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Steel plant locks out 2,700, keeps operating

Union members wave to supporters as they picket at AK Steel shortly after the company locked out its hourly workers Wednesday after failing to reach an agreement on a new contract.
Union members wave to supporters as they picket at AK Steel shortly after the company locked out its hourly workers Wednesday after failing to reach an agreement on a new contract.David Kohl / AP
/ Source: The Associated Press

AK Steel Holding Corp. — relying on hardball tactics used in other labor standoffs — operated its Middletown Works plant Wednesday with salaried and replacement workers after locking out nearly 2,700 union employees.

Both sides said they want to negotiate a new deal to replace the one that expired at midnight Tuesday, but the company said the union must accept that the independent steelmaker needs to cut labor costs to survive in the increasingly global industry. Union members, picketing outside plant gates, said they’ve already made sacrifices and that the company has been antagonistic by bringing in replacement workers.

“We are operating in a manner that we unfortunately must do, under the circumstances,” AK Steel spokesman Alan McCoy said.

He wouldn’t comment on the replacement workers. He said the plant, located about halfway between Dayton and Cincinnati, has a stockpile of steel to meet customer demands for an unspecified time.

“This is not chest-thumping. This is not done to intimidate,” McCoy said. “It is about serving our customers.”

The union, whose members had recently voted overwhelmingly to authorize a strike, said it had offered to keep working under the old contract.

The union’s president estimates the company has “hundreds” of replacement workers from various sources, but didn’t know details. Brian Daley, president of the Armco Employees Independent Federation, said in an interview that union members are frustrated and skeptical about how well the plant can operate with the new workers.

“It’s a major concern for us because we care a lot about this mill,” he said.

Union workers helped the plant set records for productivity and quality, and take pride in the plant’s operations and its importance to this southwest Ohio city of some 50,000 people, he said.

“Unfortunately, the company decided to do something like this,” Daley said.

The company said its last offer would give raises to most workers, freeze the existing pension plan, force workers to pick up a greater share of health care costs and streamline job classifications so that workers can handle more duties. AK Steel also wants to reduce the work force and says the union’s last proposal would have increased AK Steel’s employment costs by $150 million over the length of the three-year, two-month proposal.

The company said some 80 percent of the union members made between $55,000 and $100,000 in 2005, money that union workers say they earned by working weekends, holidays and double shifts in addition to their regular hours.

“I work 56 hours a week on average,” said Bill Leforce, an 11-year employee. “That’s time away from home; you miss your kids’ ballgames and all that.”

“I don’t feel particularly overpaid,” added Bob Hauser, a 29-year employee.

He said most workers understand the competitive situation, worsened by some companies that went into bankruptcy and shed labor obligations. “It’s rough. They are sweeping changes. It’s a lot to ask at one shot.”

While unions have the right to strike, companies for decades have been allowed to use replacement workers, said Josh Schwarz, a Miami University management professor. Major League Baseball and the National Football League have used replacement players, for example.

He said lockouts and use of replacement workers have become more common since the 1980s. With a lower percentage of American workers now in unions, the stigma of crossing picket lines is not as strong as it once was, he said.

The company went through a heated 39-month standoff with workers at its Mansfield, Ohio, plant. AK Steel’s predecessor, Armco Inc., locked out some 620 hourly workers belonging to the United Steelworkers of America on Sept. 1, 1999. AK Steel acquired Armco and continued to operate the plant with replacement workers. There were numerous clashes and arrests before the lockout ended.

AK Steel says workers at its smaller Ashland, Ky., Rockport, Ind., and Mansfield and Coshocton, Ohio, plants have since accepted what it calls “competitive new-era agreements.”

The company produces steel products for customers in the automotive, appliance, construction and manufacturing markets, with sales totaling $5.65 billion in 2005.