This is the riveting story of a company that dared to develop a revolutionary method of steel-production, which the rest of the industry had dismissed as too risky.
It is the absorbing story of the “hot metal men” who work passionately at making steel. (Preston describes a scene with a factory hand: “I was terrified he would burn himself. The hoses blew apart again and he got hydraulic fluid in his eyes. We took him down to wash his eyes out, and he turned to me and said, ‘This is the best job I ever had!'” ) But above all it is the inspiring story of Nucor Corporation’s guiding force: its engineer/ metallurgist/ chief executive officer/chairman of the board, F. Kenneth Iverson.
Iverson is an industrial genius. He is probably the closest real-life example to the character Hank Rearden in Atlas Shrugged. Though not as philosophical as Rearden, Iverson conducts his business in the same purposeful, creative, hands-on manner. He eschews corporate bureaucracy, loathes management by committee (C We don’t need any group vice presidents!” says this head of a Fortune 500 company. “All they do is get in the way! Because you have to include them in decisions!”), resists—with the full support of his factory workers—the infiltration of unions with their deleterious work rules, rejects the arguments for government protection or subsidization of the industry—and loves producing steel. And he does it superbly.
It was Iverson who came up with the idea that Nucor should make steel, not from scratch in blast furnaces, but from used steel—from scrap metal melted in an electric arc furnace in a miniature steel mill—at a cost of $6 million, instead of $200 million. These “mini-mills,” of which Nucor now has 22, are the most efficient plants in the United States.
But this was just a prelude to Iverson’s major venture: the quest for a method of producing a continuous, unbroken strip of steel. Steelmakers had been trying to do this for over a century, to no avail—until Iverson came along. “Any company that could solve the problem,” Preston says, “would by definition become the global leader in the manufacture of steel.” Iverson solved it.
He investigated a continuous casting machine that many steel companies had looked at and turned down. According to Preston: “No one know if it could work, because a thing like Iverson’s machine had never been built before.” But Iverson knew. He knew that he could make the process work, decided to buy the machine—and “handed a quarter of a billion dollars to a bunch of young people and … told them to go build a steel mill that would blow the hair off the world steel industry.” They did.
The new plant—which the “experts” at Bethlehem Steel had predicted could not be constructed for less than $400 million, and would provide no competitive 21 advantage to Nucor—-was completed at a cost of $275 million, and now enjoys a labor-efficiency rate six times that of the Japanese steel industry.
Ken Iverson is a throwback to the industrialists of the nineteenth century supremely confident, bursting with energy and ideas, asking nothing of the world but to stay out of his way, defying public opinion and relying solely on the judgment of his own mind, You will find yourself cheering the efforts of this innovative individual and his maverick company as they overturn and revitalize an entire industry.
This review is made available by the Ayn Rand Bookstore (formerly Second Renaissance Books)
