By: Andy Wendt

Within 48 hours of the news from AK Steel (NYSE: AKS) that it is “temporarily idling its Mansfield operations and most of its Ashland, Kentucky operations” the slowing global economy has hit the Middletown Works.

With a November 11, 2008 press release AK Steel announced its Mansfield Works and Ashland Works would see serious employee cutbacks that are expected to last until January of 2009.

The Mansfield Works, which employs 365 hourly and salaried men and women, primarily produces a flat-rolled stainless steel used for exhaust systems for the automotive industry. With a decline in auto sales and continuing trouble for the US auto industry looming, steel production is being halted in Mansfield and, according to the press release, only a “small number of hourly and salaried employees will continue to maintain the operations in anticipation of resumption of production when warranted by business conditions”.

The Ashland Works and its 1,100 hourly and salaried employees also produce flat-rolled steel for the automotive industry but in addition they produce steel used by appliance makers and other markets. These additional products along with its coke plant make Ashland a little more versatile.  However, like Mansfield, only a small number (275 out of 1,000) of hourly and salaried workers will continue to be needed to maintain a “hot-idle” status at the coke plant in hopes a return to full production will be called for soon.

In Middletown today the headline splashed across the front page of the local paper reads that AK steel will “Idle” workers at the Middletown plant.  While details on the scope of the Middletown cutbacks are sketchy, it looks as if Middletown will not be as hard hit as Mansfield or Ashland.  According to Alan McCoy, AK Spokesman, some employees will have their schedules cut to 32 hours per week and will not be scheduled to work over the Thanksgiving week.

Key to the “good fortune” of the Middletown Works is the hot strip that allows the Middletown plant to produce steel coils. However, the means of production by itself will be of course meaningless should overall demand for AK Steel’s products not increase.

Though the local International Association of Machinist Union, Local Lodge 1943, has yet to release any official news on their website since the AK announcement, their IAM LL 1943 Update from November 5, 2008 does point to lowered expectations of fourth quarter output. Appearing in that November 5 newsletter is the fact that nationwide steel output has dropped to its lowest level in 7 years. This statement along with other comments in the newsletter make it apparent that, at least to the upper levels of the Local Lodge 1943, this downturn, though unwanted, was telegraphed well in advance.

In regards to any economic outlook that might offer any hope to the AK workers Alan McCoy said, “This is truly something we are watching hour by hour and will adjust our operations accordingly.”