AK Steel, AEIF fail to reach Middletown plant agreement

March 1, 2006

AK Steel Corp. said today that, despite its good faith negotiating efforts, the company and the AEIF, the independent union at its Middletown Works, did not reach agreement on a new contract covering about 2,700 hourly production and maintenance employees before the previous contract expired at midnight on February 28th. The company said that in order to continue fulfilling its commitment to customers, it has implemented a contingency plan and will operate the facility with AK Steel salaried employees and temporary replacement personnel. The company also said that all of its other plants continue to operate normally as scheduled.

According to the company, its last contract proposal included numerous provisions that would preserve and enhance wages and benefits while providing the company and employees with a new-era labor agreement consistent with its competitors and other AK Steel locations.

The company said the AEIF has continued to make contract demands for both a minimum work force size and individual employment security guarantees, despite the fact that no such provisions exist anywhere else in the domestic steel industry. It also said that the union's last contract demand would have increased the employment costs at Middletown Works by approximately $150 million over the 38-month life of the union's proposal. According to the company, both the company and independent analysts have said that the company's total employment costs for Middletown Works today are significantly non-competitive with the industry standards. The expired contract had been in effect since 1999, since which time the company's major competitors have signed competitive new labor agreements that have significantly lowered their total employment costs. The company has also signed competitive new-era agreements since 2003 with unions representing its plants in Rockport, Ind., Mansfield, Ohio, Coshocton, Ohio, and Ashland, Ky.

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