An independent arbitrator ruled Wednesday that AK Steel would violate its labor agreement with the United Steelworkers of America (USW) if it closes its plant in Ashland, Kentucky, while continuing to operate other mills.
"If there is customer demand for products which can be produced at Ashland, that work must contractually be assigned to it," said arbitrator Raymond J.Sekula in his ruling, according to the USW.
The company announced in May that it would idle most of its Ashland Works by late July or early August due to the significant business drop caused by the crisis that General Motors and Chrysler have been going through as well as the effects of the international recession. This suspension was expected to last through at least December of this yearand affect about 750 hourly and salaried employees. The plan at that time was to shift all production to AK's Middletown, Ohio works, which, unlike Ashland Works, also has rolling facilities to convert slabs into hot rolled coils in addition to steel production facilities. Slabs produced at Ashland Works must be transported 150 miles to be converted to coils in Middletown.USW Local 1865 President Doug Campbell said the ruling doesn't necessarily prevent the plant closing, yet it reaffirms the union contract.
"Theoretically, if AK disregards the arbitrator's decision and follows through with the shutdown, there is a whole host of liabilities that the company opens itself up to," Tony Montana, spokesman for the USW, said.
AK Steel spokesman Alan McCoy said the company continues to evaluate the decision and will not comment any further at this moment.