News Summary

MIDDLETOWN — Steel industry experts and observers' analysis of the tentative agreement between AK Steel Corp. and its locked-out hourly union ranges from a victory for the union to a bad deal.

"It doesn't sound to me this was radically different than what the company was offering all along," said Leo Larkin, metals analyst for Standard & Poor's, on the new agreement. "All in all, it seems to me they (AK) get what they wanted."

But Peter Morici, University of Maryland business professor and former chief economist at the U.S. International Trade Commission, said the deal was important to preserve workers' rights and the company's success.

"The contract had to be written in a way that the company has an opportunity to move forward," Morici said. Union members "should weigh the contract in what the prospects would be if it was voted down, not what the prospects would be if it was done by somebody else.

"It beats the heck out of not being a steelmaker at all," he added.

Tom Conway, vice president of the United Steelworkers — the nation's largest industrial union — said he was concerned the deal reached Tuesday would have a negative impact on future labor deals throughout the country.

"Somebody will think the Steelworkers should do something like this down the road, and there will be a fight," he said. "It does have an impact on us."

Among the contract's flaws, Conway said, were wages, pensions, language about contracting out work and health care costs.

AK Steel officials declined to comment on this story.

For the past year, more than 1,700 members of the International Association of Machinists and Aerospace Workers Local Lodge 1943 have been locked out of the Middletown mill. They are scheduled to come together today for a series of informational meetings about the tentative agreement.

If approved, the proposed contract would go into effect March 15 through Sept. 15, 2011. In the interim, rank-and-file members will be voting via mail-in ballots. Results are expected to be announced March 14.

Machinists representatives say only they stand by the deal reached at Middletown Works.

The USW lost the right to represent the former Armco Employees Independent Federation during a representation election last July. But Conway said his opinion isn't sour grapes because "the election is over, and people have moved on."

Labor laws prohibit the USW from courting the Middletown union again until Aug. 4, according to the National Labor Relations Board.

Members of the Middletown union continue to compare their plight to contracts negotiated in Ashland, Ky.; the Ashland deal was offered to Local Lodge 1943 President Brian Daley twice during the lockout, Daley has said.

The contract provided to the USW — who represent about 1,000 production and maintenance employees at Ashland Works — includes a profit-sharing agreement that last year produced checks averaging $1,400 for its members, and a requirement that AK Steel continue to invest in the plant to assure it runs at full capacity for the life of the deal.

"In their hearts, they (Machinists) know where this is," Conway said of the contract's comparison. "It's not at the industry standard."

Machinists officials said they are happy with the proposed agreement and think the lockout has gone on for far too long.

"This isn't 'McHale's Navy' or Mansfield (Works)," said Lynn Tucker, general vice president of the Machinists Eastern Territory. "Conway is entitled to his point of view, and our members at AK Steel know it is time to get serious, to get back to work and to rebuild. Period."

Conway said he was concerned about the local deal because of the influence of Middletown Works, one of the largest integrated steelmills in the country and home of AK Steel's largest work force.

"We're certainly more than curious to see what a major mill like that is doing," he said.

Chris Plummer, managing director of Metal Strategies Inc., a steel industry management consultant, said AK Steel had to change its direction at Middletown Works.

AK Steel "was sort of hanging out there all virtually on its own in terms of the structure of its (old) contract," Plummer said. "No one can go on operating where they are at that much of a disadvantage."