Nucor Corporation 1995: after 30 years of success, what next?

The Nucor story is about how a nearly bankrupt enterprise became the most productive and
profitable company in the U.S. steel industry. It is also a story of how the two top managers of
Nucor Corporation set a standard of personal and corporate behavior that continues to inspire
social and economic civility within and beyond U.S. borders.
The change in fortunes for the company began in the summer of 1!"# when the new Chairman
of the $oard# %onald &illis# asked the financial manager Sam Siegel to stay on rather than 'uit.
Siegel responded with two conditions( appoint )en Iverson president and himself# Sam Siegel#
treasurer and secretary. The $oard agreed# and the new top management team of Iverson and
Siegel came into being. They believed that customers ought to receive good value and
productive employees ought to be rewarded# and they saw to it that this happened. $y 1*+# ,ust
nine years from almost certain bankruptcy# the two top managers sensed the company would
become -unstoppable.. /owever# it would be another 01 years before Nucor was recogni2ed as
a -great. company with ama2ing returns 3Collins 01114. 5or e6ample# between 1!" and 1"
Nucor returned 7 times more on invested capital than 8eneral 9lectric under -super manager.
:ack ;elch 3<ppendi6 1# p.0* summari2es Nucor=s financial position in 1!" and 1"4.
<ccording to Samuel Siegel# the greatest difference between 1!" and 1" was not in the
financial figures but# rather# in the recommendation for top manager. In 1!"# Sam Siegel had no
doubt about his recommendation to %onald &illis# Chairman of the $oard# that )en Iverson be
appointed top manager. Sadly# in 1" he had no such confidence about the person who most
likely would be recommended as )en Iverson=s successor. <s a member of the $oard# Siegel
was obligated to offer his opinion. ;hat would he say>

? This case study on the Nucor Corporation was written with the valuable assistance of Samuel Siegel# retired
vice@chairman# chief financial officer# treasurer and secretary# Nucor Corporation for purposes of research#
theory development and classroom discussion. It was written by $ryan Aoulin# associate professor in strategy
and ethical leadership# 5aculty of $usiness <dministration# &akehead University# Bntario# Canada. Thanks go
to people interviewed# and who reviewed earlier versions# namely( :ames C. Coblin# vice@president of human
resources# Nucor CorporationD Ted )elly# retired lead man# %arlington# South Carolina rolling mill shop# Nucor
Corporation# and his wife# <lice )elly# homemakerD $etsy &iberman# secretary@receptionist# Nucor CorporationD
and Samuel Siegel# retired vice@chairman and chief financial officer# Nucor Corporation. 5inally thanks go to
Eobert ;illis for his early review and suggestions# to <rlene Smith and &auree Aoulin for the many days spent
drafting and redrafting the manuscript# and to students at &akehead University who first tested this Nucor case
3latest revision September 011F# 0114. Copyright held by author
1
Background
The story of Nucor can be traced to 1F1 when Eansom 9. Blds was awarded a patent for his
steam engine. In 1F7 Blds was first to e6port a U.S. made automobile# his steam@powered
Bldsmobile# to a &ondon firm. In 11+ the company he founded# Blds Cotors ;orks# had
become the largest automobile manufacturer in the U.S. This was the same year that E. 9. Blds
sold his shares in Blds Cotor ;orks and he began manufacturing cars with the Eeo 3from his
initials4 Cotor Car Company. The Bldsmobile brand was later sold to 8eneral Cotors in 11F.
E.9. Blds filed for bankruptcy in 17F# near the end of the 8reat %epression# and the Eeo Cotor
Car Company was reorgani2ed under Eeo Cotors to manufacture light trucks named -Eeo
Speedwagons.. %emand for light trucks was driven by U.S defense contracts# first during ;orld
;ar II and again during the )orean ;ar. %emand fell when the )orean ;ar ended in 1"7. In
1"+ Eeo Cotors was sold to %iamond Trucks and truck manufacturing carried on under the
-%iamond Eeo. brand. < new company# Eeo /oldings# was formed to hold the proceeds of the
sale and distribute these proceeds to the shareholders of Eeo Cotors.
Nuclear Corporation of <merica# later renamed Nucor# came into being with the 1"" merger of
what remained of Eeo /oldings G before all proceeds had been distributed G and a company
called Nuclear Consultants. Nuclear Consultants had been -H vaguely formed to capitali2e on
the possibilities of nuclear power. 3Eodengen# 1*# p. 1!4. The merged Nuclear Corporation of
<merica drifted along until the $oard chose %ave Thomas# a flashy and articulate manager of
'uestionable standards# to head the company in 1!1. Thomas traveled about the country in style
in his own private plane that he leased to the company. /e soon arranged a move of the
company head'uarters from the small office in New :ersey to spacious offices in Ahoeni6#
<ri2ona. Thomas then set about directing the 71@year old certified public accountant Sam
Siegel# hired in 1!1# to ac'uire businesses in rapid succession# following the -growth by
ac'uisition. folly of the 1!1s. /owever# only one ac'uisition proved worthwhile and that was
Iulcraft# a South Carolina company that manufactured steel ,oists# the assemblies that support
the floors and roofs of industrial and commercial buildings. Thomas knew nothing about ,oists
but# fortunately# Nuclear Corporation hired )en Iverson.
0
)en Iverson was the engineer who conducted the feasibility study on the Iulcraft steel ,oist plant
and who recommended its purchase in 1!0. )en Iverson then was hired to manage the ,oist
plant. <t Iulcraft# Iverson found a company that cared for employees# with an incentive plan to
encourage productivity. This was in direct contrast with his e6perience# especially with large
companies. 5or e6ample# Iverson had been disgusted early in his career by the e6ploitive
attitudes of top managers of the large# integrated steel mills# or -$ig Steel. toward customers and
employees. /e was similarly disgusted by how the bosses of large# militant steel unions often
protected the least productive# least fle6ible and least creative workers. Iverson was determined
to do things differently# and this was his chance.
Iverson 'uickly learned about the manufacture of steel ,oists and# importantly# brought along a
keen interest in good management practice. 5or e6ample# he was struck by Aeter %rucker=s
31"+4 notion that a minimum number of organi2ational levels should separate top managers
from the people who do most of the work G front line employees 3Iverson# 1F4. So when
Iverson moved from New :ersey to South Carolina# he saw to it that workers continued to have
good reason to work hard and work smart# without the need for unions and bloated numbers of
supervisors. /e did this by continuing the incentives already in place and by setting clear goals#
stating# -;e must perfect not only production but every department at Iulcraft. 3Iulcraft News#
1!04. /e also demonstrated his conviction about fairness by knocking out walls separating
black and white workers= toilets# a progressive initiative in South Carolina in the 1!1s. Iverson
soon gained a reputation as an effective manager.
In 1!+# Nuclear Corporation was comprised of seven businesses# each with a different product
or service( the Iulcraft steel ,oist business# a nuclear measuring e'uipment business# a rare earth
chemicals business# an electronics business# a sheet metal business# an electrostatic copiers
business# and a leasing business. The Iulcraft steel ,oist business# managed by )en Iverson#
made an impressive J0* thousand in profits in 1!+ while the other si6 businesses# together#
lost JF!+ thousand# leaving a net profit of only J!7 thousand. ;orse# these si6 businesses were
pro,ected to make huge combined losses in 1!"# and the company would soon be bankrupt.
7
Shortly after that# )en Iverson and Sam Siegel accidentally bumped into each other in the
Ahoeni6# <ri2ona post office. Iverson and Siegel were both carrying a stack of ,ob applications.
Things at Nuclear Corporation had become that desperate. Siegel 3011+c4 would later recall#
-;e looked at each other# and had a good laugh..
Sam Siegel offered his resignation in 1!"# ,ust before the company was rescued from
bankruptcy by investor %onald &illis# who purchased 00 percent of the common stock from
Cartin Carietta Corporation for a mere J*0#111. Cartin Carietta did not want to be associated
with a bankrupt company and wanted out. <s an interesting aside# the $oard of %irectors
continued to go along with the inept Thomas# right up to the time of %onald &illis= appointment
as the new Chair of the $oard. &illis personally loaned the company J0"1#111. < J7.F" million
dollar line of credit was also arranged. The &illis@controlled $oard then made Sam Siegel an
offer to stay on with the company.
Siegel=s reply came in the form of his famous Ahoeni6 to New Kork telegram# sent on 71 :uly
1!". In it# Siegel stated that he would only agree to stay on# -if 314 )en Iverson is given an
employment contract as Aresident of Nuclear# and 304 I am given an employment contract as
treasurer and controller of Nuclear..
Bn 10 <ugust 1!"# the $oard agreed to Siegel=s demands# and )en Iverson was appointed
president and Sam Siegel was elected treasurer# secretary# and vice@president# finance. Together
the two men formed a complementary top management team# one that transformed the hodge@
podge that was Nuclear Corporation of <merica into Nucor Corporation# a company of
e6traordinary achievements. 3See <ppendi6 0# p. 0* for highlights from 1!" to 1".4
he !ise of Nucor in the "tee# $ndustry
Immediately after taking the reins in 1!"# Iverson and Siegel began selling facilities that would
not fit with the company in the future. In 1!!# they moved head'uarters from the over@spacious
Ahoeni6 offices to a modest# rented office in Charlotte# North Carolina to be close to the Iulcraft
steel ,oist plant in South Carolina. The company would build its future from this small head
office in North Carolina and the Iulcraft ,oist plant in South Carolina.
+
The first priority in 1!" was to increase the number of steel ,oist plants# which was done over
the ne6t several years. In 1!* Iverson and Siegel also began planning the construction of an
electric@arc mini@mill# to supply the steel rods# angles and bars that were used to make the
Iulcraft steel ,oists. Cini@mills had at least five advantages not en,oyed by the integrated mills
of $ig Steel and these are summari2ed in the following 5igure 1.
%igure 1: %i&e 'd&antages of (ini)*i##s o&er $ntegrated "tee# (i##s 3source( various4
1. < mini@mill uses a three@step instead of the si6@step process of an integrated steel
mill. In mini@mills# scrap metal is simply melted in an electric@arc furnace#
castings or billets are formed and these billets are rolled to the final shapes of
steel rods# angles and channels.
0. Cini@mills cost less to construct on a ton of steel produced basis# and are able to
operate efficiently at 11L of the si2e of integrated mills 3so@called because the
integrated mills went all the way from raw iron@ore to finished steel products4.
7. Technological upgrades and plant refurbishing are much easier with the small
mini@mills# as compared to the huge integrated steel mills.
+. Cany locations near local markets potentially allow the mini@mills to serve
customers better and keep employees productive and satisfied.
". 5inally# mini@mill steel plants# once perfected# are profitable enough to allow
construction of additional facilities with internal rather than debt financing.
<s with the ,oist plants# Nucor=s mini@mill facilities would be constructed and operated at low
cost# using incentives for employees.
Nucor deliberately chose to locate facilities in non@urban centers among states that had ta6
structures favorable to business and that would allow Nucor to remain non@union 3Siegel#
011+b4. The locations attracted the hard@working# goal@oriented people who Nucor sought out.
The demanding nature of the work meant turnover was usually high in the early stages# dropping
to near 2ero after the first year as employees made a commitment to dig in for the long haul.
"
$y 1" Nucor operated eight business divisions# all in the steel industry# with each division
making the range of steel products indicated in the listing shown in the following 5igure 0.
%igure +: Nucor ,i&isions and -roducts in 1995 3source( The Nucor Story4
1. Nucor "tee# 3Aroducts( Steel sheet# bars# angles# structural beams# plate@carbon and alloy steels4
+. Nucor Co#d %inish 3Aroducts( Cold finished steel products for shafting and precision machining4
3. Nucor /rinding Ba##s 3Aroducts( Steel grinding balls# used by mining industry to process ores4
0. Nucor %astener 3Aroducts( Steel cap@screws# structural and finished bolts# nuts M locknuts4
5. Nucor Bui#ding "yste*s 3Aroducts( Cetal buildings and metal building components4
1. 2u#craft 3Aroducts( Steel ,oists# ,oist girders and steel deck for building construction parts4
3. Nucor)4a*ato "tee# Co. 3Aroducts( ;ide flange steel beams# pilings and heavy structural steel4
5. Nucor Bearing -roducts, $nc. 3Aroducts( Cachined and forged steel bearing components4
Nucor=s F divisions operated from 0" facilities in F states# including its head office in Charlotte#
North Carolina. 3See <ppendi6 7# p. 0F for the location of each of these 0" facilities.4
Nucor6s -eop#e)focused -hi#osophy, -rincip#es and Cu#ture
Nucor e6pressed its philosophy in easy to understand# strategic terms. It was simply -to build
facilities economically and operate them effectively. 3Nucor Story# Iverson 1F4. /owever this
philosophy went beyond simply a written statement to become part to the culture by -principles.
in action. Bne such principle# reciprocal fairness# was reflected in the -gain@sharing. plan where
e6tra@ordinary profits were shared with employees and managers# when times were good and in
the no@lay@off -pain@sharing. plan# during downturns such with the 1F1 and 1F0 recession.
Siegel 3011"4 e6plained how pain@sharing and gain@sharing worked(
Nucor=s business was primarily geared to the construction and capital goods
areas of the economy. These areas are very cyclical. %uring the declining times#
there was often insufficient work for a full "@day week for hourly employees.
This resulted in less pay# and more pain 3for employees4. Nucor=s management
decided that officers 3including top managers4 should also share in this pain by
having their base pay reduced# to set a company@wide e6ample. Bf course# in
good times all employees shared in the gain# including officers.
!
Nucor also looked out for its customers in the same fair way that it looked out for its employees.
5or e6ample# all customers# regardless of the si2e of their orders# received the same pricing and
the same prompt deliveries# made in ,ust the 'uantities that customers needed. This reduced
customers= inventory costs and built loyalty# contrasting sharply with $ig Steel that stuck to its
policies of differential pricing and order 'uantity infle6ibility.
Nucor=s philosophy of reciprocal fairness also led to the development of its inclusive culture.
%ecisions were made with the intention of being as -e'uitable# right and practical. as possible
3Iverson 1F# p.1*04. Customers benefited by dealing with Nucor people who were rewarded
for coming up with better solutions for them. 5or e6ample# Nucor=s policy of one unit price for
all customers# regardless of the si2e of order# re'uired more invoices and# thus# higher
administrative costs. Nucor people responded to the challenge and computeri2ed the process#
reducing the cost of each transaction# and so it became practical as well as e'uitable and Nright=
to treat small and large customers alike.
Eewards at Nucor were based upon merit and discrimination was discouraged. 5or e6ample#
merit@based remuneration plans were developed for managers and employees and the most
productive employees could out@earn supervisors. Bf course# supervisors and managers
normally earned more than other workers# as a reward for their e6tra responsibility. 5airness also
meant that all managers traveled economy class# parking spaces were on a first come basis for
managers and employeesD and hard hats were the same color for everyone e6cept for those in
maintenance crews who had to be identified promptly. <lso everyone had an opportunity to earn
higher pay and career advancement# supported as this was by Nucor=s simple structure.
Nucor6s "tructure and /uiding -rincip#es
The minimalist structure of Nucor was consistent with top management=s philosophy of fair
play and %rucker=s 31"+4 advice on keeping to a minimum number of layers. This was
advice that so struck Iverson and accorded with Siegel=s thinking on keeping things fair#
simple and understandable. The result was that there were only four management layers
between hourly employees and president# as indicated in the following 5igure 7.
*
%igure 3: "tructure at Nucor 3source( The Nucor StoryD see also <ppendi6 +#
p. 0 for a more conventional representation of Nucor=s structure4
ChairmanOIice ChairmanOAresident
Iice AresidentO8eneral Canager
%epartment Canager
SupervisorOArofessional
/ourly 9mployee
The head office in Charlotte# North Carolina was intentionally kept small with only 00 people
in 1". %ivisions only reported critical information such as weekly sales# production and
backlog to Charlotte head'uarters. %ay@to@day operating decisions were made at each
facility# without reporting to head'uarters# sub,ect to regular financial reporting. The simple
structure and reporting kept lines of communication open# and these were consistent with the
four clear principles of employee@employer relations outlined in the following 5igure +.
%igure 0: -rincip#es of 7*p#oyer)7*p#oyee !e#ations at Nucor 3source( the Nucor Story4
1. Canagement is obligated to manage Nucor in such a way that employees will have
the opportunity to earn according to their productivity.
0. 9mployees should feel confident that if they do their ,obs properly# they would have a
,ob tomorrow.
7. 9mployees have the right to be treated fairly and must believe that they will.
+. 9mployees must have avenue of appeal when they believe they are being treated
unfairly.
9mployees at each facility were encouraged to submit ideas for improvements to the general
manager who operated the facility as an independent business. If any employee felt unfairly
treated# he or she could appeal through the simple hierarchy# all the way to general manager
of a division. If not satisfied# the top managers at head'uarters were available for appeal.
F
:ob satisfaction surveys were conducted every 7 years to see where improvements might be
made. The application of these basic principles# together with the simple structure and
feedback reporting system# came to be known as -egalitarian meritocracy..
(anage*ent at Nucor
Canagers were usually appointed from the ranks within Nucor# although there were a few
e6ceptions. Bne e6ception was with :ames C. 3-:im.4 Coblin# first hired as Nucor=s
personnel manager# later promoted to Iice@president# /uman Eesources.
:im Coblin was a graduate of ;ake 5orest University# with a law degree from the University
of )entucky. /e had first worked in a union workplace for ! years at 8eneral 9lectric 3894
in labor relations 3e.g.# contract negotiations# dispute arbitration# grievance resolution4. <fter
that# he worked 11 years at Ingersoll Eand# the air compressor manufacturer# " of these 11
years in non@union assignments as /uman Eesource Canager of North Carolina area plants
before ,oining Nucor in 1F!. 9ven with all his training and 1! years of industry e6perience#
Coblin was unprepared for how things were done at Nucor as he e6plained(
I thought I had decent training# and it was a bit of a shock to come to Nucor. Cy
colleagues at 89 were all top@notch professionalsD the same at Ingersoll Eand. $oth
used the same terminology# the same policies. The two companies actually shared the
same corporate office in Canhattan for many years# before 89 moved to 5airfield.
Ingersoll Eand was a little 89. /owever# what I found at Nucor was issues handled
1F1 degrees differently than at 89 and Ingersoll Eand 3Coblin# 011+4.

:im Coblin knew that the 89 method G driving employees hard G workedD he had witnessed
this at 89 and IE for 1! years prior to ,oining Nucor. ;hen he ,oined Nucor in 1F!# he
found that Nucor=s method also worked# and even better. This came about when %ave
<ycock# who two years earlier had been appointed Aresident and Chief Bperating Bfficer#
asked him to visit each Nucor facility. Coblin recalled arriving at each Nucor facility and
meeting the manager who would introduce him to the -very best Nucor supervisor. in the
plant. 9ach supervisor would conduct Coblin on a three@hour tour# followed by lunch with
the supervisor and plant manager.

This is the way Coblin 3011+4 e6plained how surprised he was at what he found in his Nucor
plant tours(
;hoever gave us the tour# what I started hearing was language that I never# ever
heard of in my years at 89 or Ingersoll Eand. It was so contrasting that I
started to keep a little notebook. I still have that little notebook filled with
sayings. The very first one was# -Slow down.# followed by# -Take it easy# now
let=s take a break# remember you can=t get it all done in a day# be safe# be
careful# what do you need> /ow is it doing> Is it too hot in here>. They were
slow@down# cautioning@type things.
;hereas in 89=s <ppliance Alant Aark in &ouisville )entucky G where 00#111
people worked in ! divisions on 7 shifts G 0!#111 ma,or appliances were made
each day 3laundry washers and dryers# cooking ranges# refrigerators# free2ers#
air@conditioners4# it was# -&et=s get busy# come on# you can do a little more#
break=s overD who can work overtime> It=s not that hot in here# come on fellows
you don=t need a break.# that sort of thing H push# push# push# push.
Coblin added# -Nucor had figured out something here. Non@union# in a heavily unioni2ed
industry# it had among the highest paid steel workers in the U.S. and on planet 9arth# among
the lowest labor costs per ton of steel produced# and people are told not to work so hard.
That=s a fairly uni'ue combination to have..
Bne of the stories that Coblin told to illustrate employee relations at Nucor was about an
employee who was no longer pulling his weight in a work group# and who went absent.
Instead of complaining# his employee group put in e6tra effort to keep productivity at the
same level. This was because the employee had been a productive part of the group for
seven years# and his personal problems# with his divorce# resonated with his teammates.
;hen called to task by their supervisor# his workmates still supported him# and reminded the
supervisor that the employee had already lost his bonuses. %espite ob,ections of his team#
the supervisor gave the employee a warning that remained in effect for one year. The final
outcome was that# with the support of his team# the employee was soon able to become the
productive employee that he had been for the seven previous years.
11
Coblin=s ne6t story illustrates how things worked out differently for -5reddy.# one of the few
unmotivated# non@goal@oriented employees who found themselves at Nucor.
8n*oti&ated %reddy and Nucor6s !esponse 3source( Coblin 011+4
< group of employees came to a supervisor to say# -Kou have to fire 5reddy 3not
his real name4 because he is not pulling his weight and he has almost had a
serious accident and he almost hurt us..
The superior replied# -5reddy has only been here a month and I am not going to
consider firing him# since no one performs well after only a month.. The group
came back at the end of the second month with the same complaint# and added#
-H what=s worse# in the last 0 weeks 5reddy=s been gone to a national guard
summer camp# and you did not give us a replacement and we had to fill in for
him ourselves# and we made higher bonus without him. Now he=s back# he=s
slowing us down again.. The supervisor again said# -5reddy=s only been here
for 0 months. I=m not going to consider getting rid of him# since he has been
gone for 0 weeks of the second month# and he hasn=t had time to train properly..
<t the end of the third month# the employees came back with the same
complaint and the supervisor said# -&et us review it.. <t the end of 1 days
from the initial complaint# the supervisor terminated the employee. The crew
was then overheard in the break room talking among themselves# saying#
-%ang old Nucor managementD they drag their feet# and finally have done now
what we told them to do 7 months ago. Now they better get us someone who
can really work with us# someone who really wants to workP.
:im Coblin had this to say about the story( -This fits e6actly into my Ntheory of opposites=
because# had that e6act same thing happened at either Ingersoll Eand or 89# the employees
would have gone to the fired employee and said# NCean old management were tough in firing
you. ;e will help you and file a complaint and# hopefully# get management to bring you
back to work.= They would have been on the employee=s side.. The Nucor incentive system
encouraged self@correcting teams. :im Coblin advised( -The temptation is for managers and
supervisors to try to ad,udicate every little single issue. Canagement needs to let this
informal ,ustice system operate..
Aerhaps Coblin=s most dramatic story on the effectiveness of incentives came about with his
own situation# in 1F!# when he was hired as Aersonnel Canager and charged with visiting
the Nucor plants for the first time by the then Aresident and Chief Bperating manager# %ave
11
<ycock. The story of his meeting with Nucor manager Tom 8arrison is reproduced in first
person# to capture the moment Coblin discovered# for himself# how things worked at Nucor#
and how different this was from his many years of e6perience with two other ma,or
companies.
Newco*er Co9#in *eets Nucor (anager /arrison 3source( Coblin 011+4
<fter the plant tour# I asked Tom 8arrison# the plant manager the usual 'uestions#
starting with# -;hat are the biggest issues or concerns with running your
department> ;hat stresses you> ;hat work@issues keep you up at night>.
8arrison responded# -Nothing# I don=t have any concerns or issues.. I was
unsatisfied. -Eeally# you are the production manager# you have 0 shifts and a
small# third shift on maintenance# and you are currently working ! days a week
with over 011 guys out here in your organi2ationD you=ve got to have some
issues.. 8arrison replied# -Not really# this place is automatic. ;e=ve been sitting
here for half an hour# small talking. /ave you heard my phone ring> /as anyone
knocked on my door> These guys are workingD these guys know e6actly what to
do.. I was still not satisfied. -Aick one thing. Kou have to have somethingP.
8arrison said# -B.).# I=ll tell you. This has come up recently and we are about to
nip it in the bud. The second shift ends at midnight and everybody goes home.
;hat happens is that there are a couple of groups of employees that go out and
stay in the parking lot at midnight. <fter everybody leaves# they=ll sneak back in
and they keep working. They are off the clock and not getting paid. ;hat they
are doing is building up their parts pool# and this makes their bonus higher. I have
told their supervisors that this fowls up our bonus calculations. Now the
supervisors and I pretend to be leaving and# when these guys try to come back# we
run them off..
<t the time of the plant visit in 1F!# :im Coblin commented to Tom 8arrison# -It=s a serious
problem# but it is almost humorous G employees sneaking back in to work for free.. /e
added# -That is a high class problem that would never# ever# happen at 89.. Coblin was not
alone in being pleasantly surprised by what he found at Nucor.
In 1!# at age 7# Ted )elly left the well@known %i6ie cup company# to become part of the
original crew that constructed Nucor=s very first mini@mill in %arlington# South Carolina#
home of the %arlington racetrack. )elly had this to say about leaving %i6ie for Nucor(
10
%i6ie was a good company and I only left because I thought I would prefer not
to be on rotating shift work. I was hired by manager :ohn %oherty to help build
and then repair the Swedish -,ump mill. 3so@called because the platform raised
or lowered# as steel passed from one level to another to take its shape4. ;hen I
got to Nucor# I worked !1 hours per week# and sometimes more. I liked the
challenge. 9very week# we had to take apart and replace the bearings to keep
the rolling mill going# or the whole steel mill would shut down# so I could be
called out any time# sometimes with only 0 or 7 hours sleep# or no sleep at all.
I kept a little black book where I would write things down# which I still have.
The service manual stated it would take 7! hours to tear down and rebuild the
mill. ;e got that down to 0+ hours# and then down to 10 hours by figuring out
e6actly what was needed# and where e6actly to find it when it was needed.
<t this point in the interview# Ted )elly went into a room of his original family home# and
brought out the well@worn# very tidy# little black book which displayed# in ama2ing detail# the
rolling mill and hand@written notes on parts re'uired to rebuild the entire mill.
<s was usual practice at Nucor# Ted )elly was first hired to construct the facility# and then
remained to operate the facility after it was constructed. Unlike most employees# he had some
specialist training prior to coming to Nucor# in his case training as a millwright. Ted )elly
became lead man over the rolling mill shop# second only to the rolling mill foreman# who
became Ted )elly=s lifelong friend. Ted )elly liked working for Nucor in %arlington and he
appreciated the benefits that Nucor offered# as he e6plained(
&ike the others# I wasn=t late because I would lose bonus for the day. I didn=t
miss a day or I would lose bonus for the week. The bonus was good and it
didn=t take me long to figure out what the bonus was at the end of the week.
The pay# including bonus# was a lot better than at %i6ie# twice more. Then there
was the profit sharing plan where everyone would share in Nucor=s profits. I
also bought all the Nucor stock I couldD Nucor put in 11Q for every dollar of
stock we bought so we couldn=t lose. I would tell a lot of people# NKou
automatically make 11L on your money=# but many didn=t listen. Then there
were the special bonuses of J"11 when Nucor did especially well# the +11k@
retirement plan# and the stock given to us for long@term service.
Ted )elly added about Nucor# -They treated employees so well that when a union vote was
taken 3in the 1*1s4# the result was so lop@sided that the union ,ust 'uit. The union would
have cut out our pay and benefits. Aeople would have to be cra2y to vote for a union.. /e
17
also talked enthusiastically about the yearly company dinners when )en Iverson would
attend. Ted )elly final comments were about his son obtaining his college degree through
Nucor=s college program and about his son@in@law who now works for Nucor.
/owever# it was <lice )elly# Ted )elly=s wife of +" years# who had the final word on life at
Nucor for the )elly=s# and how effective were Nucor=s incentives for goal@oriented
employees like Ted )elly(
5ifteen hours a day# supper on the table G cold G and with that little black book
of Ted=s# they would call him up at all times of the night# * days at week. I 'uit
%i6ie when Ted began working for Nucor# because he needed me home# with all
the time he spent at Nucor. Ted said this made sense because he made more
bonus in a week than I made at %i6ie in a month. $ut I lost my medical plan.
Now my pension goes to medical premiums# which went way up when I was
found with cancer ! years ago and# on top of that# there is the deductible.
Ted did benefit from working at Nucor# and his ,ob got easier later. Bur son and
daughter were provided for in ways other children were not# and they turned out
real well. So it was a good life. $ut there were times when Ted was needed at
home for me and the kids# and he wasn=t here 3<. )elly 011+4.
$ncenti&es and Co*pensation -#ans
Nucor=s unusual dedication to its employees was reinforced in 1*" with the Nucor
5oundation that was established to provide tertiary education for the children of Nucor
workers. The 5oundation program originated when two employees died in an on@the@,ob
accident and managers came up with the idea of education as one way to help the employees=
surviving children. &ater the program was e6panded to cover all children of all employees
e6cept officers. $y 1"# scholarships had been increased to about J0#111 per year for four
years 3JF#1114 of vocational training or higher education beyond high school. Bne new
employee# with many children to support# broke into tears on finding out that all his children
would 'ualify# no matter what form of higher education they might choose to pursue.
The scholarship plan was one of a range of plans developed to reward Nucor employees.
Nucor offered medical and dental and life and accident insurance plans. Nucor also
supported the profit@sharing plan that impressed Ted )elly# where a minimum of 11L of pre@
1+
ta6 profits were contributed to employees below the officer level# with 1"@01L paid as cash
and the remainder placed in trust. <fter seven years service# employees became fully vested
and entitled to their own contributions and all contributions by the company to the plan# plus
any gains. These funds were held in trust and paid to employees when they left the employ
of Nucor or retired. Special benefits included awards for service such as the 0" shares of
Nucor common stock that Ted )elly also mentioned( " shares of Nucor common stock for
each of " year=s service. 5inally# the money that employees made in the form of base pay
and bonus made Nucor employees the highest paid workers in the steel industry. 3See
5igure + for a summary of Nucor=s compensation plans.4
%igure 0: Nucor6s Co*pensation -#ans 3source( The Nucor Story4
1. Aroduction Incentive Alan G applied to most employees# including production
supervisors and the employees they supervised in the manufacture of all Nucor
products. $onuses were paid weekly to work groups# based upon preset# non@
discretionary production goals that were designed to create peer pressure to
meet goals and attendance and tardiness standards. No bonus was given out if
the machines stood idle# to ensure that all machines were regularly serviced and
well maintained. $onuses averaged F1L @1"1 L of base wage. Eegular
posting of charts in the cafeteria apprised employees of their bonus level.
0. %epartment Canager Incentive Alan G incentive bonuses based upon return on
assets of the facilities. These bonuses were as much as F1L of base salary and
strictly based on pre@set calculations and thus non@discretionary.
7. Non@production and Non@department Canager Incentive Alan G incentive
bonuses for employees other than N1= and N0= above# including accountants#
engineers and secretaries. Kearly bonuses were as much as 0"L of salary.
+. Senior Bfficers Incentive Alan G with base salaries set at less than comparable
companies# bonuses were based on return on stockholders= e'uity# above a
minimum earnings target. < portion of preta6 earnings was divided among
senior officers# typically +1L stock and !1L cash.
That is not to suggest perfection at Nucor. 5or e6ample# engineers= total pay was much closer
to the industry average and at times there were difficulties with their recruitment and retention.
1"
he !e#ati&e $*portance of echno#ogy and Cu#ture
Nucor was known for technological leadership# and managers and employees became skilled
at adopting the most useful technology when constructing and operating facilities# safely# at
lowest possible cost with highest possible output. The right technology was important# and
Nucor people learned to perfect the technology supplied by others and# in this way# make it
their own. /owever# more important than technology was that Nucor remain a place where
people were treated fairly and with respect. )en Iverson 31F4 e6plained the relative
importance of technology to the success of Nucor( -I=m often asked( N/ow do you e6plain
Nucor=s success>= Cy stock reply( NIt is *1L culture and 71L technology.= ;ithout a doubt
Nucor=s culture is its most important source of competitive advantage# and always will be.
3p.*" and p.*!4. Bne person who mirrored the culture was $etsy &iberman.
$etsy &iberman was one of two secretaries hired in 1!*# shortly after Iverson and Siegel set
up the office in Charlotte in 1!!. In 1F7# after spending a few years away in another part
of the country# she returned to Charlotte and Nucor -to be back home. 3&iberman# 011+4.
There she remained# proud to do her very best# every hour of every day for Nucor. Eecently#
$etsy &iberman 3011"4 wrote a letter to e6plain how she saw things at Nucor(
;e all worked withOfor each other. It was a wonderful# hard@working# and caring
group. ;hen I came back in 1F7# my title became -Secretary@Eeceptionist.
and that remains to this day.
Cr. Iverson was a dynamic person who cared deeply for all of his employees
and any one of them could call and talk to him <NKTIC9. 9ven to this day#
employees have an admiration and respect for him that is rare for C9Bs of top
companies in this countryH. Cr. Siegel was the financial genius and certainly
helped to make important decisions 3whether good or bad4 that are part of the
success of Nucor. Cr. Iverson was the man the employees worshipped because
of his -down to earth. nature and a personality to top all.H /is dedication to
Nucor employees continues to motivate workers to this dayP
Aeople mattered at Nucor. <s a prime e6ample# Nucor entered the steel fastener market after
domestic U.S. producers had given up to foreign suppliers to retain ,obs in <merica# and to
show that <mericans were capable of competing on even# not subsidi2ed# terms.
1!
In short# top managers set the e6ample in progressively looking at the world and in dealing
with others fairly. They encouraged others including Nucor partner firms# technology@
suppliers# and managers and employees# to pull together to accomplish things that were
considered impossible by competing firms. Two such pro,ects were the Nucor@Kamato ,oint
venture and the Crawfordsville thin slab pro,ect.
he Nucor)4a*ato :oint 2enture and the Crawfords&i##e hin "#a9 -ro;ect
$oth the Nucor@Kamato ,oint venture and Crawfordsville thin slab pro,ect took Nucor into
the last remaining territories of $ig Steel. The first venture re'uired Nucor 3"1L4 and its
partner# Kamato )ogyo 3+L4# to transfer :apanese steel technology and perfect it in the U.S.
The pro,ect tested Nucor on its technical ability# and on its ability to partner with a foreign
steel@maker. The Nucor@Kamato pro,ect would allow Nucor to become the first mini@mill in
North <merica to produce the large section steel beams and columns that are used by builders
of high@rise steel towers# about *L of the 111 million ton a year# total U.S. steel market.
<greement to build the !"1 thousand ton per year facility was reached in 1F! and
construction on the Nucor@Kamato facility began in 1FF. It was operational in 1F# fast
enough to impress the :apanese. $y 1"# Nucor@Kamato facility was producing three times
the original design capacity# about 0 million tons of large@section# structural steel annually.
The thin slab plant in Crawfordsville# Indiana was also approved in 1F!. It would use an
entirely new and revolutionary 8erman process that was only in the prototype stage at the
time of the approval. The process was about as close possible to making the casting process
continuous G the age@old# steel@makers= dream G since this would eliminate the e6pensive#
separate steps of having to form# reheat and roll billets to make the steel shapes. It also
would allow Nucor to enter the final +1L of the total steel market at a pro,ected cost 01L
below that of $ig Steel. Capacity would be about 0 million tons annually.
&ike all ma,or innovations by Nucor# the thin slab pro,ect would use technology developed
by others. Unlike all previous ventures# this would be more pioneering than perfecting
technology by Nucor engineers# managers and operators. The 8erman e'uipment maker#
SCS Concast# had only tested a scale model plant# and had yet to conduct tests at full scale.
1*
The first challenge was the dangerous tendency of the e6tremely hot metal to re@li'uefy
under the additional pressure of the thin e6trusion process# spewing out molten metal
everywhere. The second challenge was 'uality# since the thin steel sheeting would be used
for automobile bodies and enameled white ware 3e.g.# fridges and stoves4 where 'uality of
finish was paramount and each buyer was large with particular specifications.
96ecutives at $ig Steel believed that Nucor=s commitment to two large pro,ects at the same
time# one involving a foreign partner and the other involving untried technology# would spell
the end for Nucor. The predicted doom of $ig Steel may have been wishful thinking. In
1F* the Wall Street Journal ventured that# if Nucor was successful# -it would be a new
frontier in the battle with $ig Steel. 3p.!4.
Big "tee# and %oreign Co*petition
The largest integrated steel makers or $ig Steel once controlled the U.S. steel market. Bver
the past 01 years# combined market share of the three largest integrated steel makers in the
U.S. had fallen significantly# and this trend showed no sign of turning around. $ig Steel
blamed its woes on imports# crying for more U.S. 8overnment protection by way of
increased tariffs on steel coming from :apan and )orea and other <sian countries.
The real problem# according to Nucor top managers# was $ig Steel=s poor management
practices# bloated number of supervisors and technological obsolescence. $ig Steel plants
were old# and only $ethlehem Steel had a mill constructed later than the 1"1s# and it was
already more than a 'uarter century old by 1". <dding insult to in,ury# Nucor managers
pointed out that steel was heavy and e6pensive to ship# and so U.S. steel@makers were not
disadvantaged# compared to foreign steel@makers 3Iverson# 1F4.
$y the 11s# even Canada had made inroads with shipping steel to the U.S. 396hibit !( U.S.
and Canadian# indicates net tons of steel# e6ported and imported# 11 to 1".4
1F
7xhi9it 1: $*ported "tee# and "tee# -roduction in the 8.". and Canada, 1991 to 1995
3source( <merican Iron and Steel Institute# annual statistical reports4
8nited "tates
Classification 1995 1990 1993 199+ 1991
Aroduction
3millions of net tons4
Total Eaw Steel 11+. 111.! *. 0.1 F*.
$asic B6ygen !0." !1.1 ".+ "*.! "0.*
9lectric +0.+ 7.! 7F.+ 7".7 77.F
Shipments# Ca,or
Aroducts# <ll 8rades
3millions of net tons4
Sheets and Strip +*.F +*.1 ++.1 7.F 7!.!
$ars and Tool Steel 1!.1 1".! 1+." 17.0 10.F
Shapes# Alates and Ailing 1".7 1+." 10. 10.! 10.!
Tin Cill Aroducts 7. +.1 +.1 7. +.1
Aipe and Tubing ".+ ".1 +.+ +.0 +."
;ire 1.* 1.F 1.F 1. 1.1
5oreign Trade
3millions of net tons4
Steel Imports 0+.+ 71.1 1." 1*.1 1".F
Steel 96ports *.1 7.F +.1 +.7 !.7
Canada
Classification 1995 1990 1993 199+ 1991
Aroduction
3millions of net tons4
Total Eaw Steel 1".* 1".0 1".F 1".7 1+.0
$asic B6ygen .* .7 11.1 11.0 .!
9lectric !.1 ". ".! ".1 +.!
5oreign Trade
3millions of net tons4
Steel Imports ".* ".! 7.! 0.! 0.*
Steel 96ports ".1 +. ".+ ".+ ".1
Nucor6s op (anage*ent ea*
C9B )en Iverson was technically and managerially astute# and he knew the steel industry
well. /e was also Nfast on his feet=# could ad,ust to most any situation# and he was friendly#
easy to approach and a fine spokesman for Nucor. If he had any weakness G and this was not
weakness in most instances G Iverson tended to be optimistic and give people the Nbenefit of
the doubt=. C5B Samuel Siegel was also managerially astute and knowledgeable. /is
weakness was a tendency towards impulsiveness though# over the years# he became more
deliberate to balance )en Iverson=s optimism# as he e6plained(
Iverson# with his usual optimism# was going to start the first mini 3steel4 mill in
%arlington# South Carolina by a certain time# and it didn=t work out. ;hen the plant
was first built# it was losing money big time# and I was tearing my hair out. &ater# I
learned to ad,ust for his normal optimism on large capital pro,ects 3Siegel 3011+b4.
1
Siegel was not the public speaker that Iverson was# but he was a very good negotiator and# by
'uiet determination# ensured that the terms and conditions of any negotiations were fair to
Nucor=s interests. Siegel had this to say about what had made them so effective as a team(
)en Iverson and I never tried to figure out what made us an effective team.
;hat it came down to was following good# basic principles. The area
continually emphasi2ed at Nucor was productivity and# in that regard# what was
used was a lot of incentives. It wasn=t complicated. Kou had to tell your
employees what was important( productivity# profitability# safety and employee
relations. )en was very big on employee relations and the college program is
one e6ample 3Siegel# 011+b4.

Top managers Iverson and Siegel let their sense of fair play Ndo the talking=# working hard at
not becoming seduced by their success or others= praise# as )en Iverson 31F4 stated(
9ach day# we all face situations that re'uire us to e6ercise our own moral
,udgment. In fact# all the primary rewards in business G prestige# power#
money G appeal to our base cravingsH. 5or all those reasons and more#
behaving ethically in business can be very hard work. $ut it is work you must
take 3p. 1*1 and p. 1*"4.
Nucor News 314 reported Sam Siegel e6pressing similar sentiments to those of Iverson(
I=ve always tried to be fair to the employees# customers# suppliers and
stakeholders of Nucor because they=ve been invaluable to the company. I=ve
tried hard to set a high ethical e6ample for others. Nucor has been successful
because we=ve always emphasi2ed good basic business practices. ;e=ve
never been too fancy. ;e=ve kept things simple.
5ancy they may not have been# but Nucor top managers were unafraid to stick with their
principles and# only then# ask their employees to do the same. 5or e6ample# in 11 when
Nucor profits fell 1+L# )en Iverson earned J7!F#111. This was 71L less than he made
during 1FF# a year of record profits. %uring very bad years# such as in 1F0# Iverson=s
compensation was reduced to J111#111# probably making him the lowest paid 5ortune "11
C9B in the country that year.
01
Iverson was happy to tell people about his salary cut# because it set an e6ample for
employees who had their compensation drop to base pay or less# as the work week was
reduced from five to four days to keep the Nucor -no lay@off. policy in place. Siegel
matched Iverson=s reductions in percentage terms and took even less. Iverson and Siegel
were not preoccupied with compensation but concerned with doing a good ,ob and that
meant# among other things# financial statements had to be simple and understandable. $y
1"# Siegel had reduced Nucor=s financial statements to only four pages# including notes#
the fewest of any company he had seen. No more was needed# he contended 3Siegel# 011+c4.
Iverson deferred to Siegel in financial matters and listened to Siegel on managerial matters.
In turn# Siegel generally left new capital pro,ect decisions to Iverson and listened to Iverson
on financial matters. <s Siegel pointed out# -I became a better manager for having known
)en Iverson and# )en became a better manager for having known me. 3Siegel# 011+b4.
The top managers of Nucor simply followed their basic# egalitarian philosophy of treating
others# and themselves as they deserved to be treated G fairly G and not treating others as did
not deserve to be treated G unfairly or worse. <ll this might be interpreted as based on
religious ideas. /owever# )en Iverson was not an overtly religious man. /e considered his
self@discipline and principles as a natural conse'uence of the caring family he grew up in#
and the responsibility e6pected of him by his father 3Iverson# 1F4.
Aerhaps Siegel was the more religious but he did not consider himself strictly bound by
religious tradition either. Together# they searched out matters for themselves# with open
minds. They were determined to arrive at fair and practical decisions and they would ad,ust
as necessary. Bne e6ample of a fair and practical decision was with Nucor=s settlement with
the State of <ri2ona on a pollution claim with a Nucor subsidiary# many years after Nucor
had sold the subsidiary. Siegel e6plained the situation and its resolution this way(
The payment to the State of <ri2ona for pollution was made in the early
11s. <t that time# Nucor was the only corporation to do so. ;e believed
that it was better to furnish funds to the State to help take care of the problem
rather than 3like most other companies4 spend funds for attorneys and
consultants 3personal correspondence# 011"4.
01
In 1F+# with Siegel=s support# Iverson appointed %ave <ycock as Aresident and Chief
Bperating Bfficer 3CBB4# to share the increasing management workload and to address a
growing concern of the $oard of %irectors about succession.
%ave <ycock was known as an e6ceptionally talented production manager. /e began his
career in 1"+ as a welding fabricator on the shop floor of the Iulcraft steel ,oist plant in
5lorence# South Carolina. /is promotions# first to sales manager# then to manager of the
Norfolk ,oist plant in Nebraska and# finally# to Aresident and CBB were evidence that any
employee might find a career in Nucor. The new arrangement worked out well until <ycock
retired in 11. That same year )en Iverson asked :ohn Correnti to replace %ave <ycock.
:ohn Correnti ,oined Nucor in 1F1# after being a construction manager at U.S. Steel. /e
was manager of Nucor=s $lythville# <rkansas plant when appointed Aresident and CBB in
11. Correnti was charming# well educated# knowledgeable# and an e6cellent talker. In
11# the year before :ohn Correnti=s promotion to Aresident# Siegel raised concern with
Iverson over Correnti=s standards. /owever# :ohn Correnti had become like a second son to
)en Iverson and Iverson would not listen to Siegel on the matter. 5rom then on# Siegel
offered less advice. It was in this conte6t that the Iron Carbide Aro,ect took shape.
he $ron Car9ide -#ant in rinidad
In 10 )en Iverson championed the iron carbide pro,ect in Trinidad. Iron carbide was a
new product that might replace the scrap metal that was becoming more e6pensive to source
in the U.S. The pro,ect seemed timely. It also went against some of Nucor=s policies.
5irst# the pro,ect depended on foreign supply of cheap natural gas# and foreign government
subsidies. Nucor had a policy of not depending on government support or subsidies# though
there were e6ceptions. 5or e6ample# Nucor managers worked with government for benefits
that were in the interest of Nucor# and the community or state at large# such as with ta6
credits for investing in less than the most favorable locations. These were rare.
00
Secondly# e6perience suggested that Nucor did less well when it strayed away from its
policies on keeping people of strong work ethic# working productively. 9ven the Alymouth#
Utah location posed problems in attracting the most productive employees# supervisors and
managers. /ow would e6perienced managers# supervisors and employees be attracted to
Trinidad and# importantly# how would they keep new employees productive in a country not
known for its work ethic> Thirdly# there were the comple6 logistics of designing and
constructing an entirely new plant in this foreign country# and e6porting the semi@finished
iron carbide product to the U.S.
$y the end of 1" the pro,ect was in trouble on many fronts# managerially and technically.
The first iron carbide product was shipped in 1"# and costs proved prohibitive. Things
continued not to go as planned and the plant even turned out to be designed and constructed
-all wrong.. There was now no chance of making a cost@effective# iron carbide product with
this plant# even if possible elsewhere. 5ortunately Sam Siegel had started a reserve fund as
soon as the pro,ect was begun# to cushion losses the company might incur if the pro,ect failed.
he ,ay of ,ecision
Nucor would soon be the biggest as well as the most productive and profitable steel company
in the U.S. )en Iverson# the brilliant manager and C9B for more than a 'uarter century# was
! in 1"# and had been in ill health for " years Siegel continued to look out for the
company=s interest at every opportunity but by 1" he was !" and planned to retire within the
ne6t several years. $y the end of 1" the decision on Iverson=s replacement as C9B could no
longer be put off and would rest with a vote of the $oard. Iverson insisted on remaining as
Chairman of the $oard for as long as he could.
In 1" the $oard of %irectors of Nucor was an -insider board. of mainly e6perienced Nucor
managers who had served the interests of Nucor for decades. They knew how to make
decisions# not -rubber@stamp. ,ust any recommendation. They also knew how to ,udge
things# though their e6perience was mostly about new pro,ects and with other large capital
decisions. None# e6cept Siegel# had been in a position to ,udge the potential of a vibrant and
healthy )en Iverson# Siegel=s high standard for the office of C9B.
07
5or the first time in decades# Sam Siegel sensed that Nucor was drifting. The present record@
setting performance was a result of the momentum of a developed culture. <nything less
than the highest levels of diligence would place at risk what )en Iverson and he and so many
others at Nucor had worked so hard to achieve. <s Sam Siegel walked toward the
$oardroom# a famous lament came to mind# -The lesson of history is that we do not learn
from the lessons of history.. 3Nucor=s history is summari2ed in <ppendi6 " and highlights
from the careers of Iverson and Siegel are shown in <ppendi6 !.4

"uggested <uestions regarding #eadership, strategy and cu#ture
;hat was it about the strategy and culture that made Nucor so uni'uely effective in
the steel industry over the 71@year period of the case> 3Bne approach( look to the
simplicity of the strategy combined with the top management team=s sense of ethics
behind the Nucor culture.4
;hy did Siegel feel that Nucor was -drifting. and how might the $oard of %irectors
prevent this in facing up to the leadership succession challenge>
;hy did the Iverson@Siegel leadership@management style work so well at Nucor and
to what e6tent might this work in other companiesOindustries>
"uggested <uestions regarding 9usiness, go&ern*ent and society
/ow might model corporations such as Nucor advance democratic society in terms of
both increasing wealth and civility>
/ow might evidence from public sources on a contrary corporation# such as 9nron or
;orldCom# indicate contrary effects for society>
;hat are the implications for business and society of both model cases such as Nucor
and contrary cases such as 9nron> 3Note that <dam Smith=s 1**! Wealth of Nations
advances an often@overlooked duality( enough freedom to create wealth and enough
responsibility to sustain it for the benefit of democratic societies.4
-ostscript
)en Iverson passed away in 0110. Needless to say# Sam Siegel# like all who knew )en
Iverson# was very saddened. Though the decision of 1"# and the few years leading up to it#
0+
remained disappointing to Siegel# it was time to consider all that Iverson and he# and so many
others# had accomplished together.
5irst# Sam Siegel was grateful to have known and worked with )en Iverson# knowing that they
had both built their careers on setting a high standard of responsibility at Nucor. Iverson had
been most proud of the way Nucor people were treated and what they accomplished# together.
$oth believed that Nucor would truly benefit when all stakeholders benefited( customers#
employees# managers# suppliers# shareholders# communities and country.
Secondly# Sam Siegel was glad to have played his part# including seeing to it that all Nucor
people were acknowledged# in alphabetical order# on the cover of Nucor=s annual reportD that
Nucor accounts were easy to understandD and that transactions were fairly made# clearly
accounted for# and clearly and simply reported. Caking things fair# and simple# took hard work
but# as )en Iverson had stated# -this was work worth doing..
5inally# Sam Siegel was proud of the way Nucor took responsibility# especially when things
went wrong. Bn 11 September 011+# Sam Siegel shared some thoughts in an open lecture
titled -current issues in business.# attended by university students# administrators# and
community and business managers in Bntario Canada. Siegel 3011+c4 recollected(
I guess it was a year and a half agoD I wrote a note to ;arren $uffet# the chairman
of $erkshire /athaway. $erkshire /athaway# from time to time# had owned stock of
Nucor. Aart of what I mentioned in the note was this( -The $oardRs Chairman and
Iice@chairman should not be C9B. I could grant you e6ceptions could be made.
3$uffet is chairman of $erkshire /athaway and I didnRt want to rankle him.4 The
$oardRs independent compensation committee should hire and utili2e its own
compensation consultants# in addition to managementRs. The $oard should hire and
utili2e its own legal counsel# in addition to management=s.
The $oardRs audit committee should hire and utili2e its own outside accountants#
not a big four firmD the reason for not a big four firm is that# if they do work for the
$oard# they are big enough to be a threat to the e6isting audit firm. They should go
down a notch# and not use such a large firm. That=s in addition to the regular
auditors. These acts alone would not necessarily eliminate today=s rampant $oard
rubber stamp@ism# but it may help..
0"
;ell surprisingly# $uffet wrote me right back# the ne6t day# and said# SI really
appreciate your noteD what you and )en Iverson accomplished in a very tough
industry was absolutely miraculousP IRve been an admirer of Nucor for decades..
!eferences:
<merican Iron and Steel Institute 1!. <nnual statistical reports 11@1".
Coblin# :. 011+. Interview# Charlotte# North Carolina# 07 :uly.
Collins# :. 0111. Good to Great# New Kork( /arper Collins.
%rucker# A. 5. 1"+. The Practice of Management # New Kork( /arper and Eow.
Iverson# ). 1F. Plain talk# New Kork(;iley.
)elly# <. 011+. Interview# South Carolina# 00 :uly.
)elly# T. 011+. Interview# South Carolina# 00 :uly.
&iberman# $. 011+. Interview# 07 :uly.
&iberman# $. 011". &etter# :anuary 7.
Nucor <nnual Eeports# various years. Nucor Corporation# Charlotte# North Carolina.
Nucor News. 1. So who=s counting> <fter 7F years# Siegel set to retire.
Nucor Story. 1". Nucor Corporation# Charlotte North Carolina.
Eodengen# :. &. 1*. The egend of Nucor Corporation# ;rite Stuff 9nterprises(
5ort &auderdale# 5lorida.
Siegel# S. 011+a. Telephone discussions and fa6 correspondence# <pril and Cay 011+.
Siegel# S. 011+b. Interviews# 01 and 07 :uly.
Siegel# S. 011+c. Current !ssues in "usiness# J$ W$ McConnell ecture in Strategic
Management# sponsored by Schulich School of $usiness# Kork University# and
5aculty of $usiness <dministration# &akehead University# 11 September 011+.
Siegel# S. 011". 5a6 correspondence# Cay.
Smith# <. 1F10# first published in 1**!. %n in&uiry into the nature and causes of
the wealth of nations$ &ondon( ;ard# &ock and Co. &td.
Iulcraft News. 1!0. Company Newsletter# 5lorence# North Carolina
;all Street :ournal. 1F*. :anuary F# p. !.
;alker# %. 011". 'rgani(ational Structures# Comparison of real structures and )enry
Min(berg*s ideals# unpublished research report# Casters of Canagement Arogram#
&akehead University# Bntario
0!
'ppendix 1: "u**ary %inancia# "tate*ents for 1915 and 1995
1915 1995
%or the 4ear
Net sales HHHHHHHHHHHHHHHH.. J 00#711#"" J7#+!0#1+"#!+F
Costs and e6penses(
Cost of products sold HHHHHHHHHHH 1#"1#"1* 0#11#1!F#1*1
Carketing# administrative and other e6penses H. 0#*F"#*0F 171#!**#1!0
Interest e6pense 3income4 HHHHHHHHH ++!#7*7 31#17+#114
Total costs and e6pensesHHHHHHHHHH.. J 00#*+1#!1F 7#10#*11#1+7
9arnings before federal income ta6es 3loss4HHH 3 +71#1174 +70#77+#"1"
5ederal income ta6es HHHHHHHHHHH... TTTTnoneTTT 1"*#F11#111
Net earnings 3loss4HHHHHHHHHHHH.. 3 +71#1174 0*+#"7+#"1"
Net earnings per share 3negative4HHHHHHH 31.1*4 7.1+
?Special charges HHHHHHHHHHHHH. 1#F17#*+F none
Net earnings 3loss4 after special charges HHHH. 3 0#07+#*!14 0*+#"7+#"1"
%ividends declared per share HHHHHHHH.. none .0F
Aercentage of earnings to sales HHHHHHH... negative *.L
Eeturn on average e'uity HHHHHHHHHH negative 01.L
Capital e6penditures HHHHHHHHHHHH not relevant 0!7#+01#*F!
%epreciation HHHHHHHHHHHHHHH not relevant 1*7#FF*#!"*
Sales per employee HHHHHHHHHHHH.. 7*#011 "*1#7"7
't 4ear 7nd
Current assets HHHHHHHHHHHHHH.. J "#+"F#!+ J F71#*+1#71F
Current liabilities HHHHHHHHHHHHH. 7#!*+#1+F ++*#17!#711
;orking capital HHHHHHHHHHHHH... 1#*F+#"+! 7F7#!1"#11*
Current ratio HHHHHHHHHHHHHH. 1.0 1.
Aroperty# plant and e'uipment HHHHHHHH 1#11+#1" 1#+!"#+11#11"
Total assets HHHHHHHHHHHHHHH.. !#"*0#F+7 0#0!#1+1#777
&ong@term debt and other liabilities HHHHH 0#"11#*07 11!#F"1#111
Aercentage of debt to capital HHHHHHHH 7F.1L !.0L
Stockholders= e'uity HHHHHHHHHHH... *!0#FF1 1#7F0#110#1"
Aer share HHHHHHHHHHHHHHH.. 1.11 1".*F
Shares outstanding HHHHHHHHHHHH.. !#!"+#F*1 F*#"F#"1*
Stockholders HHHHHHHHHHHHHHH 71#111 7#111
9mployees HHHHHHHHHHHHHHH.. !11 !#011
?Special Charges in 1!"(
Termination settlement with former Aresident USJ 1F1#0!
<bnormal contract loss 0"1#F++
&oss on li'uidation of 9lectromechanical %ivision 1!1#10F
&oss on sale of Ialley Sheet Cetal %ivision "*F#0F
0*
&oss on sale of U.S. Semcor %ivision !70#71
Total( J1#F17#*+F
'ppendix +: =igh#ights of Nucor6s !ise fro* 1915 to 1995 3source( various4
1915. (anage*ent Change
Siegel refused to stay on unless Iverson was appointed president and Siegel treasurer M secretary.
$oard agreed. &ine of credit used to pay debt. %ivisions were sold that did not fit with future plans.
1911. Corporate (o&e
Company head'uarters was moved from Ahoeni6 <ri2ona to Charlotte# North Carolina. Iverson and
Siegel conceived of an incentive@based culture# where hard work and fair rewards were rules and not
the e6ceptions. Net income increased from @J+71#117 to UJ!F#11 from 1!" to 1!!.
1913 7thica# ,ecision)*aking
Nucor was on its way to capture 0"L of U.S. steel ,oist market. Canagement came up with a
simplified criteria G -e'uitability# rightness and practicality. G to make good# long@term decisions.
1915 $nno&ati&e (ini)*i##
Nucor=s planned its first automated# steel making mini@mill for %arlington# South Carolina# adapting
the innovative Swedish -,umping mill. technology.
1919 !esponsi9i#ity to 7*p#oyees
The %arlington mini@mill was made productive and profitable. <ll facilities remained union@free# as
workers received higher pay and greater freedom and responsibility than union shops.
1930 > 1930 7ar#y !ecognition
In 1*1# $oard agreed to Sam Siegel=s suggestion on name change to Nucor Corporation from
Nuclear Corporation of <merica. In 1*0 Nucor planned second mini@mill for Norfolk# Nebraska and
"
th
steel ,oist plant went into operation in St. :oe# Indiana. %esigned by Siegel# the 1*0 <nnual
Eeport was named best in category by +inancial World. In 1*0# Nucor=s employee incentive@plans
were ,udged best in industry. $y 1*+# Iverson and Siegel sensed Nucor would be -unstoppable..
1935 > 1939 7*p#oyee $ncenti&es
$y 1*"# Nucor had 0#711 employees# net sales of J101 million and net earnings of J*.! million. In
1*"# Siegel placed names of all employees on front cover of its annual report. In 1*F# Nucor gave
employees a special bonus for -better@than@e6pected. profits# as part of -gain@sharing. plan.
1950 > 1950 Business without /reed or %ear
In 1F0# recession hit the steel industry. Nucor e6tended its -gain@sharing. plan to include no lay@off
-pain@sharing.. Arofitability fell from J7" to J00 million. In contrast# $ig Steel had massive lay@offs#
recording losses in Jbillions. $y 1F+# Nucor revenues and profits rebounded.
1955)1959 '##iances and $nno&ation
In 1F!# Nucor made alliance with :apanese steel@maker# Kamato )ogyo# to build a U.S. mini@mill to
make large steel beams and columns# products available only through integrated mills. Nucor $oard
also approved -world first.# thin slab mini@mill for Crawfordsville# Indiana that would allow Nucor to
enter final +1L of market and compete with $ig Steel in all categories.
1990 >1995 "uccess and "uccession
0F
$y 11# both the Nucor@Kamato and Crawfordsville plants were in operation. $y 1+# Nucor was
the most productive and profitable# and poised to become the largest# steel@maker in the U.S. In 1"#
Iverson stepped down as C9B because of heart and related health problems.
'ppendix 3: ?ocation of Nucor %aci#ities 3source( The Nucor Story# p.F M p.4

1.NUCOR STEEL
Darlington, South Carolina
Norfolk, Nebraska
Jewett, Teas
!l"#outh, Utah
Crawfor$s%ille, &n$iana
'i(k#an, )rkansas
*erkele", South Carolina
'ertfor$, North Carolina
+. NUCOR COLD ,&N&S'
Darlington, South Carolina
Norfolk, Nebraska
*righa# Cit", Utah
-. NUCOR .R&ND&N. *)LLS
*righa# Cit", Utah
/. NUCOR ,)STENER
0. NUCOR *U&LD&N. S1STE2S
3aterloo, &n$iana
Swansea, South Carolina
4. 5ULCR),T
,loren(e, South Carolina
Norfolk, Nebraska
,ort !a"ne, )laba#a
.ra6elan$, Teas
Saint Joe, &n$iana
*righa# Cit", Utah
7. NUCOR 8 1)2)TO STEEL CO2!)N1
*l"the%ille, )rkansas
9. NUCOR *E)R&N. !RODUCTS, &NC.
3ilson, North Carolina
NUCOR COR!OR)TE 'E)D:U)RTERS
Charlotte, North Carolina
0
Saint Joe, &n$iana
Conwa", )rkansas
'ppendix 0: Nucor6s @rganiAationa# "tructure in 1995 3source( %. ;alker 011"4
Nucor Building
Systems
3aterloo
Swansea
Planning
Nucor Steel
Darlington
Norfolk
Vulcraft
,loren(e
Norfolk
,ort !a"ne
Nucor Cold
Finish
Darlington
Norfolk
*righa# Cit"
'ertfor$
Vice
President
and General
Manager
T"6i(al Di%isional Stru(ture, shown for Norfolk ,a(ilit"
Construction
Coordinator
Maintenance Sales Controller
Melting &
Casting
Melting
Supervisor
Accounts
Supervisor
Board of irectors
Personnel Finance
President & C!! Chairman & C"!
*erkele"
Nucor Grinding
Balls
*righa# Cit"
Nucor
Fastener
Saint Joe
Conwa"
Crawfor$s%ille
!l"#outh
Jewett
Nucor#$amato
Steel Company
*l"the%ille
%olling &
Finishing
Vice Chairman & CF!
.ra6elan$
Saint Joe
*righa# Cit"
Nucor Bearing
Products& 'nc(
3ilson
'i(k#an
71
'ppendix 5: Nucor =istorica# ,ata fro* 1910 to 1995 3source( Nucor annual reports4
7'!N$N/"
BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB
K9<E N9T S<&9S BA9E<TIBNS BT/9E N9T A9E S/<E9 TBT<& <SS9TS
AEIBE C<N<89C9NT
1!1 0#1F0#01+ 37!*#1+4 30!1#F04 3!0F#*F4 &oss 1#F7*#110
1!1 +#11+#+1F 7*#11! 31!#1014 7!0#F" 1.11 "#!71#1*F
1!0 #111#"F 0+#1" 3!F7#7074 3!"#00F4 &oss *#1F+#7"
1!7 1"#7*+#+F* 0!1#*11 0+1#111 "11#*11 1.11 F#70+#*"
1!+ 1*#+F"#71 77#0!+ 71#111 !7#0!+ 1.11 11#77*#""
1!" 00#711#"" 3+71#1174 31#F17#*+F4 30#07+#*!14 &oss !#7*#0"1
AE9S9NT C<N<89C9NT
1!! 07#11!#+F7 !F#11 !7"#111 1#777#11 1.10 F#11#11
1!* 07#!11#17 F00#+0+ FF1#F70 1#*17#0"! 1.17 11#"+!#+F
1!F 7"#"++#17 1#110#"+ 1#07"#F0 0#07F#7! 1.17 1!#"11#F!!
1! +!#701#** 1#011#1F7 1#10"#111 0#77"#1F7 1.10 0+#!""#F11
1*1 "1#*"1#"+! 1#1+1#*"* @@ 1#1+1#*"* 1.10 0F#F11#1F7
1*1 !+#*!1#!7+ 0#*+1#!+ @@ 0#*+1#!+ 1.1+ 77#1!F#11+
1*0 F7#"*!#10F +#!!F#11 @@ +#!!F#11 1.1* +*#"7*#0+*
1*7 117#17#!1* !#11#1+0 @@ !#11.1+0 1.1 !*#""1#111
1*+ 1!1#+1!#71 #!F1#1F7 @@ #!F1#1F7 1.1+ F0#17F#*+F
1*" 101#+!*#0F+ *#"F1#*FF @@ *#"F1#*FF 1.11 0#!7#+17
1*! 1*"#*!F#+* F#!!#F1 @@ F#!!#F1 1.11 11#1"#"F1
1** 010#"0#F0 10#+"0#"0 @@ 10#+"0#"0 1.1! 10F#111#F0
1*F 71!#7#!!* 0"#F+F#F+ @@ 0"#F+F#F+ 1.77 17#+"+#!7
1* +0F#!F1#**F +0#0!+#"7* @@ +0#0!+#"7* 1."0 0+7#111#"1+
1F1 +F0#+01#7!7 +"#1!1#1F @@ +"#1!1#1F 1."" 01#001#F!*
1F1 "++#F01#!01 7+#*0F#!! @@ 7+#*0F!! 1.+0 7F+#*F0#10*
1F0 +F!#11F#1!0 00#10#1!+ @@ 00#10#1!+ 1.0* 7*1#!70#+1
1F7 "+0#"71#+71 0*#F!+#71F @@ 0*#F!+#71F 1.77 +0"#"!*#1"0
1F+ !!1#0"#00 ++#"+F#+"1 @@ ++#"+F#+"1 1."7 +F0#1FF#+!"
1F" *"F#+"#7*+ "F#+*F#7"0 @@ "F#+*F#7"0 1.!F "!1#711#1FF
1F! *""#00F#7 +!#+7F#FFF @@ +!#+7F#FFF 1."+ "*1#!1*#!++
1F* F"1#100#17 "1#"7+#+"1 @@ "1#"7+#+"1 1.!1 !"+#11#17
1FF 1#1!1#7!+#11 *1#FF1#101 7F#""F#F00 11#+7#F+0 1.0 +#!!1#*11
1F 1#0!#11*#+*0 "*#F7"#F++ @@ "*#F7"#F++ 1.!F 1#177#F71#"10
11 1#+F1#!71#111 *"#1!"#0!1 @@ *"#1!"#0!1 1.FF 1#17"#FF!#1!1
11 1#+!"#+"!#"!! !+#*1!#+ @@ !+#*1!#+ 1.*" 1#1F1#"*!#*F
10 1#!1#07+#F*! *#00"#*17 @@ *#00"#*17 1.0 1#"1*#7F0#0""
17 0#0"7#*7F#711 107#"1#!1* @@ 107#"1#!1* 1.+0 1#F0#0!F#700
1+ 0#*"#"!#+"! 00!#!70#F++ @@ 00!#!70#F++ 0.!1 0#111#01#1!"
1" 7#+!0#1+"#!+F 0*+#"7+#"1" @@ 0*+#"7+#"1" 7.1+ 0#0!#1+1#777
71
'ppendix 1: Career =igh#ights of wo op (anagers at Nucor 3source( various4
Cenneth $&erson "a*ue# "iege#
)en Iverson ,oined Nucor in 1!0 as vice@
president and general manager of steel ,oist
division# IulcraftD he was elected president
of Nuclear Corporation of <merica in 1!"#
and C9B and Chairman of the $oard since.
In 1!"# Iverson made decision to move
head office from Ahoeni6 <ri2ona to
Charlotte North Carolina and sold off Ialley
Sheet Cetal# U.S. Semcor and the 9lectro
mechanical division# as these did not fit
future plans. &arge loss posted.
$y 1!*# Iverson=s lean management and
worker@driven productivity set the Iulcraft
division on its way to capturing 0"L of steel
,oist market in U.S. and record profits.
Iverson=s 1!* recommendation to build
first mini steel mill accepted by $oard.
In 1F1 Iverson named best C9B in mini@
mill category by the ;all Street Transcript.
In 11 Iverson won the National Cetal of
Technology# the U.S. Congress=s highest
honor for innovation# awarded personally by
the Aresident of the U.S.# -5or his concept of
producing steel in mini mills using
revolutionary slab casting technology that
has revitali2ed the <merican Steel Industry..
In 1" )en Iverson retired as C9B of
Nucor Corporation. /e planned to remain
as Chairman of the $oard beyond 1".
TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
In 1+!# )enneth Iverson earned a bachelor of
science degree in aeronautical engineering from
Cornell University in New Kork. /e gained a
C.Sc. 3master of science4 degree in mechanical
engineering with a minor concentration in
metallurgy from Aurdue University in Indiana in
1+F. $efore ,oining Nucor# he was research
physicist at International /arvester# manager of
engineering at Ilium Corporation in 5reeport#
Illinois# assistant to the vice@president of
manufacturing at Indiana Steel# manager of sales
and metals at Cannon Cuskegon Corporation in
Cichigan and e6ecutive vice@president of Coast
Cetals in New :ersey. Until his death in 0110#
)en Iverson was an outspoken advocate for
business leading the way for progressive change.
Sam Siegel ,oined the company in 1!1and became
Controller in 1!+D Siegel was elected vice@
president# finance# and treasurer and secretary in
1!"D he was elected director in 1!F# e6ecutive
vice@president in 1F!# and vice@chairman of the
$oard in 11.
In 1!"# Siegel 'uit and refused to re,oin the
company unless )en Iverson was appointed
president and he# Siegel# treasurer and secretary.
$oard agreed.
In 1*1# Siegel proposed name change from
Nuclear Corporation of <merica to simply Nucor.
%esigned by Siegel# Nucor=s 1*0 annual report
named best in its category by 5inancial ;orld.
In 1*"# Siegel started the tradition to put all
employees= names on the cover of the annual
report. %uring the early 1F1s# Siegel told the
;all Street :ournal that layoffs weren=t in Nucor=s
plan. That could keep costs up slightly. /e added#
-;e think it=s worth it..
Siegel=s divestiture of tiny Eesearch Chemicals in
1FF represented net gain of J+1 million for Nucor.
C5B maga2ine recogni2ed Siegel as a genius in
11 for his financial practices.
In 1" Sam Siegel crafted legislation that brought a
recycling partnership with South Carolina that has
become model for other states# and this resulted in
corporate ta6 incentives for Nucor that at the time were
the highest ever granted in the U.S.
TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
In 1"0# Samuel Siegel earned a bachelor=s degree in
business administration with speciali2ations in
management and accounting# from $ernard $aruch
College in New Kork City. /e gained his certified
public accounting designation in 1!1. $efore
,oining Nucor# he was associated with New Kork
offices of( Touche EossD %ellwood %airy# Konkers#
Seaporcel Cetals# &ong Island CityD Topps Chewing
8um# $rooklyn# and Swift M Company# $rooklyn.
Cr. Samuel Siegel also has been affiliated with the
5inancial 96ecutives InstituteD <merican Institute
of CA<sD the <merican Society of Corporate
Secretaries and# since his retirement in 1# he
has been an invited speaker at universities in the
U.S. and Canada. In 011*# Samuel Siegel was
inducted into the U.S. %ccounting )all of +ame.
70
TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
TTTTT
Impressive financial results are part of the Nucor story. 5rom 1!" to 1"# )en Iverson and Sam Siegel
guided Nucor to increased sales of 1"1 times# from J00.7 million to J7." billion# to net earnings from
minus J0.0 million to plus J0*+." million and to stockholder=s e'uity increasing 1#F11 times# from J1.*!
million to J1.7F billion.
77