Workers at AK Steel’s coke plant in Ashland, Ky., leaving at the end of their shift Tuesday. The announcement was made Tuesday that the plant will be closing in 2011.

Archived Story

Ashland coke plant to close

Published 4:50pm Tuesday, December 28, 2010

ASHLAND, Ky. — AK Steel announced Tuesday it plans to close its Ashland, Ky., coke plant permanently in 2011, a decision that will affect its 263 employees.

Procedures for the closure will begin immediately and be completed early in the second quarter of 2011, according to a press release from the company.

Barry Webb, financial secretary for Local Union 523 District 8 of the United Steelworkers of America, said his reaction to the news was “shock and disappointment.”

Webb, of Grayson, Ky., is a 14-year employee with the coke plant. He was at the plant Tuesday when the announcement was made.

“It was something that had been discussed but everyone was hopeful that there could be something worked out to extend the life of the plant,” Webb said.

Webb said the union plans to meet with officials Jan. 6 to discuss employee jobs. As of now the company plans to close April 1. Webb said he still hopes something can be done to save the plant in the meantime.

“It’s a slim chance,” he said. “We have been in contact with state legislators and will continue to stay in touch with them. (AK Steel) is projecting an April 1 closing date and I say we don’t give up until April 1.”

The company said it would attempt to find jobs elsewhere in the company for the workers.

Ray Finley, 54, of South Point, has been a contracted employee at the plant for the past three years. Finley blamed the Obama Administration and the Environmental Protection Agency for the closure.

“It’s sad that the federal government is going to let the American people starve,” while jobs go to China, he said.

The company said increased maintenance and increasingly stringent environmental regulations have made the plant, which produces the black furnace fuel for the company’s iron- and steelmaking facility, not cost competitive.

As a result, the total per-ton cost of coke produced by the plant is significantly higher than all other sources of coke for the company. Replacing the plant’s high-cost coke will help make the balance of AK Steel’s Ashland Works more competitive, it said.

The company has secured alternative sources of coke to meet the needs of its blast furnaces, it said.

Webb said the plant’s closure would negatively affect the area’s economy.

Beside retirements, all of the jobs at the plant have medical benefits and the loss will affect the city’s medical community, Webb said.  Additionally, the plant uses approximately a million gallons of water each year and employees pay $500,000 in payroll taxes each year, Webb said.

Kentucky Gov. Steve Beshear called the company’s decision disappointing.

“We are deeply disappointed by AK Steel’s decision to close their coke plant,” Beshear said in a written statement. “The operation has been a source of more than 200 good-paying jobs and its closure will have a hard-felt impact on those affected.

“In addition to discussions with AK Steel led by the Economic Development Cabinet, I personally spoke with senior leadership of AK to offer Kentucky’s assistance to keep the coke plant open, including economic development tools that could have helped them to re-invest in their operation.

“Ultimately, the company determined that the costs to upgrade the facility were prohibitive and would make it non-competitive,” Beshear said.

Kentucky’s Education and Workplace Development Cabinet’s Rapid Response Team will work with the affected employees, Beshear said.

“While this news is disheartening, we are still appreciative of the steel operations AK maintains in Eastern Kentucky, and we will continue to actively assist AK Steel in sustaining and growing those operations.  In addition, we will aggressively pursue any and all other future opportunities to grow employment in the area.”

The company said it would incur an $80 million pre-tax charge, which will be reflected in the company’s fourth-quarter financial results. About $50 million of the charge will be non-cash relating to the write-off of the property, plant and equipment.  The rest of charge will be cash payments made over several years, of which about $18 million relates to employment costs and approximately $12 million relates to closure costs.

“AK Steel recognizes that this is a difficult time for the employees who are affected,” James L. Wainscott, chairman, president and CEO of the company, said in a statement.

“We are committed to helping them as much as possible during this transition, including, where possible, placing them in jobs available elsewhere in Ashland Works or other operations within the corporation. The Commonwealth of Kentucky has been very supportive of our goal to make Ashland Works more competitive and we appreciate those ongoing efforts.”

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  • http://www.tytandan.com 79Tiger

    mick,

    The unions give millions to Democrats each election cycle. What is keeping the union from paying AK’s fine to save their precious union jobs? What good is a union with no jobs?

    (Report comment)

  • Noesis

    Mick, you can’t say that the unions don’t have a hand in the problems…

    Several weeks ago, a co-worker had a death in the family. I was supposed to work M-F 40 hours that week. I had worked Monday and Tuesday week and Tuesday morning he called and said he couldn’t work the midshift because of the funeral. Since I was the “relief” shift, I had to work it. Due to working hour limitations, they had to give me Wednesday off with pay. Since they didn’t give me adequate notice of shift change, the 12 hour shifts on Thursday, Friday, and Saturday were all time and a half. Sunday was 12 hours of double time. The following week I was supposed to work Monday thru Thursday 12 hours day shift… but again, because of the work hour rules, they paid me to stay home Monday and Tuesday 12 hours each day. Since that week was Christmas, Wednesday and Thursday was double time and a half for 12 hours.

    So, for that two week time period, I actually worked 88 hours and was paid for 182.

    (Report comment)

  • Noesis

    “The reason these people are loosing their jobs, is poor management on the part of AK Steel”

    Oh Mick, you are so full of it!

    This is from the Baltimore Sun newspaper:

    Steel companies across the country are grappling with a slowdown in the industry. Automakers, construction companies and other customers that buy steel from companies such as Sparrows Point have high inventories because of the slow economy and don’t need to restock.

    Steel prices also have declined, meaning steel companies are making less profit from customers who are still buying the steel. At the same time, the cost of raw materials needed to make steel has risen, making it costlier for steel companies to operate.

    “Obviously a plant would not shut down even temporarily if the situation was not serious,” said Christopher Plummer, managing director of Metal Strategies Inc., a Pennsylvania consulting firm.

    Sparrows Point is at a further disadvantage because it buys all of its raw materials instead of producing them.

    Take iron ore pellets, which are placed in the blast furnace with coke to make purified iron and then steel.

    It costs $50 to produce a ton of the pellets, whereas it costs $155 to buy a ton of the pellets, Plummer said. The price of the pellets has risen as much as 130 percent in recent months, and could reach $200 per ton in the third quarter, according to Metal Strategies.

    “These are, by far, the biggest-cost items for a plant like that,” Plummer said. “For them to go up by that magnitude in price can be costly.”

    (Report comment)

  • mickakers

    79Tiger; The reason these people are loosing their jobs, is poor management on the part of AK Steel, not the Federal, Local or State officials nor the EPA. Every Man, Woman and Child should get down on their hands and knees every day and thank God for the EPA. The EPA saves lives and helps protect the health of all Americans. They also contribute to the protection of the Environment and curtail Big Business from running roughshod over us all.

    (Report comment)

    • http://www.tytandan.com 79Tiger

      I will thank the EPA to get the heck out of the way. Just another alphabet agency that everyone else knows is a joke but since they are “government” they take themselves so seriously.

      (Report comment)

  • mickakers

    Noesis; I feel the primary reason many Steel mills closed, was poor management. Lack of foresight (modernizing and keeping up with the times). The reason? GREED! The highly overpaid executives and many stock holders preferred to maintain their exaggerated lifestyles at the expense of their business by putting the EXCESSIVE PROFIT in their pockets rather than reinvesting into the mills.

    (Report comment)

    • Noesis

      Mick do you have ANY proof of this or just letting your twisted views getting into the way of your critical thinking?

      (Report comment)

  • mickakers

    Noesis; You are an excellent SELECTIVE writer. Fox News would hire you in a minute. However, you have a very narrow minded point of view, you have a tendency to glean from articles and (so called) news sources only what you want. A good in depth read of the article you mentioned from “Investors Business Daily” would bring you to the conclusion, that, it is full of half truths. Did Will Durst write this?

    (Report comment)

  • Noesis

    Hey Mick, instead of blaming excessive profit, how about looking in the mirror:

    From Investors Business Daily

    Why jobs leave

    …The fact is, companies sitting on cash aren’t doing nothing. They’re hiring overseas, creating 1.4 million jobs in 2010 alone, according to the Competitive Enterprise Institute.

    That’s not because they prefer foreigners to Americans, but because the bad business climate here pushes them to do so.

    The rest of the world is a vastly different place from Obama’s U.S., which is characterized by high taxes and protectionist set-asides for politically connected unions that shut out free trade.

    In places like Indonesia, Singapore, Taiwan, India and Thailand, nobody demonizes business or blasts trade. Instead great efforts are made by the state and the private sector to draw in foreign investment by becoming more competitive than their rivals.

    U.S. multinationals go to these places not because labor is cheap but because these policies also create boomtowns with lots of customers. Incredibly enough, sometimes overseas profits and jobs provide a lifeline for troubled U.S. companies back home. Take GM — today, its Brazil and Korea operations help keep it afloat…

    Google and read the entire article…

    (Report comment)

  • Noesis

    Jeez Mick “excessive profit” is your answer to everything isn’t it?

    Haven’t steel mills around country gone under because they couldn’t make ANY profit?

    (Report comment)

  • lrc

    I feel so bad for those losing their jobs at a time like this. I have been out of work several times, and it is never easy. I am surprised the plant has survived this long to be honest. My father retired from there when it was Armco steel, and it has been struggling ever since. Just another example of out of date technology left to rot by local leaders,instead of updating and bringing in viable businesses with a future.

    (Report comment)

  • http://www.tytandan.com 79Tiger

    mick

    You explain to those that are about to lose their jobs that they are losing it for their own health thanks to the EPA. Yes, their friendly EPA. The government agency that destroys lives and businesses and sits under their non-elected protective bureaucratic umbrella, untouched by voters or their woes.

    (Report comment)

  • Cashmere

    “The company has secured alternative sources of coke to meet the needs of its blast furnaces, it said.”

    It would be interesting to learn where those alternative sources of coke are located.

    (Report comment)

  • mickakers

    I wonder! Perhaps a little more in depth inquiry would be beneficial. Thank God for the EPA and the benefit they provide for all Americans. Thank you, President Richard M. Nixon for promoting the EPA. I feel AK Steel is the culprit here. What is the real reason? Excessive profit, maybe? Worth looking into.

    (Report comment)

  • wakeupamerica

    When are local and state leaders going to start bringing in new jobs to the area?

    (Report comment)

  • http://www.tytandan.com 79Tiger

    When are the states going to collectively stand up to the EPA and say no more? The EPA is nothing but a bloated, tyrannical, executive branch of the federal government that produces nothing of value to the american people. Thank you Richard Nixon.

    (Report comment)

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