| Item 2.06 | Material Impairments. |
On February 10, 2021, the Board of Directors of TimkenSteel Corporation (the “Company”) approved a plan to indefinitely idle the Company’s Harrison melt and cast assets in Canton, Ohio, late in the first quarter of 2021. Going forward, all of the Company’s melting and casting activities will take place at the Faircrest location, also located in Canton, Ohio. The Company is working collaboratively with employees, suppliers and a number of customers to ensure a well-organized and efficient transition. The Company’s rolling and finishing operations at Harrison will not be impacted by these actions.
At this time, the Company is still reviewing Harrison melt and cast related assets to determine potential alternative uses for selected assets. As a result, the Company estimates that it will recognize non-cash charges of between $8 million and $10 million related to the write down of the associated Harrison melt and cast assets in the first quarter of 2021. The Company does not anticipate incurring any required cash expenditures related to these charges.
There are approximately 100 Canton-based hourly employees, represented by the United Steelworkers, potentially impacted by this decision. Position eliminations will be processed in accordance with the terms and conditions of the 2017 Basic Labor Agreement between TimkenSteel Corporation and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 2003. As such, the ultimate number of employees impacted is unknown at this time.
Estimated annual cash savings from the idling of Harrison’s melt and cast assets are $15 million to $20 million.
FORWARD-LOOKING STATEMENTS
Certain statements in this Current Report on Form 8-K (including statements regarding the Company’s estimates and expectations) that are not historical in nature are “forward-looking” statements within the meaning of the federal securities laws. In particular, the statements regarding the Company’s expectations for the indefinite idling of the Company’s Harrison melt and cast assets, including the amount and timing of charges and estimated savings related to this action, are forward-looking. The Company cautions that actual results may differ materially from those projected or implied in forward-looking statements due to a variety of important factors, including the nature and timing of employee terminations and determinations regarding alternative uses for the idled assets. Additional factors are discussed in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Except as required by the federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On February 10, 2021, Joseph A. Carrabba notified the Company’s Board of Directors of his decision not to stand for re-election as a director at the Company’s 2021 Annual Meeting of Shareholders. Mr. Carrabba further notified the Board that his decision was for personal reasons and not due to any disagreement with the Company. Mr. Carrabba will continue to serve as a member of the Board of Directors until his current term expires at the 2021 Annual Meeting of Shareholders.
