Business

Steel mill's idling hurts more than workers

ASHLAND — For decades the blue-hot flames that belch from the blast furnaces at the steel mill here have meant good jobs, prosperity and security for this proud old factory town.

But now the fire might be going out.

AK Steel Corp., which runs the mill, says it plans to lay off more than 670 employees over the next few weeks, gradually idling the plant by sometime in December.

Beyond pure economics, local leaders say, the shutdown will be a psychological blow to the entire community because it involves a facility that has long been the backbone of the local economy.

The company said it hopes to reopen by mid-January, but because of uncertain economic conditions it cannot say for certain how long the mill will be idled. It cited downturns in automobile manufacturing, its major customer, as the reason for the move.

The facilities accompanying the coke plant, where 275 employees work, will not be shut down, but work there will be slowed, said Alan McCoy, a spokesman for AK Steel. How soon the plant will return to normal operations depends on the national economy.

"It's credit and confidence," McCoy said. "And we can't predict that."

The furnace, which smelts iron ore into liquid iron, will be drained of iron and filled with metallurgic coke, and the stoves that heat the furnace will be turned down to 1,600 degrees Fahrenheit, McCoy said. The idling protects the furnace, which cannot easily be shut down.

Mike Hewlett, president of United Steelworkers of America Local 1865, said Wednesday that the layoffs will hit hard. Employees who are laid off will be eligible for unemployment benefits, and more-experienced workers might qualify for supplemental assistance based on years of service.

"But a lot of these younger people have never been through a layoff before," Hewlett said. "It could be very tough for them."

Local government officials said that if the plant is shut down even for a brief period, it will send ripples through a local economy already battered by the loss of manufacturing jobs over the past several years.

"We had Ashland Oil," said acting Mayor Kevin Gunderson. "Their corporate office moved, and we survived that."

The steel mill, which dates to the 1920s, was operated for many years as Ashland Works of Armco Steel Corp. In the early 1970s, AK Steel was the largest employer in Ashland, with 6,000 employees. One of its two blast furnaces has been entirely shut down, and it is now the fourth-largest employer, with 1,100 workers.

Not so long ago, it was almost impossible to walk the streets of Ashland without bumping into many people who either worked at the mill or had relatives who did. Ashland City Manager Steve Corbitt noted Wednesday that his own father worked at the steel mill for more than 40 years.

Today, Ashland's King's Daughters' Medical Center has replaced the mill as the area's largest employer.

Ashland City Attorney Richard "Sonny" Martin said the shutdown is a "devastating" blow to the area.

"You have to look at what has happened to jobs here over the past 20 years," Martin said Wednesday. "Much of Ashland Oil is gone. AK Steel still has a presence, but is much reduced. I think it has affected the psyche of our whole community."

Corbitt said that because the steel mill is the city's largest water customer, utility revenues will drop sharply when it shuts down, he said.

In 2004, the state and the city gave AK Steel a 10-year economic development package worth a maximum of $40 million, said McCoy, the AK Steel spokesman. The incentives allowed the company to purchase a $65 million degasser, a piece of equipment that helped the plant produce higher-quality steel. The plant has won awards for the quality of its steel.

"There are too many suppliers and service industries that rely almost exclusively on AK Steel," said Jim Purgerson, president of the Ashland Alliance, a business group for Ashland and Green up and Boyd counties.

"Those families are going to have some very lean times," Purgerson said.

"The people here, they're very resilient, and, I think for the most part, optimistic."

Hewlett, the local union president, said he hopes the plant will reopen in January as the steel company has said. But he says that remains uncertain.

"You're going to have well over 600 people out on the street, according to what the company has been saying," Hewlett said. "But some employees may choose not to come back, given the uncertainty of the steel industry."

"Your industrial base should be the backbone of the economy. Whether people realize it or not, you can't continue to lose the industrial base, the steel mill and other things like this, that have meant so much for this community."

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