From Blueprints To Grand Design
As a young engineer, John D. Correnti built factories for a living. The job kept him moving about as often as a traveling salesman. He built blast furnaces in Ohio, a tire-cord factory in Georgia, a uranium plant in Texas. He was usually hundreds of miles away, he now jokes, by the time any glitches appeared. In 1983, Correnti was finishing up a steel mill in Utah for Nucor Corp. when he got a surprise phone call from Chairman F. Kenneth Iverson ordering him to run the plant. Correnti was stunned. "You didn't tell me I'd have to live with my mistakes," he protested.
Iverson just called Correnti again--and this time he's turning the whole shebang over to him. On Jan. 1, the 48-year-old executive will take over as CEO of the Charlotte (N.C.) minimill giant, which is poised to pass Bethlehem Steel Corp. as the second-biggest steel company in America, trailing only the U.S. Steel Group of USX Corp. The transition shouldn't be bumpy for the compact, silver-templed Correnti: Since 1991, he has been Nucor's chief operating officer. What's more, Iverson is sticking around as chairman. Still, taking over for a CEO who led Nucor to 30 years of strong sales growth and solid profits is daunting. "He's an icon," Correnti says.
ADJUSTMENTS NEEDED. Correnti's promotion comes at a trying time for Nucor. For a decade, it has been the high-flying Wal-Mart of the steel industry, keeping costs down on basic products and passing the savings on to customers. But as imitators spring up, also offering cheap, basic steel, Nucor finds itself under pressure to revamp its product mix and get into higher-margin steels. Meanwhile, it's still struggling with new technology at its iron carbide plant in Trinidad. Worried investors have traded the stock down to about $54, vs. last year's high of $72.
Correnti admits Nucor has some adjusting to do. To compete in premium markets, it must improve product quality. Customers in those markets, such as auto and appliance makers, also demand lots of customized attention, a specialty of the integrated steel companies.
Yet Correnti takes over a strong, nearly debt-free company. As new challengers grapple with startups in Kentucky and Indiana, Nucor already is experimenting with making upscale stainless steel and ultrathin gauges in its Indiana and Arkansas plants. Plus, it's busy building a third flat-rolled steel mill, a $500 million behemoth in South Carolina. Correnti expects Nucor's sales this year to jump 13%, to $3.35 billion, and earnings to top 1994's record $227 million. He's looking for 15% to 20% sales growth for the next five years. Even if Nucor stumbles, it likely will eclipse U.S. Steel as the No.1 steelmaker by the year 2000. "After South Carolina, it would just take one more mill," he says.
FRIEND OF BILL. The question is whether Nucor under Correnti can stay nimble. He says he will keep the 22-person headquarters small and continue delegating great powers to the plant managers. His job? To oversee new projects, stay in touch with Wall Street, and visit the 19 divisions two or three times a year. Except for all the flying time--spent reading mystery novels--Nucor's rapid growth rate won't be much of a drain on its CEO, he says; "What's the difference between 15 divisions and 30 divisions? It's just a few more lines on the page."
Correnti is regarded as harder-driving than the genial Iverson, and he preens a bit more in the limelight. He made friends with then-Governor Bill Clinton when the company was negotiating plant sites in Arkansas. And he continues to meet with Clinton, talking steel and politics at the White House--or, more recently, chatting at a Little Rock banquet for retiring Democratic Senator David H. Pryor. "I'm one of the Republican Friends of Bill," he says.
He's also quicker than Iverson to make enemies. Speaking at Robert Morris College in Pittsburgh, Correnti bulled into a subject most executives sidestep, saying matter-of-factly that he would "never dream of building a mill" in a union town like Pittsburgh. But as competition heats up for Nucor, Correnti's combative ways might be just what the company needs.