U.S. Steel to buy National Steel

Detroit Free Press ^ | 1/9/03 | ASSOCIATED PRESS

[Hermann the Cherusker]

PITTSBURGH -- U.S. Steel Corp., the nation's largest steel maker, said Thursday it will purchase bankrupt National Steel Corp. for about $750 million.

Under the deal, U.S. Steel would also assume about $200 million of its smaller rival's debt.

U.S. Steel could increase production capacity by as much as 40 percent and expects a combined annual cost savings of about $170 million within two years of purchase, company officials said. Savings will come from a reduction in redundant overhead, transportation costs and an improved labor contract, company officials said.

[Willie Green]

very astute, you must be editor of a high school paper. How about entreprenuers buying off steel services and making them more productive.

Instead of mindlessly chanting buzzwords, can you cite an example of such "services" that the market doesn't already provide?

Nucor is an example of smart management in action.

Nucor is also an example of how a highly competitive company can also be damaged by foreign dumping of steel.

[E Rocc]

we'll see, The mini's have been profitable, locating their smaller plants closer to sources of scrap and closer to some industries that need specialty steels. Let the big boy handle the low margin coomodity steels and Nucor will continue to sell to smaller customers that need smaller runs.

The thing is scrap metal is just as much as a commodity and there are players in the market that thrive on instability while producers thrive on stability. A lot of times you have to deal with scrap dealers who demand to be treated like customers, not suppliers. Secondary aluminum suppliers ran into some big problems with the automakers and the Tier I suppliers in the 80s and 90s for these reasons: the buyers didn't like the price instability and the quality people didn't like hearing that "supplier" quality was often uncontrollable.

-Eric

[Willie Green]

The mini's have been profitable, locating their smaller plants closer to sources of scrap and closer to some industries that need specialty steels. Let the big boy handle the low margin coomodity steels and Nucor will continue to sell to smaller customers that need smaller runs.

You got it bass-ackwards. Starting from scratch, the integrated mills have tighter control over specialty alloys. Relying on scrap, the minis generate efficient production of "commodity" alloys through recycling close to their customers.

[TopDog2]

National's Midwest Division is in Porter County and USS Gary Works is in Lake County, but they are pretty close. Midwest was built in 1959 with new lines being built and modernization taking place until a few years ago. It is much more modern and efficient than Gary Works. My feeling is that US will shut down some of it's older lines and use the newer Midwest lines.

National's Great Lakes (Michigan) and Granite City (Illinois) facilities are the ones to worry about.

[ffusco]

Buzzwords?! I responded to your rant that all we need is a bunch of Enrons and Dubya and you tell me not to use buzzwords? Sure services are provided but they're not profitable.

[ffusco]

I never said Nucor would produce specialty alloys just smaller runs. And I know big steel has been a sick old man for decades and mini's are profitable and expanding. So at least I got that right. In fact recycled steel is probably not used for railroad tracks and girders but washer machines and smaller durable goods.

[Centurion2000]

bump

[Eric in the Ozarks]

I have seen coils of washing machine steel from Eastern Europe being unloaded from the holds of gain vessels in Duluth, (it was their back-haul)then loaded on trucks for the trip to Newton, IA., home of Maytag.

[Willie Green]

In fact recycled steel is probably not used for railroad tracks and girders

Nucor Steel- Berkeley's Beam Division

but washer machines and smaller durable goods.

Another strike against Dubya's trade policies: exporting the steel industry's customer base.

[ffusco]

Thank's for the link. They're in better shape than I thought. I forgot about their revolutionary continuous casting method.

[Eric in the Ozarks]

The company I once worked for inherited a dock and grounds across from LTV on the Cuyahoga. With the gentrification of Flats area of the River, the home office wondered why we couldn't have a sail boat marina up river on this property.
I think the property might have been the site of one of North America's first oil refineries...it had more or less continuous seepage.

[Hermann the Cherusker]

Both Bethlehem Steel in Steelton and CFI in Pueblo use scrap to make railway rails.

The integrated's simply make a higher grade of steel from raw iron ore. Plus, there is not enough scrap to go around to turn everything over to recycling.

[Hermann the Cherusker]

Another strike against Dubya's trade policies: exporting the steel industry's customer base.

Don't you mean Clinton? Would NAFTA be pushed today if it had not been done in 1994? I tend to think not.

We do need to stop the industrial hemorrhage to Mexico.

[dfwgator]

"We're bigger than US Steel." - Hyman Roth

[Willie Green]

Would NAFTA be pushed today if it had not been done in 1994? I tend to think not.

The actions of Bush and Zoellick indicate otherwise: U.S. Looks South To Expand Free Trade Area...

[Hermann the Cherusker]

But will this pass?

[Young Rhino]

At the dawn of the 20th century, I'm sure a few buggy manufacturers merged. History repeats itself as the dinosaurs consolidate.

[Willie Green]

But will this pass?

With Libby Dole having replaced Jesse Helms?

[Eric in the Ozarks]

U. S. steel in the export market would be a wonderful thing.

[Eric in the Ozarks]

It would be interesting to see a segmentation matrix of the percentage of scrap in various products like bars, American sheet, etc. Seems to me pellets would provide consistency over scrap.