The Renaissance of American Steel : Lessons for Managers in Competitive Industries

By the end of the 1980s, the once mighty U.S. steel industry seemed on its last legs. More than a quarter of a million jobs had been lost, and communities like Pittsburgh and Bethlehem were devastated. Yet today, the industry again stands as a world-class competitor. In The Renaissance of American Steel , Roger Ahlbrandt, Richard Fruehan, and Frank Giarratani illuminate the forces behind this remarkable comeback, drawing valuable lessons for managers not only in the steel business but in any business now battling the global marketplace. Citing evidence from a wide range of companies in the U.S., the U.K., and Japan, and clearly explaining the basics of steel production, the authors show how the industry's rebirth resulted both from the downsizing of big companies and the rise of minimills capturing markets from the larger companies. They describe how large, traditional firms—including U.S. Steel, British Steel, and Nippon Steel—recognized that they had to reduce the scope of their operations and reorganize to become more competitive. U.S. Steel CEO Tom Graham, for instance, closed plants and refocused the firm's resources on the market for flat-rolled products. The book also examines how minimills—such as Nucor, Birmingham Steel, Oregon Steel, Tokyo Steel, and Co-Steel Sheerness—have redefined the industry's structure and competitive dynamics. Nucor, in particular, has emerged as the leader among the minimills—the largest electric furnace-based steel company in the U.S., with annual sales exceeding $3 billion. The reader learns how CEO Ken Iverson, recognizing the opportunities to be seized if Nucor moved beyond traditional products (such as steel joists and rebar), created the most innovative steel mill in the world, with a consistent record of investing in new technologies to lower operating costs and to move into sophisticated, value-added products. Throughout the book, the authors offer sharp insights into the steel industry in the U.S. and abroad—but more important, they highlight the lessons to be learned for managers in all industries. The authors conclude, for instance, that success for both large and small steel producers depends on a critical interplay of factors that touch on leadership, new technologies, and decentralized management. Effective leaders, the authors find, don't micromanage; they set a goal for the company and communicate it broadly to gain employees' commitment. High-performing companies aggressively seek technical know-how, even if it means purchasing it from foreign competitors or securing joint agreements. And finally, successful companies decentralize, empowering employees far down in the organization to handle daily decisionmaking. This in-depth analysis of a radically changed industry speaks volumes about the value of flexibility in business. It is an essential resource for any manager working in today's global economy. Booknews The authors describe the leadership strategies that led to the revival of this once-doomed industry, providing examples of specific management techniques through interviews with successful leaders in the steel industry and case histories of companies that made a comeback. Annotation c. by Book News, Inc., Portland, Or. By the end of the 1980s, the once mighty U.S. steel industry seemed on its last legs. More than a quarter of a million jobs had been lost, and communities like Pittsburgh and Bethlehem were devastated. Yet today, the industry again stands as a world-class competitor. In The Renaissance of American Steel, Roger Ahlbrandt, Richard Fruehan, and Frank Giarratani illuminate the forces behind this remarkable comeback, drawing valuable lessons for managers not only in the steel business but in any business now battling the global marketplace.Citing evidence from a wide range of companies in the U.S., the U.K., and Japan, and clearly explaining the basics of steel production, the authors show how the industry's rebirth resulted both from the downsizing of big companies and the rise of minimills capturing markets from the larger companies. They describe how large, traditional firms--including U.S. Steel, British Steel, and Nippon Steel--recognized that they had to reduce the scope of their operations and reorganize to become more competitive. U.S. Steel CEO Tom Graham, for instance, closed plants and refocused the firm's resources on the market for flat-rolled products. The book also examines how minimills--such as Nucor, Birmingham Steel, Oregon Steel, Tokyo Steel, and Co-Steel Sheerness--have redefined the industry's structure and competitive dynamics. Nucor, in particular, has emerged as the leader among the minimills--the largest electric furnace-based steel company in the U.S., with annual sales exceeding $3 billion. The reader learns how CEO Ken Iverson, recognizing the opportunities to be seized if Nucor moved beyond traditional products (such as steel joists and rebar), created the most innovative steel mill in the world, with a consistent record of investing in new technologies to lower operating costs and to move into sophisticated, value-added products. Throughout the book, the authors offer sharp insights into the steel industry in the U.S. and abroad--but more important, they highlight the lessons to be learned for managers in all industries. The authors conclude, for instance, that success for both large and small steel producers depends on a critical interplay of factors that touch on leadership, new technologies, and decentralized management. Effective leaders, the authors find, don't micromanage; they set a goal for the company and communicate it broadly to gain employees' commitment. High-performing companies aggressively seek technical know-how, even if it means purchasing it from foreign competitors or securing joint agreements. And finally, successful companies decentralize, empowering employees far down in the organization to handle daily decisionmaking.This in-depth analysis of a radically changed industry speaks volumes about the value of flexibility in business. It is an essential resource for any manager working in today's global economy. Contents......Page 14 Preface......Page 8 Acknowledgments......Page 10 1. Introduction......Page 18 Dramatic Change......Page 20 The Basis for Competitive Gains......Page 21 Summing Up......Page 25 2. An Overview of Industry Change......Page 27 The American Steel Crisis......Page 29 The Steel Crisis in Europe and European Politics......Page 34 Japanese Competitive Advantage......Page 37 Capacity Change in the U.S. Steel Industry......Page 39 Measures of Gain......Page 41 Summing Up......Page 42 3. Elements of Competitiveness......Page 44 Understanding Basic Product Lines......Page 45 Risk in Choosing a Market......Page 46 Restraining the Competition......Page 47 Technological Advantage and Steelmaking Processes......Page 48 Steel Plant Characteristics......Page 55 Summing Up......Page 57 4. Market Focus and Strategic Success......Page 58 Common Ground......Page 59 Defining Markets......Page 60 Strategic Market Focus: Nucor Corporation......Page 64 Strategic Market Focus: United States Steel......Page 70 The Market Contest Today......Page 75 Summing Up......Page 76 Goals Must Be Held in Common......Page 78 Keys to Successful Leadership: Drawing on Graham's Experience......Page 80 Keys to Successful Leadership: Drawing on the Minimill Experience......Page 84 Accountability and Reward for Performance......Page 88 Risk Taking......Page 91 Continuous Improvement......Page 93 Summing Up......Page 95 Gains in Productivity and Quality......Page 97 Benchmarking Technology and Efficiency......Page 98 Change in Technology and Change in the Workplace......Page 102 Complements in Production......Page 104 Human Resource and Organization Practices......Page 105 Culture and Exceptional Performance......Page 110 Communication is Key......Page 113 Summing Up......Page 114 7. Regaining Competitiveness in the United Kingdom......Page 115 Restructuring in the Integrated Sector......Page 116 The Transformation of a Minimill......Page 123 Summing Up......Page 128 8 Sustaining Competitiveness in Japan......Page 130 The Context for Japanese Restructuring......Page 131 Unprecedented Change in Japan's Integrated Sector......Page 134 Competition from Minimills......Page 138 Kaizen: A Built-in Competitive Edge......Page 141 Summing Up......Page 144 9. Converging Technologies......Page 145 Technology Drivers......Page 146 The Integrated Sector......Page 147 The Minimill Sector......Page 149 A New Margin for Domestic Competition: Specialty Steels......Page 153 Strategies for Technological Development......Page 154 Summing Up......Page 156 The Vanguard of Change......Page 157 Dynamic Advantage......Page 160 The Importance of Competition......Page 162 General Application......Page 164 Notes......Page 168 Selected Bibliography......Page 184 C......Page 188 H......Page 189 M......Page 190 P......Page 191 T......Page 192 W......Page 193