Kentucky Electric Steel will be shuttering its plant in Ashland, Kentucky on March 10, resulting in 113 job cuts. The company cited “current business challenges” as the reason. and said that the closing of the plant is expected to be permanent. Some unionized workers may have bumping rights, which means they could take the jobs of less senior employees.
Tim Gibbs, chief executive officer of Ashland Alliance, said if the closure of Kentucky Electric Steel is related to unfair trade practices, the laid-off employees could receive financial assistance for career re-training.
Kentucky Electric Steel is a leading manufacturer of special bar quality steel bar flats for the cold-drawn bar converter and truck-trailer support beam markets. The company makes more than 2,600 different bar flat items that are used for light and heavy-duty trucks, mini-vans, utility vehicles, cold drawn bar converters, specialty applications for steel service centers, truck trailer manufacturers, and other markets.
Kentucky Electric Steel’s parent company is Optima Specialty Steel, Inc. That company filed for Chapter 11 bankruptcy in December 2016, in an effort to restructure its finances. Optima had $172.0 million in debt due on December 15, 2016, and another $87.5 million of senior unsecured debt due on December 30.
Four wholly-owned subsidiaries, Kentucky Electric Steel, Niagara LaSalle Corporation, Corey Steel Company, and Michigan Seamless Tube, LLC joined Optima in bankruptcy protection.
In November 2017, Optima emerged from bankruptcy and changed its name to Specialty Steel Works Incorporated (SSWI).
Joel Hawthorne, the company’s newly minted CEO, said at the time, “I am honored and excited to have the opportunity to lead SSWI in this next chapter. The SSWI team has emerged from bankruptcy with a new financial structure and is very well positioned to compete in the markets we serve.”
That didn’t include Ashland. The closure of the steel plant there will be a big blow to the small city. Not only will 113 employees and their families lose their incomes, but the city of Ashland will also lose payroll tax revenues. The county is still recovering from the idling of the AK Steel Corporation plant two years ago. Upwards of 620 people lost their jobs there in the week of Christmas 2015.
“KES to shut down permanently,” The Daily Independent, January 9, 2018.
“The History of KES,” Kentucky Electric Steel, last accessed January 11, 2018.
“Optima Specialty Steel Seeks Bankruptcy Protection,” Wall Street Journal, December 15, 2016.
“Optima Specialty Steel, Inc. Completes Financial Restructuring and Emerges from Bankruptcy,” Business Wire, November 16, 2017.
“AK Steel layoffs called ‘devastating’ for Kentucky community,” Dayton Daily News, December 13, 2015.