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Posted on Thu, Oct. 09, 2003
Under new management, AK Steel takes more conciliatory tack

Associated Press

After years of clashing with labor unions and battling with environmentalists and regulators, AK Steel Corp. is taking a more conciliatory approach since its management shake-up last month.

At the urging of the company's board of directors, interim chief executive officer James Wainscott has begun a new era since his Sept. 18 promotion. He met with an environmentalist to open lines of communication and huddled with United Steelworkers union officials before they jointly announced an agreement to try to work out disputes lingering from a bitter, 39-month worker lockout that ended last year at AK Steel's Mansfield plant.

The change has been noticed by union workers, industry analysts and business leaders in this southwest Ohio city where the company is based and is the dominant employer.

"I think the new management is working hard to create partnerships on all fronts. We definitely want to have a partnership," said Rachael Belz of Ohio Citizen Action.

Belz's group is part of an environmental coalition that teamed with some Middletown residents in recent years to accuse AK Steel of contaminating a creek and showering neighbors' homes with dust from the Middletown Works mill. Belz met with Wainscott at AK Steel's headquarters on Oct. 2. She wouldn't say what was discussed, but said there was a mutual agreement to keep talking.

Belz said the company rebuffed requests for such meetings with the coalition under chief executive Richard Wardrop Jr., who resigned Sept. 18 along with former president John Hritz under an agreement with AK Steel's board.

Wainscott declined through a spokesman to be interviewed Thursday. Wardrop, who had been CEO since 1995 and came under increased pressure in recent months as the company's stock price fell, did not return telephone messages left at his home and has not spoken publicly since his departure.

Company spokesman Alan McCoy said Wainscott has been asked to take a new look at all issues.

"The board said it's time for a fresh perspective," McCoy said. "Without speaking specifically to any case, he's taking a fresh perspective on all challenges we face."

Wainscott, 46, an eight-year AK Steel veteran who previously worked for National Steel Corp., clearly has new instructions from his board, industry analyst Brian Rayle said.

"He's definitely made a lot of progress in terms of working with the unions," said Rayle, of FTN Midwest Research in Cleveland. "The fact that the board kicked Wardrop out indicates they didn't like the direction he was going in."

The federal and state governments sued AK Steel in June 2000, accusing the company of years of pollution violations at the Middletown Works. AK Steel has contested the lawsuit, which still awaits trial.

McCoy declined to say whether AK Steel will revise its approach to the lawsuit under the new management.

AK Steel's board said it is looking for a permanent successor to Wardrop and hasn't said whether Wainscott is a candidate or how long he will serve as interim CEO.

Ed Shelley, president of the Middletown Works employees' union, the Armco Employees Independent Federation, often has clashed with AK Steel's management. He said he met with Wainscott at the new CEO's invitation the week after his promotion.

Shelley termed it an introductory meeting and said he hopes to arrange a meeting later this month with Wainscott and the union's executive committee.

"My first impression is that he appears to be wanting to work with the union," said Shelley, a 34-year Middletown Works employee. "I don't know what that's going to mean in the long-term."

This week, AK Steel announced that it is renewing its membership in the regional Mid-Miami Valley Chamber of Commerce. The company had left in April after the chamber invited as a luncheon speaker a Cincinnati lawyer, Stanley Chesley, who had previously sued AK Steel.

Company leaders never publicly explained the decision to leave the chamber, beyond saying that the organization wasn't meeting the company's needs. Within two weeks, the chamber's president resigned.

This week, Wainscott said in a prepared statement that AK Steel is rejoining to offer its support because it believes the chamber has refocused its mission.

Scott Stacey, general manager of the Manchester Inn and Conference Center in Middletown where AK Steel frequently sponsors meetings and houses its business guests, said he has heard only positive responses to Wainscott's first few weeks as top executive.

"The approach they're taking has been well received," Stacey said.

AK Steel has about 10,000 employees in plants and offices in Middletown, Coshocton, Mansfield, Walbridge and Zanesville, Ohio; Ashland, Ky.; Rockport and Columbus, Ind.; and Butler, Pa. The company also operates an industrial park on the Houston shipping channel in Texas and owns Douglas Dynamics, which makes snowplows and salt spreaders for medium-size trucks.


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