WEST CHESTER, Ohio,
Dec. 28, 2010 /PRNewswire-FirstCall/
-- AK Steel (NYSE: AKS) said today that it is permanently closing
its Ashland, Kentucky coke plant
in 2011. The company currently has 263 hourly and salaried
employees at the coke plant, which produces the blast furnace fuel
for the company's iron- and steelmaking facility located separately
in Ashland. The company said
it will do its best to provide jobs for the affected employees at
its Ashland Works or elsewhere in the company. Procedures for
the closure will begin immediately and are expected to be completed
early in the second quarter of 2011.
AK Steel said it would incur a pre-tax charge of approximately
$80 million, most of which will be
reflected in the company's fourth quarter 2010 financial results.
Approximately $50 million of
this charge will be non-cash relating to the write-off of property,
plant and equipment. The remaining amount will result in cash
payments made over several years, of which approximately
$18 million relates to employment
costs and approximately $12 million
relates to closure costs.
The company said that the decision to close the facility was
made because the coke plant is no longer cost competitive due to
increased maintenance and increasingly stringent environmental
regulations. 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.
The company said that, while it is the goal of AK Steel to be
more self-sufficient in steelmaking raw materials, further
operation of the Ashland Coke Plant is not in the best interests of
the company and its shareholders. Further, replacing
Ashland's high cost coke helps
make the balance of AK Steel's Ashland Works, which employs nearly
900 men and women, more competitive. The company has secured
alternate sources of coke to meet the needs of its blast
furnaces.
"AK Steel recognizes that this is a difficult time for the
employees who are affected," said James L.
Wainscott, Chairman, President and CEO of AK Steel. "We are
committed to helping them as much as possible during this
transition, including, where possible, placing them in jobs
available elsewhere at the 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."
About AK Steel
AK Steel produces flat-rolled carbon, stainless and electrical
steels, primarily for automotive, appliance, construction and
electrical power generation and distribution markets. The
company employs about 6,200 men and women in Middletown, Mansfield, Coshocton and Zanesville, Ohio; Butler, Pennsylvania; Ashland, Kentucky; Rockport, Indiana; and its corporate
headquarters in West Chester,
Ohio. Additional information about AK Steel is
available on the company's web site at www.aksteel.com.
AK Tube LLC, a wholly owned subsidiary of AK Steel, employs
about 300 men and women in plants in Walbridge, Ohio and Columbus, Indiana. AK Tube produces
carbon and stainless electric resistance welded (ERW) tubular steel
products for truck, automotive and other markets. Additional
information about AK Tube LLC is available on its web site at
www.aktube.com.
SOURCE AK Steel