Stocks are up, and employees at a South Carolina plant are confident in the prospect of infrastructure spending and a tough stand on trade.
By PATRICIA COHEN
MAY 11, 2017
HUGER, S.C. — Safely stationed in the control pulpit, Chris St. Amand is watching the pot boil.
Working the day shift at the sprawling Nucor Steel plant along the Cooper River here, Mr. St. Amand monitors a four-foot-wide lasagna noodle of steel as it is dunked into a molten broth of protective shimmering zinc.
He tracks every step of this galvanization process — from the caldron’s 865-degree temperature to the line speed — on a bank of flashing screens. Except, that is, for the screen at the bottom right. “I watch our stock and the Dow Jones on that one,” he said.
Mr. St. Amand, whose pay package includes profit-sharing, likes what he sees. Since Election Day, Nucor is up 13 percent.
Across the steel industry, stock prices — and spirits — have been on the rise, lifted by President Trump’s vow to protect American manufacturers against cheaper imports and invest as much as $1 trillion in infrastructure over the next decade.
“If you could design a perfect administration from the perspective of the steel industry, this would be it,” said Thomas Gibson, president of the American Iron and Steel Institute, ticking off the president’s promises to hack away regulations and lower taxes, while fending off foreign competitors and embarking on a “Buy America” building program.
Even before a single presidential vote was cast, American steel makers had been buoyed last year by record automotive sales and a series of penalties slapped on foreign producers like China for illegally dumping subsidized steel in the United States. “We expect our sheet and plate steel mills will benefit from trade actions taken over the last year,” said John Ferriola, Nucor’s chief executive.
Mr. Ferriola, one of the business leaders who met with Mr. Trump at the White House in February to discuss American manufacturing, is looking for further improvements. “We believe our full year 2017 could significantly exceed the level achieved for 2016,” he said, noting that “imports and inventories are down.”
Through the years, American producers’ main grievance has been that China treats its highly subsidized steel industry as a giant government jobs programs. The plants are paid to churn out steel — regardless of demand. The result is excess capacity, some of which China tries to ease by selling steel on the world market at Groupon-like discount prices.
Last month, Mr. Trump reaffirmed his resolve to crack down on dumping and investigate whether foreign-made steel endangered United States security. He also championed the use of domestic steel, promising to pursue an infrastructure plan under which “new ships, bridges, tunnels and airplanes will be constructed with American hands, American steel and, yes, American tools.”
Mr. Trump’s attention to trade and manufacturing — which helped him gain the White House — means more here than any of the stumbles and missteps that feed late-night television comics. At this Berkeley County mill, neither the administration’s backtracking on a promise to use American-made steel in the Keystone XL Pipeline or its messy battles with congressional Republicans and low approval ratings have damped optimism about the president or his agenda.
“My confidence hasn’t been shaken at all,” said Mr. St. Amand, 37, who moved from Kentucky 16 years ago to take an entry-level job at Nucor as a packager. “Trump is good for business,” he said, repeating a sentiment expressed by 20 other employees interviewed — including a handful who voted for his opponent. (Mr. Trump won 56 percent of the county’s votes, to Hillary Clinton’s 39 percent.)
Jeffrey Goude, 29, nicknamed Strawberry for the curly red beard and hair that peeks out of his green hard hat, agreed. “All of them get criticism,” he said of politicians. “Trump is No. 1 for this industry. He’s trying to make America great again.”
That phrase not only echoes Mr. Trump’s campaign slogan, but also the title of a 2015 book by Nucor’s former chief executive, Dan DiMicco, who was a senior economic adviser during the campaign and a member of the president’s trade transition team. In the book, “American Made: Why Making Things Will Return Us to Greatness,” Mr. DiMicco argues that trade policies and the reluctance to impose punishing tariffs have cost the United States millions of manufacturing jobs.
With more than 200 facilities and $16 billion in sales last year, Nucor is well positioned to take advantage of an upswing in domestic demand. The company uses advanced technology to turn scrap metal into skyscraper-worthy support beams, paper-thin water heater linings and delicate sheets that can be molded into Christmas ornaments and fishing lures.
“We’re very flexible,” said Giff Daughtridge, the Huger plant’s general manager and vice president. “We can take cold scrap and turn it into product very quickly.”
The fiery showers of orange sparks, mammoth tipping buckets and pounding rollers are roaring round the clock here, staffed by four rotating teams that work 12-hour shifts.
“It’s hot; it’s dirty. It’s hard work,” said Leigh Kemp, 48, who switched from an office job to the plant floor tending a ladle metallurgy furnace two decades ago. “But you make good money.”
The plant employs 940 workers, yet most of the acreage is occupied by highly automated machinery rather than people.
Chris St. Amand, left, and his boss, Stephen Slesinski, monitoring the galvinization process. Mr. St. Amand said, “Trump is good for business,” a sentiment many of his co-workers share.
If trade policies have eaten away at steel industry jobs, so have technological advances like Nucor’s electric arc furnaces, which recycle existing iron and steel instead of making it from scratch. The old-style blast-furnace steel plants that resembled volcanic Mordor from “The Lord of the Rings” and employed legions of boilermakers, electricians, steamfitters and more are on the decline in the United States.
In the 1980s, for example, making a finished ton of steel required about 10 human-hours of work. Now the Huger plant can make that same ton from recycled material in 0.4 human-hours, said Mr. Daughtridge, who has worked for Nucor for 33 years.
The jobs that do exist are coveted. Workers stay one, two and three decades with the company while encouraging family and friends to join them.
There is no union at Nucor, not in this anti-union state or any other where the Charlotte-based manufacturer has a plant. But good benefits and pay-for-performance bonuses that have raised the average salary to $80,000 in a good year inspire loyalty. (Nucor did not release specific information about the wage scale.)
In lean times, pay can fall by a third, but the job remains. A no-layoff tradition, even during the Great Recession, means Nucor can keep trained workers who are ready to stoke up when demand picks up.
That approach has enabled company workers in Berkeley and elsewhere to hold onto a prize that has slipped away from millions of blue-collar employees throughout America: a middle-class lifestyle that is both stable and secure.
An employee managing the electric arc furnace from inside the control room at Nucor.
“The steel industry always had its ups and downs,” said Nina Jones, a 19-year veteran at the plant who inspects the zinc-coated steel after it hardens. Her father worked in the industry, as does her brother, she said.
Yet if Nucor’s strategy is admired by many, few other corporations mimic it, often because of relentless pressure from Wall Street to whittle down labor costs in order to post bigger earnings.
When the recession hit in 2008, “the board of directors thought we had lost our minds” for not cutting staff, Mr. Daughtridge said. “But we spend a lot of time, money and effort hiring and training,” he explained, detailing a process that takes 12 to 18 months, includes strict alcohol and drug testing, and involves as many as seven interviews and vetting by a psychologist. Keeping those workers saves money in the long run, he said: “We have the highest wages and the lowest cost per ton.”
Business cycles are familiar to longtime employees. “The steel industry always had its ups and downs,” said Nina Jones, 62, a 19-year veteran at the plant who inspects the shiny zinc-coated steel after it hardens. Ms. Jones, who wears gray-and-blue Kevlar gloves and steel-toed boots that had to be specially ordered in a small size for her, said that her father worked in the industry and her brother works the same shift schedule at Nucor that she does. The ceaseless and conflicting reports coming out of Washington, more than 500 miles away, have left her weary of politics, but cautiously optimistic about the industry’s prospects.
“I want to stay positive and hope manufacturing will come back,” she said. “I’m waiting and seeing.”
Certainly, the type of divisions over budget deficits and program cuts that have shadowed the Republicans’ health care bill could also interfere with policies the steel industry is counting on — corporate tax cuts, tougher enforcement of trade rules and an expensive infrastructure bill. At the same time, uncertainty about the future may slow overall growth.
Still, for all the contention that has dogged Mr. Trump since the election, Mr. Daughtridge said that none of the suppliers and workers that he regularly spoke with were having second thoughts about voting for him. “I don’t hear any buyer’s remorse from them,” he said.