MIDDLETOWN, OHIO AK Steel posts a loss for the third quarter, plans to cut 475 jobs
The job reduction represents 20 percent of its salaried work force.
MIDDLETOWN, Ohio (AP) -- AK Steel Corp. said Friday it lost $277.5 million in the third quarter and will soon eliminate about 475 salaried jobs to try and return to profitability after months of losses.
The loss per share for the quarter ended Sept. 30 was $2.56, compared with a loss of 3 cents per share a year ago.
The current loss included $188.5 million for the write-down of a deferred tax asset and for steel assets acquired by Armco prior to its 1999 merger with AK Steel. Without those expenses, AK Steel's third-quarter loss was $89 million, or 82 cents per share. Industry analysts surveyed by Thomson First Call had forecast a loss of 85 cents per share.
AK Steel's stock was down 3.5 percent, or 8 cents, to $2.22 in Thursday morning trading on the New York Stock Exchange.
Steelmakers have been battling foreign competition and a sluggish market.
Work force reduction
AK Steel said the jobs reduction will start next week and amount to 20 percent of the salaried work force in steel operations. Management expects the reduction to save $35 million annually beginning in 2004. The company said it will take an $11 million charge against fourth-quarter earnings for costs of the reduction.
James L. Wainscott, AK Steel's president and chief executive officer, said the job cuts are unavoidable in the company's effort to become profitable again. The affected employees will receive severance pay based on years of service and help in finding new jobs.
High prices for energy and raw materials, lower production volumes and increased expenses for pension and retiree health care benefits contributed to the latest losses, company officials said.
About the company
AK Steel, based in Middletown, produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as tubular steel products. AK Steel has steel producing and finishing plants 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.