From Wikipedia, the free encyclopedia
Jump to: navigation, search
Nucor Corporation
Traded as NYSENUE
S&P 500 Component
Industry Steel & Iron
Founded 1940
Headquarters Charlotte, North Carolina, United States
Key people
Daniel Ralph DiMicco, Executive Chairman
John James Ferriola, CEO, & President
Revenue Decrease US$ 19.4 Billion (FY 2012)[1]
Increase US$ 0.51 Billion (FY 2012)[1]
Number of employees
20,400 (2010)

Nucor Corporation is a Fortune 150 company headquartered in Charlotte, North Carolina, United States. It is the largest steel producer in the United States, and the largest of the "mini-mill" steelmakers (those using electric arc furnaces to melt scrap steel, as opposed to companies operating integrated steel works with blast furnaces). Nucor is North America's largest recycler of any material, recycling one ton of steel every two seconds. The company's total annual steelmaking capacity roughly is 25 million tons.[2] Nucor operates 23 scrap-based steel production mills.[3]


Nucor's history consists of four distinct eras: the Reo Motor Car era, the Nuclear Corporation of America era, the Iverson years (1967–98) and the DiMicco era (2000-2012).[4][5]

The REO Era[edit]

Nucor's origins are with auto manufacturer Ransom E. Olds, who founded Olds Motor Vehicle Company in 1897 (later, as Oldsmobile, to become a part of General Motors). In 1905 Olds left Oldsmobile and established a new company, REO Motor Car Company, in Lansing, Michigan. Though Olds' cars, including the luxurious REO Flying Cloud, were popular, they were not profitable, and the company's more successful truck business (featuring the famous REO Speed Wagon) was not sufficiently profitable to avoid a bankruptcy filing in 1938.

As part of the bankruptcy reorganization, REO exited the car business to concentrate on trucks, and after World War II, attempted to diversify into lawn mowers. The reorganized company continued to underperform, and in December 1954, REO sold off its entire manufacturing operations to Bohn Aluminum and Brass Corporation, suffering a $3 million loss on the sale.

The Nuclear Corporation Era[edit]

After the sale, REO was left with $16 million in cash and no trading businesses. The company initiated liquidation proceedings, but a group of dissident shareholders, noticing the existence of a usable tax loss, successfully challenged the liquidation in a proxy fight in September 1955and, and forced REO to take over a tiny nuclear services company called Nuclear Consultants, Inc. in a reverse takeover. The company was renamed "Nuclear Corporation of America Inc.", and relocated to offices in the Empire State Building in New York City. Nuclear's attempt to recast itself as a nuclear industry services company was unsuccessful, and it followed the example of other companies in the 1950s and 60s and attempted to become a conglomerate, moving its headquarters to Phoenix, Arizona. It purchased - among others - Vulcraft Corporation, a steel joist manufacturer located in Florence, South Carolina. Vulcraft had been founded by Sanborn Chase (no relation to the coffee company), who died at an early age, leaving the company to his widow. Nuclear purchased Vulcraft from Chase's widow in 1962 and hired F. Kenneth Iverson as general manager.

The conglomerate fared no better than its predecessors and in March 1965 filed for bankruptcy. The Board of Directors fired Nuclear's President (and had to return his private jet to him), but could not find a replacement. Eventually Samuel Siegel, an accountant with Nuclear and friend of Iverson, who had been looking to leave the company, informed the Board that he would remain with the company under two conditions: Iverson would become President and he (Siegel) would become Chief Financial Officer, conditions the Board accepted.

The Nucor Era[edit]

Iverson and Siegel reorganized Nuclear around its only profitable business, steel-fabricator Vulcraft, and all other businesses were either sold or liquidated. The company moved its headquarters to Charlotte, North Carolina in 1966, to be closer to its main Vulcraft plant.

Unable to get favorable prices from American steel manufacturers, and unhappy with the imported steel available at the time, Iverson (a metallurgist by training) decided to extend Nuclear vertically into steel making by building its first steel bar mill in Darlington, South Carolina in 1968. The company chose to purchase an electric arc furnace, which was far cheaper than the traditional steel blast furnace, with a US $6,000,000 bank loan from Wachovia. Although once American steel manufacturers learned that Nuclear was operating its own mill, they canceled their contracts),[6] Nuclear finally achieved financial success

In 1972 the company, recognizing that the company was misnamed, adopted its current name. Since that time, Nucor has expanded into other steel products, gained some control of its raw material supply and expanded its market presence. In 1987 Nucor Steel broke ground on a facility in Crawfordsville, Indiana, costing roughly $1 Billion to build. In the 1990s, Nucor bought Birmingham Steel, including the Mississippi Steel plant and Birmingham, Alabama operations.

DiMicco Era[edit]

In September 2000, Daniel Ralph DiMicco, formerly the General Manager of the company's highly profitable Nucor-Yamato Steel joint venture, was appointed as the Chief Executive Officer by Nucor's Board of Directors. Under his leadership, Nucor has acquired compatible existing steel manufacturing facilities with similar operating philosophies. In this period, Nucor made the two biggest acquisitions in its history, one to help control its raw material supply and the other to expand its product line.

In January 2007, Nucor agreed to pay $1.07 billion for Canada’s Harris Steel Co. The deal allowed Nucor to expand its presence in the type of steel used to build bridges, highways and other infrastructure projects.[7]

Prior to 2007, Nucor had a single brand, Nucor Building Systems which consists of four facilities in Indiana, South Carolina, Texas, and Utah.[8] In August 2007, Nucor acquired the four brands of Magnatrax (American Buildings Company, Gulf States Manufacturers, Kirby Building Systems and CBC Steel Buildings) for $280 million to bolster its share in the pre-engineered metal building systems market. As a result Nucor Buildings Group was created.[9]

In February 2008, Nucor agreed to pay $1.4 billion for the David J. Joseph Company (DJJ), one of the country's largest and most well-respected scrap recyclers.[10] The rationale for the acquisition was an acknowledgement of major shifts in the country's recycled ferrous metals resource pool and the DJJ acquisition followed the path started by founder Ken Iverson in the early 1990s with the company's investment in a scrap substitute operation in Trinidad. As scrap price inflation greatly exceeded global transportation cost inflation, scrap markets shifted from regional to national and then from national to global. With global industrialized regions restricting their scrap exports, the US was left in a vulnerable position, and a key part of the rationale of the acquisition was for Nucor to gain greater control over its raw material input. What had originally been a key competitive advantage of the company's in the 1970s/80s - scrap prices in the US were lower than elsewhere - was turning into a competitive disadvantage, and the DJJ acquisition was a key part of the company's response. Despite the company's higher cost for ferrous units than integrated peers in the past decade, the company's overall costs remained lower as evidenced by the company's consistently superior profitability and return metrics.

In May 2008, Nucor announced two joint ventures overseas to capitalize on thriving construction markets outside the U.S. and successfully raised $2 Billion in equity capital, months before the Global Financial Crisis which led to a dramatic fall in the company's stock price to a low of $28/share. This fortuitously-timed equity issuance enabled Nucor to embark in 2010 on an ambitious growth plan.

By mid-2008, Nucor operated 53 facilities throughout the United States and one in Point Lisas, Trinidad. The company also maintained operations through wholly owned subsidiaries, Harris Steel and the David J. Joseph Company (DJJ). Since this time, when the stock reach its peak value (mid-2008), the company has lost one-third to one-half of its market value, and has not recovered as of 2012 [11]

Nucor Today[edit]

Nucor had sales of $19.05 billion in 2013 and employed 22,300 workers. The Company had earnings of $488.0 million in 2013.[12]

Steel products produced include:

  • Bars (carbon and alloy steel)
  • Beams
  • Sheet/Flat Rolled
  • Plate
  • Steel joists
  • Joist girders
  • Steel deck
  • Fabricated concrete reinforcing steel
  • Cold finished steel
  • Steel fasteners
  • Metal building systems
  • Light gauge steel framing
  • Steel grating
  • Expanded metal
  • Wire and wire mesh
  • In addition, through DJJ, Nucor also brokers ferrous and nonferrous metals, pig iron and HRI/DRI; supplies ferro-alloys; and processes ferrous and nonferrous scrap.

Nucor's Divisions[edit]

Nucor consists of many subsidiary businesses that operate independently, some of these companies include:

  • Harris Rebar is a leading fabricator, installer and distributor of concrete reinforcing steel and related products.
  • Harris Supply Solutions is a national distributor of steel and concrete products including Steel Rebar, Black Rebar, Epoxy Coated Rebar, Fabricated Rebar and Steel Remesh. Harris Supply has warehouses across the US to serve their customer base.
  • Skyline Steel is a premier steel foundation supplier serving the U.S., Canada, Mexico, the Caribbean, Central America, and Colombia markets.
  • The David J. Joseph Company is a world leader in scrap metal brokerage, ferrous and nonferrous metal recycling and transportation services.

The Nucor Culture[edit]

Nucor attributes its success to decentralized management philosophy, performance based compensation, egalitarian benefits, customer service and quality, and technological leadership. None of Nucor's plants, whether built from scratch or acquired, are unionized, and Nucor is opposed to unions, believing them to be a destructive force in the US steel industry. No Nucor plant has ever held a successful union certification election, even though Nucor management has not engaged in the controversial "union busting" tactics adopted by some companies, and has never laid off an employee due to a work shortage.

Decentralized Management Philosophy[edit]

Nucor is highly decentralized in its operations, there are only five managerial levels at Nucor (supervisor/professional, department manager, division general manager, executive vice president, and President/CEO). Most operating decisions are made at the division level or lower. In addition, Nucor claims that its corporate office staff numbers around 75 employees, which may be the smallest number of corporate office employees among major corporations.

Performance Based Compensation[edit]

All Nucor employees, from senior officers to hourly employees, are covered under one of four basic compensation plans (in addition to base pay) which reward employees for meeting certain incentive specific goals and targets:

  • Production Incentive Plan: Operating and maintenance employees and supervisors at the facilities are paid weekly bonuses based on the productivity of their work group, which can average from 80 to 150 percent of an employee's base pay.
  • Department Manager Incentive Plan: Department Managers earn annual incentive bonuses based primarily on the percentage of net income to dollars of assets employed for their division. These bonuses can be as much as 80 percent of a department manager's base pay.
  • Professional and Clerical Bonus Plan: This bonus is paid to employees not on the production or department manager plan and is based on the division's net income return on assets.
  • Senior Officers Incentive Plan: Nucor's senior officers do not have employment contracts. They do not participate in any pension or retirement plans. Their base salaries are set lower than those in comparable companies. The remainder of their compensation is based on Nucor's annual overall percentage of net income to stockholder's equity and is paid out in cash and stock.

In addition, Nucor has periodically issued an extraordinary bonus to all employees, except officers, in years of particularly strong company performance. This bonus has been as high as $2000 for each employee.

Egalitarian Benefits[edit]

Nucor's senior officers are not provided traditional "perks" such as company cars, executive parking spaces, or executive dining rooms, though in August 2006, the company did purchase a corporate jet for use by senior management. Several programs (such as Nucor's Profit Sharing, Scholarship Program, employee stock purchase plan, Extraordinary Bonus, and Service Awards Program) are not available to Nucor's officers but only to lower-level employees. Each annual report since 1975 has listed the names of every employee; in the 2007 annual report, it took 12 pages to list the names of all 18,000 employees.

Customer Service and Quality[edit]

Nucor is a member of the U.S. Green Building Council and has participated in other elite environmental programs, such as the Environmental Protection Agency’s National Environmental Performance Track program. Nucor has also sponsored construction of a regional butterfly aviary, launched a waterfowl protection project and helped preserve wetlands. Several divisions have environmental management systems that conform to ISO 14001 standards.

Technological Leadership[edit]

Nucor was among the first steel companies in the United States to use electric arc furnaces to melt recycled steel (primarily from junked automobiles). In 2007, Nucor recycled nearly 10 million cars in its production processes, the equivalent of one SUV every four seconds.

Currently, Nucor (in conjunction with two foreign-owned steel companies) operates a facility in Crawfordsville, Indiana that continuously casts sheet steel directly from molten steel without the need for heavy, expensive, and energy-consuming rollers. The process (known as Castrip[13]), if successful, would allow an entire mill to be built in 1/6 the space of a 'mini-mill' and at 1/10 the cost of a traditional integrated mill. They call this concept a 'micro-mill'.

Also, Nucor has two pilot projects, one in Western Australia and one in Brazil, which are developing low-cost sources of iron for use in its mills.

Environmental record[edit]

In 2000, Nucor settled with the U.S. Justice Department and the United States Environmental Protection Agency to resolve allegations that it had not adequately controlled the emission of toxic chemicals into the air, water, and soil of Alabama, Arkansas, Indiana, Nebraska, South Carolina, Texas, and Utah. The $98 million result was "the largest and most comprehensive environmental settlement ever with a steel manufacturer."[14] The University of Massachusetts Amherst's Political Economy Research Institute in 2002 ranked Nucor as the fourteenth-largest corporate contributor to U.S. air pollution, with a toxic score of 152,421 (pounds released × toxicity × population exposure) due to the release of 760,000 pounds of toxins into the air yearly.[15]

DiMicco has emphasized the need for the company to become a leader in environmental performance. Nucor has added environmental staffing and training and adopted new technology, some of which is patented and licensed to other companies. In a study using data from 2010, the University of Massachusetts reveals that Nucor has dropped to the sixty-ninth-largest corporate contributor to air pollution. The amount of toxins released has dropped to 260,000 pounds, a decrease of more than 65 percent.[16]

Nucor is considered to be the largest steel recycler in the U.S. “We have always been green,” explains Shell. “NBS buildings average over 80 percent recycled content.” Projects fit with the industry trend of implementing green initiatives.[17]

See also[edit]


  1. ^ a b Nucor's annual income statement via Wikinvest
  2. ^ "Nucor Trading". Nucor Trading. Retrieved 2011-12-28. 
  3. ^ 2012 ANNUAL REPORT
  4. ^ Preston, Richard (1992). American Steel. Quill. ISBN 0-380-71822-7.  Construction and startup story of Nucor's first big mill, discusses the history of Nucor.
  5. ^ "History of Nucor". Retrieved 2011-12-28. 
  6. ^ Preston, Richard (June 1992). American Steel. Avon Books. ISBN 978-0380718221. 
  7. ^ "Nucor pounces Harris Steel mergers". 
  8. ^ "Nucor Building Systems". Nucor Building Systems. Retrieved 2011-12-28. 
  9. ^ Nucor Buildings Group
  10. ^
  11. ^ "Google Stock". 2011-10-20. Retrieved 2011-12-28. 
  12. ^ "Nucor 2013 Annual Report"
  13. ^ Castrip
  14. ^ Environmental Protection Agency press release.
  15. ^ "Political Economy Research Institute". Retrieved 2011-12-28. 
  16. ^ "Political Economy Research Institute". Retrieved 2014-05-18. 
  17. ^ "businessreviewusa report". Retrieved 2011-12-28. 

External links[edit]