US: AK Steel lockout enters second week

On March 1, after the expiration of its labor agreement, AK Steel locked out the entire hourly workforce at its Middletown mill—members of the Armco Employees Independent Federation (AEIF)—and brought in management personnel and newly hired replacements to resume production. In a brief meeting March 7—the first talks since the lockout began—management rejected the union’s offer to resume work under the old agreement.

According to reports in the Pittsburgh Post-Gazette, industry giant US Steel has been involved in ongoing talks to acquire AK Steel and has already made a monetary offer. The purchase of AK Steel would create the sixth-largest steel company in the world, strengthen US Steel’s position as a leading supplier to the auto industry and remove AK Steel as a target for acquisition by international competitors.

The global steel industry has seen a wave of mergers and acquisitions over the last several years. After slashing jobs, forcing union workers to accept major concessions and dumping billions of dollars in pension obligations on the government, bankrupt US steel companies—such as LTV, Bethlehem, National and Wheeling-Pittsburgh—have been swept up, particularly as steel prices and profits have risen. While steelworkers and their families have suffered, billionaire investors like New York financier and International Steel Group owner Wilbur Ross and Lakshmi Mittal, the owner of the world’s largest steelmaker, Mittal Steel, have made hundreds of millions from the purchase and sale of steel mills.

In recent years, the Post-Gazette commented on March 3, “AK Steel has been viewed as the next ripe piece of fruit to be plucked. The only drawbacks have been the $3 billion in unfunded retiree benefit obligations on its books and labor agreements that place AK Steel at a competitive disadvantage with US Steel and Mittal’s US operations.”

“For years, that’s been a big impediment to buying AK Steel,” industry analyst Chris Olin told the newspaper.

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http://wsws.org/articles/2006/mar2006/akst-m09.shtml