The Cincinnati Enquirer
AK Steel, faced with plunging shareholder value, continuing
losses and labor unrest along with the economic uncertainties
of other steel makers, announced late Thursday the resignation
of its chairman and CEO, and its president.
AK STEEL HOLDING CORP.
Produces various types of steel for the automotive,
appliance, construction and manufacturing markets. |
10,300 (as of 12/30/02). Roughly half the company's
employees are in Middletown. It also has operations in
Mansfield, Coshocton and Zanesville, Ohio; Ashland, Ky.;
and Rockport, Ind.
• Ticker/market: AKS/New
• Thursday's close: $2.56.
52-week high/low: $8.59 (9/18/02)/$2.10 (8/6/03).
• Revenues (2002): $4.29 billion.
Net loss (2002): $502.4 million.
|May 1995 -
Richard Wardrop, who joined AK Steel in 1992 as vice
president of manufacturing and later was promoted to
president, is named chief executive officer. Wardrop,
49, is a former head of U.S. Steel. |
- AK announces extensive safety reforms in the wake of
eight worker fatalities in three years, more than 80
citations from the Occupational Safety and Health
Administration and settlements calling for AK to pay
fines of $1.9 million. AK states its goal of becoming
the industry leader for worker safety.
1997 - Wardrop is named to the additional post of
February 1998 - AK is named the
safest of the nation's eight integrated steel companies
by the American Iron and Steel Institute.
1999 - AK's stock price hits its Wardrop-era peak at
August 1999 - General Motors names AK
its supplier of the year. The automaker is AK's biggest
customer, procuring about 20 percent of its annual steel
needs from AK.
September 1999 - AK locks out
620 union workers at its Mansfield plant, an action
Wardrop attributed to union sabotage, work slowdowns and
January 2000 - AK's stock price
tumbles 25 percent to $12.38 on a dim profit outlook for
the coming year.
August 2000 - Federal and
state environmental agencies file suit against AK,
accusing it of violating air, water and solid waste laws
in Middletown and seeking millions of dollars in fines.
Some of the claims are still pending in court.
September 2000 - AK celebrates it 100th
birthday. The company began as American Rolling Mill Co.
January 2001 - For the sixth year in
a row, AK is the nation's most profitable steel maker,
but prices for hot-rolled steel reach the $200-a-ton
level, down from about $300 in the course of a year. A
competitor, LTV Corp. of Cleveland, files for
bankruptcy, blaming cheap imported steel, a weak U.S.
economy and higher energy prices. Other companies blame
a global glut of steel and the strong value of the
dollar for the industry's woes.
- AK ends its three-year lockout of workers at the
Mansfield plant, ordering an initial recall of 30
January 2003 - AK offers $1 billion
for National Steel Corp. in a federal bankruptcy auction
in Chicago, topping an earlier bid by U.S. Steel. But
U.S. Steel prevails and is named the successful bidder
June 2003 - In a full-page ad in
the Enquirer, AK criticizes Ohio Gov. Bob Taft
for joining a representative of an AK rival to tour an
AK customer's plant in Mexico. A Taft spokesman said the
governor didn't know the Mexican lighting company was an
July 2003 - An AK employee in
Middletown is killed by a falling crane, the first
fatality at the plant in seven years.
- AK's stock price falls to its lowest level of
Wardrop's term as CEO - at one point hitting $2 a share
during trading July 18 - after the company announces a
second-quarter loss of $78.2 million. Wardrop blames low
steel prices, costlier raw materials, higher energy and
maintenance costs, pension obligations, rising
health-care costs and expenses from complying with
September 2003 - The
U.S. Equal Employment Opportunity Commission files suit
against AK, accusing it of fostering a racially hostile
environment for about 20 African-American employees of
its plant in Butler, Pa. AK has no comment on the suit.
Source: Enquirer research
The 103-year-old company, one of Middletown's largest
employers, said Richard M. Wardrop Jr., 58, chairman since
1997 and CEO since 1995, and John G. Hritz, 49, named
president in January, agreed to resign.
Attempts to reach Wardrop, Hritz and other company
officials failed last night.
In a statement, the company said the departures signaled a
change for the company, one of the nation's largest makers of
flat-rolled carbon, stainless and electrical steels and the
largest U.S. supplier of automotive steel.
"The board simply believes that now is the time for a new
perspective to address the company's current challenges," the
The company named James L. Wainscott, 46, chief financial
officer, as its acting CEO.
An executive committee of three independent directors
headed by Robert H. Jenkins, retired chairman and CEO of
Sundstrand Corp., will provide oversight and communication
with executive management.
The other members of the executive committee include
Lawrence A. Leser, former chairman of E.W. Scripps Co., and
Eugene A. Renna, a former Exxon Mobil vice president. A
separate board committee led by Donald V. Fite, retired
chairman and CEO of Caterpillar, will search for a new CEO.
News of Wardrop's resignation came after the stock market
closed. The stock closed Thursday at $2.56 a share, up 1 cent.
AK Steel's stock, which hit a closing high of $28.50 in April
1999, has traded recently at just over $2 a share.
"This needed to happen for AK Steel," Chris Olin, an
analyst with Longbow Research told Reuters News Service "They
were trapped in a shrinking box."
The timing of the move perplexed others.
"I think Wardrop was one of the best operating guys in the
industry," said Charles Bradford, an independent steel analyst
in New York City.
After the company lost out to rival U.S. Steel to buy
Indiana-based National Steel out of bankruptcy reorganization
in April, some analyst said AK Steel could itself be a
The company's ongoing battles with the United Steelworkers
of America, contract disputes with major customers such as
General Motors Corp. and pending racial and environmental
lawsuits have compounded AK Steel's struggles with a shrinking
"Really all its major stakeholders were somewhat
disappointed with the direction AK Steel was going," Olin
Wardrop, a native of McKeesport, Pa., who worked at U.S.
Steel Co. and Washington Steel before coming to AK Steel in
1992 as executive vice president, was also frequently at odds
with those in his industry.
The company withdrew from the American Iron and Steel
Institute, a leading industry trade group, because it
disagreed with the industry position on protective tariffs.
Under Wardrop, AK Steel engaged in a bitter battle with the
company for three years over the lockout of union workers at
the company's Mansfield, Ohio stainless steel plant.
The company also has been at odds with environmentalists,
who backed a multimillion dollar federal air pollution lawsuit
against the company pending in U.S. District Court in
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