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Nucor Corporation (NYSE: NUE) is one of the largest steel producers in the United States, and the largest of the "mini-mill" operators (those using electric arc furnaces to melt scrap steel, as opposed to companies using traditional blast furnace technology). Nucor claims to be the largest recycler of scrap steel in the United States, recycling over 19 million tons of scrap steel annually. The New York Stock Exchange (NYSE), nicknamed the Big Board, is a New York City-based stock exchange. ... This article summarizes the world steel production by company. ... An electric arc furnace is a system that heats the charged material by means of an electric arc. ... Blast furnace in Sestao, Spain. ...

Nucor Logo
Nucor Logo

Contents

Image File history File links No higher resolution available. ... Image File history File links No higher resolution available. ...

History

Nucor's history consists of three distinct era's: the Reo Motor Car era, the Nuclear Corporation of America era, and the current Nucor era. 1906 REO Runabout in 2005 The REO Motor Car Company was a Lansing, Michigan based company that produced automobiles and trucks from 1905 to 1975. ...


The REO era

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). Olds stayed on with GM until 1905, when he established a new company, REO Motor Car Company, the predecessor to Nucor, in Lansing, Michigan. Though Olds' cars, including the luxurious REO Flying Cloud, were popular, they were not profitable, while the company's more successful truck business (featuring the famous REO Speed Wagon) was not sufficiently profitable to avoid a bankruptcy filing in 1938. Ransom E. Olds Ransom Eli Olds (June 3, 1864–August 26, 1950) was a pioneer of the American automobile industry, for whom both the Oldsmobile and Reo brands were named. ... Oldsmobile was a brand of automobile produced for most of its existence by General Motors. ... General Motors Corporation (NYSE: GM), also known as GM, is an American automobile maker with worldwide operations and brands including Buick, Cadillac, Chevrolet, GMC, Holden, Hummer, Opel, Pontiac, Saturn, Saab and Vauxhall. ... 1906 REO Runabout in 2005 The REO Motor Car Company was a United States-based company that produced automobiles and trucks from 1905 to 1975. ... Location in Ingham County, Michigan1 Coordinates: Country United States State Michigan County Ingham, Eaton Settled 1835 Incorporation 1859 Government  - Type Strong Mayor-Council  - Mayor Virg Bernero (D) Area  - City  35. ... A Reo Speed-Wagon, from 1917 advertisement The REO Speed Wagon was a motor truck manufactured by REO Motor Car Company. ...


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 under perform, and finally in December 1954, REO sold off its entire manufacturing operations to Bohn Aluminum and Brass Company (suffering a $3 million loss on the sale). Combatants Allied powers: China France Great Britain Soviet Union United States and others Axis powers: Germany Italy Japan and others Commanders Chiang Kai-shek Charles de Gaulle Winston Churchill Joseph Stalin Franklin Roosevelt Adolf Hitler Benito Mussolini Hideki Tōjō Casualties Military dead: 17,000,000 Civilian dead: 33,000... A lawn mower (often spelled as one word—lawnmower) is a machine (electric or mechnical) used to cut grass to an even length. ... Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. ...


The Nuclear Corporation Era

After the sale, REO was left with $16 million in cash on hand and no trading businesses. The company initiated liquidation proceedings, with the goal of selling its few remaining assets and distributing the cash to creditors and shareholders.


However, a group of dissident shareholders noticed the tax loss and successfully challenged the liquidation in a proxy fight in September 1955. In what amounted to a "reverse hostile takeover", activist shareholders forced REO to take over a tiny nuclear services company called Nuclear Consultants, Inc. Proxy fight is an event that may occur when opposition develops to a corporation management among its stockholders. ... A reverse takeover (RTO), also known as a back door listing, or a reverse merger, is a financial transaction that results in a privately-held company becoming a publicly-held company without going the traditional route of filing a prospectus and undertaking an initial public offering (IPO). ...


Following the purchase, REO Motor Company emerged as "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 ultimately no more successful than the REO motor vehicle business had been. Nuclear then followed the example of other companies in the 1950's and 60s and attempted to become a conglomerate, once again moving its headquarters, this time to Phoenix, Arizona. The Empire State Building in New York The Empire State Building is a 102-story Art Deco skyscraper in New York, NY. Its name is derived from the nickname for the state of New York. ... New York, NY redirects here. ... A conglomerate is a large company that consists of divisions of often seemingly unrelated businesses. ... Nickname: Location in Maricopa County and the state of Arizona Coordinates: Country United States State Arizona Counties Maricopa Incorporated February 25, 1881 Government  - Type Council-Manager  - Mayor Phil Gordon (D) Area  - City  515. ...


Among the many businesses purchased during Nuclear's attempts at becoming a profitable conglomerate was 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. This article is about a city in the US state of South Carolina. ... Chase & Sanborn Coffee is an American coffee company established in 1878. ... F Kenneth Iverson (September 18, 1925 – April 14, 2002) is credited with transforming Nucor Steel from a nearly bankrupt company in the 1960s into the largest and most successful steelmaker in the United States. ...


However, Nuclear the conglomerate faired no better than Nuclear the nuclear services company or REO the truck manufacturer, and in March 1965 filed for bankruptcy for the second time in 27 years. The Board of Directors fired Nuclear's President (and, in the process, had to return his private jet to him), but for two months could not find a replacement, as nobody wanted to head a corporation that was most likely going to go out of business. Finally, Samuel Siegel, an accountant with Nuclear (and friend of Iverson) who had actively been looking to leave the company, informed the Board of Directors he would remain with the company under two conditions: Iverson would become President and he (Siegel) would become Chief Financial Officer, conditions the Board quickly accepted. Business jet, private jet or, in slang, bizjet is a term describing a jet aircraft, usually of modest size, designed for transporting small groups of business people for commercial reasons at a time convenient to their business needs. ... The Chief Financial Officer (CFO) of a company or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. ...


The Nucor Era

Iverson and Siegel quickly reorganized Nuclear around its only profitable business, Vulcraft. All other Nuclear businesses were either sold or liquidated. The company moved its headquarters yet again, this time to Charlotte, North Carolina in 1966, to be closer to its main Vulcraft plant. For other uses, see Charlotte. ...


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 integrate Nuclear backwards 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, courtesy of a US$5,000,000 bank loan from Wachovia. Although the early days were tough (once the American steel manufacturers learned Nuclear was operating its own mill, they cancelled their contracts), Nuclear was finally able to obtain the financial success that had eluded the company from its beginning. Steelmaking is the second step in producing steel from iron ore. ... Darlington is a city in Darlington County, in northeastern South Carolina. ... An electric arc furnace is a system that heats the charged material by means of an electric arc. ... A loan is a type of debt. ... Wachovia Corporation NYSE: WB, based in Charlotte, North Carolina is one of the largest banking chains in the United States. ...


In 1972 the company (recognizing that there was nothing "nuclear" about making steel or steel products) adopted its current name. Since that time, Nucor has built three more Vulcraft facilities, eight steel mills, and expanded into other steel products, and has maintained its headquarters in the SouthPark area of Charlotte (though it did relocate within the area). A steel mill at the turn of the century in Pittsburgh, Pennsylvania A steel mill (British English and Australian English steelworks) is an industrial plant for the manufacture of steel. ...


Nucor greatly expanded its market presence in the 1990's by absorbing Birmingham Steel, including the successful Mississippi Steel plant and its own Birmingham, Alabama operations. Nickname: Location in Jefferson County in the state of Alabama Coordinates: Country United States State Alabama County Jefferson, Shelby Government  - Mayor Bernard Kincaid (D) Area  - City  151. ...


In September of 2000, Dan DiMicco was appointed as the Chief Executive Officer by Nucor's Board of Directors. Under his leadership, Nucor curtailed its long standing practice of constructing "greenfield" production facilities, citing an overcapacity in the domestic market as the primary reason. Instead, attention was given to acquiring compatible existing steel manufacturing facilities with similar operating philosophies. Nucor has made approximately 6-7 purchases of companies, part interests, and facilities since DiMicco became CEO. A Chief Executive Officer (CEO), or Chief Executive, is the highest-ranking corporate officer, administrator, corporate administrator, executive, or executive officer, in charge of total management of a corporation, company, organization or agency. ... In relation to a company, a director is an officer of the company charged with the conduct and management of its affairs. ... In economics, a market is a mechanism which allows people to trade. ...


Nucor buys Harris Steel

Shareholders in Harris Steel, are being offered C$46.25 a share in a deal announced January 2 2007. The deal will total C$1.25 billion. If successful, Harris Steel will become the largest acquisition in Nucor's history. The deal has the support of the Harris' board of directors, primarily consisting of the Harris family who have tendered enough shares for Nucor to own over 50% of the company. In finance the term A share has two distinct meanings, both relating to securities. ...


Nucor Today

As of December 2006, Nucor operates facilities in 19 states and employs over 11,900 workers. According to Nucor's 2006 Form 10-K, only 70 of its employees work in the company's executive office in Charlotte. A Form 10-K is an annual report required by the U.S. Securities and Exchange Commission (SEC), that gives a comprehensive summary of a public companys performance. ...


Steel products produced include:

  • Bars (carbon and alloy steel)
  • Beams
  • Sheet/Flat Rolled
  • Plate
  • Steel joists
  • Joist girders
  • Steel deck
  • Cold finished steel
  • Steel fasteners
  • Metal building systems
  • Light gauge steel framing

The steel cable of a colliery winding tower. ...

The Nucor Culture

The Nucor Culture can be summarized in five areas: decentralized management philosophy, performance based compensation, egalitarian benefits, customer service and quality, and technological leadership. Underlying these elements is the fact that none of Nucor's plants, whether built from scratch or acquired, are unionized. 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 other companies. This article or section does not adequately cite its references or sources. ... Union busting is a practice, considered by some to be unethical,[1] which is undertaken by an employer to prevent employees from joining a labor union, or to disempower, subvert, or destroy unions that already exist. ...


Decentralized Management Philosophy

Nucor is highly decentralized in its operations; there are only five employee levels at Nucor (supervisor/professional, department manager, division general manager, executive vice president, and president). Most operating decisions are made at the division level or lower. In addition, as stated above only 70 employees work at the Nucor corporate office, which may possibly be the smallest number of corporate office employees among major corporations.


Performance Based Compensation

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. The rate is calculated based on the capabilities of the equipment employed, and no bonus is paid if the equipment is not operating. In general, the Production Incentive bonus 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 that are 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 what executives receive 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 to these established bonus plans, 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 $2,000 for each employee; during 2005 two such extraordinary bonuses were paid (per the 10-K filing). Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. ... The Return on Assets (ROA) percentage shows how profitable a Companys assets are in generating revenue. ...


Egalitarian Benefits

Nucor's senior officers are not provided traditional "perks" such as company cars, executive parking spaces, or executive dining rooms. In fact, 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. As a symbol of Nucor's egalitarian culture, the annual report has the names of every employee printed on the cover (2005 annual report). In August of 2006, the company did purchase a corporate jet for use by senior management. In a letter to all employees from the CEO, Dan DiMicco explained that the frequent rentals of charter jets made a corporate jet purchase a cost-effective measure. Profit sharing, when used as a special term, refers to various incentive plans introduced by businesses that provide direct or indirect payments to employees that depend on companys profitability in addition to employees regular salary and bonuses. ... Senior management is generally a team of individuals at the highest level of organizational management who have the day-to-day responsibilities of managing a corporation. ...


Customer Service and Quality

Many of Nucor's facilities are ISO 9000 certified. Sign on a wholesaler at the Tsukiji fish market indicates ISO 9001 certification. ...


Technological Leadership

Nucor was among the first steel companies in the United States to use electric arc furnaces to melt recycled steel (primarily from junked automobiles). The company's website maintains a running count of the tons of recycled steel used during the current calendar year. An electric arc furnace is a system that heats the charged material by means of an electric arc. ...


Currently, Nucor (in conjunction with two foreign-owned steel companies) operates a facility in Crawfordsville, Indiana that produces sheet steel directly from molten steel without the need for heavy, expensive, and energy-consuming rollers. The process (known as Castrip [1]), if successful, would allow an entire mill to be built in 1/6th the space of a 'mini-mill" and at 1/10th the cost of a traditional integrated mill. A second Castrip plant has been proposed near Blytheville, Arkansas (where Nucor currently operates two facilities). Foreign ownership refers to the complete or majority ownership/control of businesses or resources in a country, by individuals who are not citizens of that country, or by companies whose headquarters are not in that country. ... Crawfordsville is a city in Montgomery County, Indiana, United States. ... Blytheville is a city located in Mississippi County, Arkansas. ...


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. Capital Perth Government Constitutional monarchy Governor Ken Michael Premier Alan Carpenter (ALP) Federal representation  - House seats 15  - Senate seats 12 Gross State Product (2004-05)  - Product ($m)  $100,900 (4th)  - Product per capita  $50,355/person (3rd) Population (December 2006)  - Population  2,050,900 (4th)  - Density  0. ...


References

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.


External links

  • Official Nucor Web Site

  Results from FactBites:
 
Legislative Issues - Nucor Report Release (522 words)
Nucor Steel Seattle, which is Seattle City Light’s largest customer and part of the largest steel producer in the United States, saw their energy rates increase 59 percent as a result of the 2000-2001 West Coast energy crisis.
Nucor’s electric rates at their Seattle mill are the highest of all of their 16 mills across 14 states.
Nucor has also worked with Seattle City Light and the BPA to develop energy conservation projects in their steel mill, and is one of the largest recyclers in Washington State.
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Nucor gained renown in the late 1980s for its radical pay practices, which base the vast majority of most workers' income on their performance.
Nucor is an upstart no more, and the untold story of how it has clung to that core philosophy even as it has grown into the largest steel company in the U.S. is in many ways as compelling as the celebrated tale of its brash youth.
Nucor's unusual pay system is the single most daring element of the company's model and the hardest for outsiders and acquired companies to embrace.
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