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AK Steel says it will cut pay for salaried workers by 5%
Company also will offer voluntary retirement incentives to employees.
- Related: 800 affected locally
Thursday, December 04, 2008
WEST CHESTER TWP. — Officials at AK Steel Corp. announced it will implement a pay reduction and other cuts affecting all salaried workers beginning Jan. 1.
The company said the cost-cutting measures, presented to employees in a letter Monday, Dec. 1, are in response to the economic recession, which has resulted in sharply lower demand for its products.
The 5 percent pay reduction will affect 1,500 of the company's salaried workers, including president, chairman and CEO Jim Wainscott, according to the company.
The local steelmaker also will offer incentives for voluntary retirements for 350 eligible employees through Feb. 6. However, officials said they could not rule out the need for involuntary salaried job reductions if the pay reduction and retirements do not yield enough savings.
The measures will affect local salary workers at AK's West Chester Twp. headquarters, Middletown research center and Middletown Works mill, as well as field sales offices and six other steel operations located in Ohio, Indiana, Kentucky and Pennsylvania.
"Unfortunately, this extraordinary global economic downturn requires significant and rapid measures to reduce our costs in light of sharply lower order levels from our customers," Wainscott said in a statement released Wednesday, Dec. 3.
AK Steel reported a record total revenue of $7 billion last year amid a five-year fight to turn around its operations. This included a yearlong lockout over worker contract disputes at Middletown Works that ended in March 2007. In recent months, the company has struggled with slumping orders, primarily in the automotive and appliance sectors. In May, its stock hit a record $73.07 but sank to $5.20 Nov. 20. It closed at $7.16 Wednesday.
Prior to this announcement, the steelmaker implemented other cost-saving measures, including temporarily laying off about 1,000 hourly workers at its Mansfield, Ashland and Coshocton plants as well as reducing hours of several hundred employees in Middletown.
Calls to AK Steel spokesman Alan McCoy were not returned prior to press time.
