AK Steel Holding

AK Steel Holding Corporation was an American steelmaking company headquartered in West Chester Township, Butler County, Ohio. The company, whose name was derived from the initials of Armco, its predecessor company, and Kawasaki Steel Corporation, was acquired by Cleveland-Cliffs in 2020.

"Armco" redirects here. For the steel traffic barrier, see Traffic barrier.
AK Steel Corporation
ISINUS0015471081 
IndustrySteel
Founded1899 (1899) (as The American Rolling Mill Company - Armco)
DefunctMarch 13, 2020 (2020-03-13)
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
Revenue $6.818 billion (2018)[1]
$0.384 billion (2018)[2]
$0.186 billion (2018)[3]
Total assets $4.515 billion (2018)[4]
Total equity $0.429 billion (2018)[5]
Number of employees
9,500[6] (2018)
ParentCleveland-Cliffs Inc.
SubsidiariesAK Tube
AK Coal
Websitewww.aksteel.com
Footnotes / references
[7]
Logo until 2020
AK Steel production facility in Mansfield, Ohio.
An Armco culvert in an irrigation canal.

AK Steel operated eight steel plants and two tube manufacturing plants in Ashland, Kentucky; Butler, Pennsylvania; Coshocton, Ohio; Dearborn, Michigan; Mansfield, Ohio; Middletown, Ohio; Rockport, Indiana; and Zanesville, Ohio. [7] AK Steel produced flat-rolled carbon, stainless and electrical steel products, primarily for the automotive, infrastructure and manufacturing, including electrical power, and distributors and converters markets. The company also provided carbon and stainless steel tubing products, die design and tooling, and hot- and cold-stamped components. 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.

The company has had a mixed record on environmental issues winning awards and accolades for its cleanup efforts, particularly of legacy sites, while also ranking poorly on some water and air pollution reports.

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

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]

On March 13, 2020, the company was acquired by Cleveland-Cliffs.[29][30]

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

In 2008, the company was added to the S&P 500 Index.[31] In 2011, it was removed from the S&P 500 index and added to the S&P 600 Index.[32]

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.[33]

Environment

All of AK Steel’s plants were ANSI/ISO 14001:2004 certified to meet internationally recognized environmental management standards.[34]

In 2004, the company settled alleged environmental violations at its steel mill in Butler, Pennsylvania concerning the disposal of hexavalent chromium.[35] In addition to the penalty paid, AK Steel implemented three supplemental environmental projects that exceeded the requirements of federal and state environmental regulations.[35] 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.[35]

In 2006, AK entered into a Consent Decree with the EPA to cleanup PCBs from Dicks Creek in Middletown, Ohio.[36] 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.[36]

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.[37]

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.[38]

In 2010, the company received Honda’s Green Factory Environmental Achievement Award for its ongoing environmental restoration efforts at its Coshocton plant.[37] 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.[37]

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.[39]

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.[40]

In 2015, AK Steel received an award for environmental achievement from Honda North America, Inc.[41] 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.[42]

In 2017, AK Steel was working with the Pennsylvania Department of Environmental Protection (PADEP) to close-out several solid waste management units (SWMUs).[43] The company was monitoring groundwater to ensure it had not been affected by the SWMUs.[44]

In 2018, AK Steel had an air and water compliance rate of over 99.99%.[45]

On June 27, 2019, the TV show “EARTH” featured AK Steel and its recycling efforts.[46] “EARTH” is a National Television Series focused on how the global community can protect Earth and its inhabitants.[46] It is hosted by John Holden, an Emmy award winner and former NBC News Correspondent.[46][47] The episode featured Holden visiting AK Steel’s Research and Innovation Center in Middletown, Ohio, which looks for new ways to recycle steel.[46] The company also recycles around 77% of the water it uses during the steelmaking process, or 160 billion gallons annually.[46]

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.[48] The issue was settled in 2004, with AK Steel agreeing to pay a total of $1.2 million.[35]

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.[49]

AK Steel was listed first on the Mother Jones Top 20 polluters of 2010; dumping over 12,000 tons of toxic chemicals into Ohio waterways.[50]

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.[51]

Mansfield lockout

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.[52] 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

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.[53]

On March 1, 2006, AK Steel began a lockout of about 2,700 workers at the Middletown Works plant in Middletown, Ohio.[54] 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.[55]

One year after the lockout started, on February 28, 2007, AK Steel reached an agreement with the labor union.[56]

The union members ratified the proposed contract on March 14, 2007.[57]

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.[53]

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 it was being replaced by Ryder as of January 18, 2017.[58] 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.[58]

Further reading
gollark: This is somehow funny and intensely disturbing at the same time.
gollark: We truly live in interesting times™.
gollark: https://www.thirtythreeforty.net/posts/2019/12/my-business-card-runs-linux/
gollark: Meanwhile, Linux (not GNU/Linux in fairness) literally runs on business cards.
gollark: Also also, poor performance.

References
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