Build plant fast, run it lean, steel titan Correnti advises

John Correnti (center) said he saw from his Nucor days “up there in Blytheville ... the Arkansas can-do attitude.”
John Correnti (center) said he saw from his Nucor days “up there in Blytheville ... the Arkansas can-do attitude.”

— John Correnti laughed when he was asked if he’s “Johnny Steelmill.” He’s sown about a dozen of the mills during his career.

His latest plant would be at Osceola, down the road from Blytheville, which he’s called home since the mid-1980s, when he started the first of two mills for Nucor Corp. in Mississippi County.

“The trick to them is to build them as economically as you can and as quickly as you can. You’re spending money until you start making steel,” Correnti said in a telephone interview Tuesday.

Earlier that day, Gov. Mike Beebe announced at the state Capitol that Correnti and his partners in Big River Steel LLC - with help from the state - hope to build a $1.1 billion mill that will employ 525 with average annual wages of $75,000.

Big River partners include other Arkansans, Correnti said, though he declined to name anyone. On Friday, it was revealed that Wichita, Kan.-based Koch Industries is to be a major investor in the plant. Earlier in the week, the Arkansas Teachers Retirement System said it would invest $60 million in the project.

Correnti found his career niche early in life. He joined U.S. Steel on June 1, 1969, the day after he graduated from college.

Correnti said he “learned how not to run” a company at U.S. Steel. Nevertheless, he started his climb at the company and was put in charge of plant construction.

He joined Nucor in 1980 and succeeded in dramatically reducing the time needed to start up a mill. Eventually, he was made president and chief executive of the Charlotte, N.C.-based corporation, one of the nation’s largest steelmakers.

For the past decade, he has been a venture capitalist.

Correnti is proud to say he was born and raised at Mount Morris, N.Y., 360 miles west of New York City. “Everybody thinks you’re from New York City,” Correnti said.

His hometown’s population in those days was about 1,200, he said.

“That’s where I got this idea about putting these plants in rural areas. I would’ve loved to stay in Mount Morris, but, guess what, there were no jobs there.”

He got a degree in civil engineering at Clarkson College of Technology, now Clarkson University, a small private college in Potsdam, N.Y.

Although he had to move to Pittsburgh for the U.S. Steel job, he never forgot the work ethic of small-town people.

“My job is to put the equipment in the hands of farm boys and farm girls, and give them the opportunity to make a lot of money. There’s not a guarantee, but there’s an opportunity.”

“I saw from my Nucor days up there in Blytheville ... the Arkansas can-do attitude. It’s got to be somebody with a good work ethic who doesn’t mind working hard and making sacrifices.”

Correnti said Big River Steel’s site search started with a dozen states in the South.

The final four included Mississippi, Alabama, Missouri and Arkansas, he said.

The base wage at the Big River plant will probably be between $18 and $26 an hour, he said. “Where you really make your money is on incentive pay, which is based,” he said, emphasizing each of the following words, on: “quality ... tons ... produced ... every... single ... week.”

A paycheck for what will be the standard workweek means gross pay of about $1,000, Correnti said, plus the bonus pay could be nearly that much, he said.

However, if there’s an ice storm, for example, and the power goes out and no tonnage is produced, there’s no bonus, he said.

“If you make steel, it’s to everybody’s credit. If you don’t make steel, it’s to everybody’s discredit.” That promotes teamwork, he said.

He says he hires five to do the work of 10 and pays them what seven or eight workers would make.

Here’s a Correnti ratio: “It’s one chief for 20 indians, not 200 chiefs for 200 indians.”

When he joined Nucor, he oversaw the building and initial operation of two plants in Utah before he moved to Mississippi County in Arkansas in 1985 to build a structural steel plant in conjunction with Yamato Kogyo Co., to be followed by work at the rolled steel Nucor plant in 1992.

He decided Mississippi County was not only a good place to make steel, it was a good place to live.

Correnti, now 65, and his wife, Dawn, built a house in 1987 near Blytheville. Although he travels a lot, he spends about 70 percent of his time in the Blytheville home, he says. He spends about 20 percent of his time in Charlotte and the rest at Pickwick Lake in southwest Tennessee where he and his wife live off and on aboard a 40-foot cabin cruiser.

In 1995, Business Week called Correnti the “mini-mill king” because of his strategy of building and operating lean,allowing Nucor to outmaneuver its “burly competitors,” including U.S. Steel and Bethlehem Steel, the latter of which filed for bankruptcy in 2001 and sold off its assets.

In the sometimes rough and-tumble world of the corporate boardroom, he and his Nucor mentor Ken Iverson were ousted in 1999 after a dispute with David Aycock, who had lost out to Correnti for the top management spot years before.

Correnti soon thereafter led a successful proxy fight and persuaded shareholders to oust Birmingham Steel’s management, allowing Correnti to take over the troubled company, which was bought by Nucor in 2002.

Since then, he has headed ventures that included construction of a steel mill in Lowndes County in Mississippi. That mill began operating in 2007 before it was sold to a Russian company, Severstal.

Arkansas had been in the running for that $650 million project, which promised 450 jobs.

It now employs 550. Severstal pays each worker an average of $80,000 a year and has doubled the plant’s production capacity - exceeding what was promised by Correnti and his partners - according to Joe Max Higgins, chief executive of the Golden Triangle Development Link, a group of businesses that promotes the Columbus-Starkville-West Point area in Mississippi.

Higgins acknowledged the benefit to the community that Correnti and Correnti’s Global Principal Partners LLC made by building the mill at Columbus.

But, Higgins and Correnti had a falling out over a subsequent project called Silicor, which was to make silicon metal for use in electronics.

Higgins said Global Principal Partners dragged its feet on closing the Silicor deal, so he asked the company for $150,000 to be put in escrow, then another $50,000. That was after the county and others had spent about $230,000 on tests, surveys and other work on two possible sites for the Silicor project, according to Higgins.

Global Principal Partners rejected the escrow request, and the project stalled. In last week’s interview, Correnti called the escrow request “overreaching.”

He said there is no connection, other than himself, between Global Principal Partners and Big River Steel LLC.

Mississippi had gotten behind the Silicor project. The Mississippi Legislature set aside $75.25 million in incentives for it in a September 2011 special session.

Those incentives are still available for the project, if it gets off the ground and is located somewhere in Mississippi, Brent Christensen, executive director of the Mississippi Development Authority, said in an e-mail Thursday.

The development authority “will continue to work with Mississippi Silicon and Silicor Materials ... to secure a location for them in our state,” Christensen said.

Mississippi state Sen. Terry Brown, R-Columbus, said:“From what I understand, the local officials got upset when [the deal] didn’t close when it was supposed to close. But the markets nationally have a lot to do with that.”

Correnti’s “track record with the state of Mississippi is good” because of the Severstal plant, which Brown described as “a major success.”

“He’s an entrepreneur. And everything you try doesn’t always come together. I think the silicon metal thing is definitely alive.

“I want to congratulate Arkansas for being able to get the big steel mill. Our incentive package was as good or maybe a little better than Arkansas’. The only problem was that we couldn’t get a [competitive] power rate through TVA [Tennessee Valley Authority]. Entergy Arkansas did a better power rate.”

Of the Big River mill, Brown said: “the construction and the spinoffs [will be] just tremendous.”

Correnti said in the interview that the Silicor project is “absolutely alive” and will probably be built in Mississippi, just not in Lowndes County.

The escrow money that Higgins sought is “small change” in the world of projects in the hundreds of millions of dollars, Correnti said, adding that what Higgins was seeking would’ve been a bad precedent, and “there are probably 50,000 other locations I could go to that wouldn’t do that.”

Higgins said, “I’ll tell you straight up that I don’t like the S.O.B. But I will also tell you straight up that he’s a complex character. People who do work for him will fall on a sword for him.”

Correnti has been a nonmanagement member of the board of directors of Navistar International Corp., maker of commercial trucks, since 1994.

He’s the longest-tenured board member, said chief executive Lewis Campbell, who in August replaced Daniel Ustian, who retired under pressure.

“I’ve always admired a self made man. And he is one,” Campbell said.

Higgins said people who work for Correnti are loyal, noting that “probably 50 or 75 families” who worked for him in Mississippi County “picked up and followed him to Lowndes County to work for him.”

Front Section, Pages 1 on 02/03/2013

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