In response to the recent unanticipated and major downturn in the economy, which has resulted in sharply lower demand for some of the company's products, AK Steel (NYSE: AKS) announced today that it is implementing a salaried employee cost reduction program. Among the elements in the program are plans to implement an indefinite 5% pay reduction for salaried employees on January 1, 2009. The pay reduction will affect all salaried employees, including the company's CEO and all executive officers. The company said it plans to implement other salaried workforce cost reductions, including freezing the defined benefit plan for salaried employees and replacing it with a defined contribution retirement benefit, and offering temporary incentives for voluntary retirements. The temporary retirement incentive program will end on February 6, 2009. The company said it could not rule out the need for involuntary salaried job reductions if the pay reduction and voluntary retirements do not produce adequate cost savings. The company outlined the planned measures in a December 1, 2008 letter sent to all salaried employees. AK Steel currently employs about 1,500 salaried employees. The company's salaried employees are located in its West Chester headquarters, Middletown, Ohio research center, field sales offices and in seven steel operations in four states. The company said that about 350 salaried employees are currently eligible for a company-provided retirement benefit. "Unfortunately, this extraordinary global economic downturn requires significant and rapid measures to reduce our costs in light of sharply lower order levels from our customers," said James L. Wainscott, chairman, president and CEO.