Armco's Accord With Kawasaki". New York Times.
- JOHN HOLUSHA (February 12, 1995). "Profile; Having Done It All in Steel, He's on Top at Last". New York Times.
- "Trade policies destroyed steel industry". News Press Now. September 22, 2012.
- "Equity Issues This Week". New York Times. March 14, 1994.
- "AK Steel Holding Corporation History". FundingUniverse.com.
- "COMPANY BRIEFS". New York Times. November 22, 1996.
- "AK Steel Holding to Pay Fines Tied to Mill Mishaps". Wall Street Journal. May 6, 1996.
- "AK Steel buys former parent". CNN. May 21, 1999.
- "AK Steel Completes Corporate Headquarters Move" (Press release). PRNewswire. August 29, 2007.
- "AK Steel Completes Acquisition of Severstal Dearborn" (Press release). PRNewswire. September 16, 2014.
- "AK Steel Named To S&P 500" (Press release). PRNewswire. June 30, 2008.
- "S&P Indices Announces Changes to U.S. Indices" (Press release). PRNewswire. December 8, 2011.
- Mark Lynn Ferguson (September 12, 2016). "Commentary: For Appalachia's hillbillies, more than an elegy". Chicago Tribune.
- "America's Top 10 Most-Polluted Waterways". Mother Jones. April 2, 2012.
- Political Economy Research Institute - Toxic 100
- "EPA Orders AK Steel to Reduce Nitrate Discharges, Provide Safe Drinking Water for Zelienople" (Press release). United States Environmental Protection Agency. June 7, 2000.
- "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" (Press release). United States Environmental Protection Agency. December 2, 2004.
- "Settlement with AK Steel Will Require Cleanup and Investigation of Contamination of Middletown Plant" (Press release). Department of Justice. December 2, 2004.
- "EPA Reports Ohio River Most Contaminated Body Of Water In The Country". TristateHomePage.com. Nexstar Publishing Group. February 28, 2015.
- 1Q 2007 | Environmental and Legal Contingencies p.13
- "Settlement Agreement". - International Association of Machinists and Aerospace Workers
- LLOYD VRIES (March 1, 2006). "Workers Locked Out By AK Steel". Associated Press. CBS News.
- "AK Steel Union Workers Reject Contract". Associated Press. NewsOK. September 26, 2006.
- "AK Steel and IAM Reach Tentative Contract Agreement For Middletown Works" (Press release). AK Steel. February 28, 2007.
- "IAM Members Overwhelmingly Ratify New-Era Labor Accord For AK Steel's Middletown Works" (Press release). PRNewswire. March 14, 2007.