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AK Steel temporarily shutting plants in Ohio, Ky.

Daniel Lovering, Associated Press

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PITTSBURGH (AP) – AK Steel Holding Corp. said Tuesday it was temporarily closing plants in Ohio and Kentucky because of economic turmoil that has sharply lowered demand for its steel products.

The company, based in West Chester, Ohio, said the facilities in Mansfield, Ohio, and Ashland, Ky., will remain idle until early to mid-January. An Ashland plant that produces coke, a steel-making material, will continue to operate at reduced levels.

AK Steel halted steel production and shipping earlier this week at the Mansfield plant, which employs 365 people and makes flat-rolled steel used mainly in automotive exhaust systems. A small number of workers will continue to maintain the plant.

The Ashland plant’s blast furnace, steelmaking, casting and coating operations will be idled later this month. The plant employs 1,100 people, about 275 of whom work at a separate coke plant, which will continue to operate at reduced levels.

A small number of employees also will remain at the Ashland plant, which makes flat-rolled steel used in autos and appliances, to prepare for a restart.

AK Steel said it continues to evaluate all of its operations in light of the downturn, and that it will be prepared to restart the idled facilities sooner than planned if business conditions improve.

“We remain hopeful that we will be able to return our dedicated and hardworking employees to their jobs as swiftly as possible,” James L. Wainscott, AK Steel’s chairman, president and chief executive, said in a statement. “Of course, that depends entirely on credit availability and consumer confidence, which are at the heart of this serious economic downturn.”

Mike Hewlett, president of United Steelworkers of America Local 1865, said union officials were told Tuesday that the company planned layoffs that would affect about 600 workers at the Ashland plant starting Nov. 22. The plant employs about 700 union workers, he said. They do not include workers at Ashland’s coke plant.

“We’ve asked them how long, and they had no answer to that question,” Hewlett said.

A finishing line will continue running at least temporarily to handle existing work, but its future will depend the amount of additional orders, he said.

Alan McCoy, an AK Steel spokesman, said the schedule for the shutdown of the Ashland plant was still being formulated.

The company’s agreement with union workers includes funding that would supplement state unemployment compensation, he said. AK Steel hopes the layoffs will be temporary, McCoy said.

“Can we say that with absolute certainty? No. Because as we’ve said, the depth and the length of this downturn are unknown,” McCoy said. “It is very, very difficult to accurately predict when things might return.”

Last week, AK Steel slashed its projected fourth-quarter steel shipments by about 14 percent, citing weaker-than-expected U.S. and global economic conditions.

The company said it expects shipments to be closer to 1.2 million tons than the 1.4 million tons forecast when the company reported a jump in third-quarter profit last month.

Shares of AK Steel fell 72 cents, or 6.5 percent, to $10.31 on Tuesday.

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AK Steel temporarily shutting plants in Ohio, Ky.