Nucor foresees job shifts if mill built
Posted: March 23, 2013 at 2:55 a.m.
If Big River Steel LLC builds a $1.1 billion steel mill near Osceola, nearby Nucor Corp. would face deciding whether to transfer some of its Arkansas employees out of state, Charlotte, N.C.-based Nucor says in a 20-page document prepared for Arkansas legislators.
Nucor operates two steel mills near Blytheville in Mississippi County - Nucor Steel Arkansas and Nucor-Yamato, a joint venture with Japanese company Yamato Kogyo Corp.
If the Big River plant is built, “Nucor will seek to maximize profitability in order to insure our long-term existence,” Nucor says in the document for members of the General Assembly. Legislators are considering offering a $125 million bond issue andother incentives to Big River.
Nucor has circulated the document as the state Senate and House of Representatives have commissioned their own analyses on the viability of the proposed Big River Steel plant.
One made public Thursday said an Arkansas Economic Development Commission’s study had overstated the positive economic impact of the plant. The second, released Friday, stated that the incentives are “relatively low compared with the economic benefits.”
There will be an informal joint House and Senate committee meeting Monday to discuss the Big River mill. The process of filing a bill on the mill incentives and getting it through committee and floor votes in both the House and Senate may last until late in the session, which is scheduled to conclude April 19, Speaker of the House Davy Carter, R-Cabot, said.
If the cost to produce steel in Arkansas reduces the profitability of the Nucor plants in the state, the company would have to divert jobs to other Nucor facilities, the company says in the document.
“While Nucor is opposed to laying off teammates, we are not opposed to transfer-ring them to our other sheet mills in Crawfordsville, Ind.; Decatur, Ala.; or Berkeley, S.C.,” Nucor says.
Phone calls seeking further comment were left with Nucor executives in Mississippi County and in Charlotte, N.C., but were not returned.
John Correnti, Big River’s chairman and chief executive officer, discounted Nucor’s threat.
Correnti, a former chief executive at Nucor who led Nucor’s construction of the Arkansas mills, said Nucor’s operations in Indiana, Alabama and South Carolina are not as geographically favorable as the Arkansas plants.
“[Nucor] is throwing up everything they can against the wall and seeing what sticks,” Correnti said.
The situation with Nucor and Big River is no different from other states approvingthe construction of additional auto plants, Correnti said.
“Did Mississippi discard the Toyota plant [near Tupelo] because Nissan was already making cars in Jackson?” Correnti asked. “Did the state of Alabama ditch Hyundai because Mercedes-Benz and Honda were already producing cars in Alabama? Did Georgia say ‘No’ to Kia because Ford was already in Atlanta? It’s competition and it’s capitalism.”
This is Correnti’s second effort at putting a steel mill in Arkansas. In 2005, he planned to build a steel mill at the same site near Osceola. Correnti had said he wanted the plant built at the site and wasn’t seriously considering another location.The plant was “Arkansas’ to lose,” Correnti said at the time.
“At the last minute, for whatever reason, things fell apart with Entergy [with an electric package],” Correnti said this week.
And Nucor “scared” Arkansas from offering incentives to Correnti, he said.
Clif Chitwood, director of economic development in Mississippi County, recalls that Arkansas had made certain commitments to Correnti initially that were later withdrawn.
“Mr. Correnti did not receive the support he was expecting” from the state, Chitwood said Friday. “But Haley Barbour [Mississippi’s governor at the time] was more than happy to take the plant. That mill is now in Columbus, Miss., and employs 700 to 900 people, depending on the flux of the market.”
The Mississippi plant opened as SeverCorr Corp. in 2007. A part owner of the plant, Russian steel firm Severstal, later took its option and bought out Correnti. The plant is now known as Severstal Columbus LLC.
Sen. David Sanders, R-Little Rock, who is familiar with the Nucor report, said Arkansas’ senators have kept an open mind about the Big River project.
“For my taste, it has to makesense both in the short term and the long term,” Sanders said. “What I will try to do is gauge the project through the analyses that the Legislature authorizes. We need to let them present their findings.”
Carter said he hasn’t seen the Nucor document.
“We’ve heard some of those same concerns verbally [from Nucor],” Carter said after hearing some of Nucor’s remarks. “Nucor is a good corporate citizen. The bottom line is, of course, we’re listening to all concerns.”
Business, Pages 29 on 03/23/2013