With demand for steel products at a low, AK Steel is continuing to downsize staff.
According to Scott Rich, president and directing business representative for the International Association of Machinists (IAM) Local Lodge 1943, AK Steel has let go close to 1,000 employees with that number expected to double by the end of 2009.
"This is a global shutdown," Rich said. "It's all over. Every steel company is doing the same thing. More layoffs are coming."
According to U.S. Bureau of Labor statistics, there were 2,227 mass layoff actions involving 237,902 workers in January 2009. In the same report, the manufacturing sector accounted for 38 percent of all mass layoff events and 44 percent of initial claims filed in the same month.
Alan McCoy, vice president for government and public relations, said AK Steel provides hundreds of millions of dollars in economic activity each year.
"We perform best when at full capacity but become more erratic when we operate below that level," McCoy said. "Our response has been to operate our plants in the most effective manner. This means reduced salary for salaried employees and more layoffs. We are leaving no stone unturned in reducing cost."
Middletown Works, one of AK's seven steelmaking and finishing plants, has laid off 107 employees since November 2008, leaving many uncertain about the future of their job, Rich said.
"Workers are not happy that there are layoffs, however it is not because of any business decisions our individual company has made," Rich said. "We're probably the most flexible of the plants ... but this year is going to be a year of trial."
The decision to lay off workers came in fall 2008 during the height of the nation's sharp economic downturn in the fourth quarter. Prior to this, McCoy said AK was well on its way to its best annual financial performance, having been added to the list of "World-Class Steelmakers" by World Steel Dynamics, according to the company's latest financial statement.
Despite numerous layoffs, AK has made no permanent cuts to job positions and maintains that past employees have access to recall rights, which provide them with the opportunity to be re-hired before any new workers are hired, according to McCoy.
"Certainly our hope is that all employees laid off will return to their jobs," McCoy said. "This is a result of the recession that is not of our making but we have to react to it."
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Last week, Middletown Works let go of one employee, and according to Rich, this is a sign things may be improving.
"With there being more layoffs this year, some may come from our plant and some may not," Rich said. "We're 10 percent of what they've laid off so far, so actually the announcement may not affect us."
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