Nucor in 2005

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Escuela Superior Poltécnica del Litoral

Applied Management

Case 23:

Nucor in 2005

Group three:
Gabriela Aizaga

Marysol Yépez

Diana Zaldúa

Class: 382

BACKGROUND OF THE COMPANY

Nucor can be traced back to the company that manufactured the first Oldsmobile in 1897 and became the Reo Truck Company. As the company declined into bankruptcy in the postwar years, a 1955 mergercreated Nuclear Corp. of America. Following the conglomerate trend of the period, Nuclear acquired various high-tech businesses, such as radiation sensors, semi-conductors, rare earths, and air conditioning equipment.

Ken Iverson had joined the Navy after high school in 1943 and had been transferred from officer training school to Cornell’s Aeronautical Engineering Program. On graduation heselected mechanical engineering/metallurgy for a master’s degree to avoid the long drafting apprenticeship in aeronautical engineering. His college work with an electron microscope earned him a job with International Harvester.

Over the next 10 years, Iverson worked for four small metals companies, gaining technical knowledge and increasing his exposure to other business functions. He enjoyedworking with the presidents of these small companies and admired their ability to achieve outstanding results. In 1962, the firm bought a small joist plant in South Carolina (Vulcraft) that Iverson found, with the condition that he would be in charge of the plant.

Over the next four years Iverson built up the Vulcraft division as Nuclear Corporartion struggled. The president, David Thomas, wasdescribed as a great promoter and salesman but a weak manager. A partner with Bear Stearns actually made a personal loan to the company to keep it going. By 1984 Nucor had six joist plants and four steel mills, all using the new mini-mill technology.

From the beginning, Iverson had the people running the various plants, called divisions, make all the major decisions about how to build and runNucor. The original board was composed of Iverson; Sam Siegel, his financial chief; and Dave Aycock, who had been with the South Carolina joist company before Nuclear acquired it. Siegel had joined Nuclear as an account in 1961. Aycock and Siegel were named vice presidents at the time Iverson was named president.

Dave Aycock had been very impressed with the original owner of Vulcraft, SanbornChase.

Chase, an engineer by training, invented a number of things in diverse fields. He also established the incetive programs for wich Nucor later became known.

In 1984, Aycock became Nucor’s president and chief operating officer, while Iverson became chairman and chief executive officer. Aycock had this to say about Iverson: “Ken was a very good leader, with an entrepreneurial spirit. HE waseasy to work with and had the courage to do things, to take lots of risks. Many things didn’t work, but some worked very well.

Over its second 20 years, Nucor was to rise to become the second – largest U.S. steel company. A number of significant challenges were to be met and overcome to get there, and once that horizon was reached, even greater challenges would arise.

FRAMING

Key Issues✓ Importance of product diversification.

✓ What strategy Nucor should implement to care the environment?

✓ Know the results that the incentives can make in employees productivity.

✓ Know strengths and weaknesses of Nucor.

Flipping and Skimming

✓ 23 Pages

✓ Financial Statements.

✓ Table About The Man Hour (Work)

✓ Appendix about Board OfDirectors And Executive Management.

✓ Biographies Of Selected Board Members And Executive Manager.

Beginning of case

✓ Background Of The Company.

✓ Nucor’s Organization.

▪ Division managers

▪ Vulcraft – the joist divisions

▪ Joist production

▪ Steel divisions

▪ The steelmaking process

✓ Management Philosophy...
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