National Steel Corporation
Encyclopedia
The National Steel Corporation (1929–2003) was a major American
steel producer. It was founded in 1929 through a merger arranged by Weirton Steel with some properties of the Great Lakes Steel Corporation and M.A. Hanna Company. Despite a difficult market in Depression
-setting 1930, the company reported USD 8.4 million
in profits. Again, in 1931 the company was profitable unlike many other competitors. The company could attribute its success primarily to sales to the automobile industry. Large steel producing operations were located near Detroit
, providing the company with low shipping costs. Throughout the Great Depression, National Steel obtained profitability every year.
The post-World War II
years brought about record profits for the company as steel was in high demand. The company continued to post healthy profits in the 70s, although the latter half of the decade saw some sharp and turbulent profit slumps. The increasing consumption of foreign-imported steel was often an attributed problem. United Financial, a savings and loan, was acquired in 1979, adding another sundry item for its portfolio.
Beginning in 1980, the company reported a serious loss of demand and with it profits in its core steel business. A roller coaster earnings surge the next year crashed down the year after that due to a further increase in imports and low demand. In 1983, shareholders agreed to create National Intergroup, a holding company, and merge the steel business as one many units into it. The corporate reorganization was a further step to an already initiated arrangement that started in 1982, which broke the company into six independently managed units. The move was intended to better administer the company which had become diversified away from steel into aluminum and financial services
. That same year, the workers of the Weirton mill purchased their operation from National Steel, forming an independent employee-owned corporation
.
In February 1984, Nippon Kokan K.K., a major Japan
ese steel producer, acquired 50% of National Steel from National Intergroup for USD 292 million. Later in 1990, the Japanese firm would claim another 20% share from National Intergroup, which was eager to sell the steel business. The company stumbled through troubled years as it shed thousands of workers and stared down bankruptcy in 1991.
In 1994 the company caused a stir in the industry by terminating nearly all of its vice presidents, as well as its President and CFO, and replaced them by hiring nearly the complete executive staff of the US Steel Gary Works, including V. John Goodwin who was named the new President of National Steel. US Steel was incensed and filed a lawsuit which was settled out of court. However these drastic leadership changes were short-lived, as by 1996 Goodwin was gone, the result of a bitter dispute with the Japanese ownership. By 1998 nearly all of the US expatriates had jumped ship.
The darkest days of National's management history occurred in 2000, when an internal auditor, tipped off by an informer, discovered that longtime executive James Squires was receiving millions of dollars in kickbacks from scrap suppliers. This was an especially painful event for the company because Squires had been hailed as a "self made man" who had advanced from a mill laborer to a Senior Vice President over the course of his 42 year career, and had professed to be the pinnacle of financial stewardship. Nevertheless in August 2001, Squires was convicted in Federal Court of receiving kickbacks, and in 2002 was sentenced to two years imprisonment. Later he was forced to pay National approximately $3,000,000 in a civil law suit. In his allocution at sentencing, Squires noted, apologetically, that he had taken the improper payments because the company was promoting "Harvard MBA's" more rapidly than it was promoting him. However the company, in fact, had no Harvard MBA's in its employ.
The company then lumbered along for the next few years, hampered by doddering executive management. Bankruptcy was then filed in 2002, the result of a deep depression in the industry at the time combined with the laggard leadership.
The company would never enjoy extended periods of profit. Finally in March 2002, the company filed for bankruptcy with only $2.3 billion in assets for $2.6 billion in debt. After a bidding war between AK Steel and US Steel, in May 2003 the remains of National Steel were sold to US Steel for USD 850 million and the assumption of USD 200 million in debt. US Steel continues to operate National's Keewatin mining operation and pellet plant under the new name of Keewatin Taconite or Keetac.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
steel producer. It was founded in 1929 through a merger arranged by Weirton Steel with some properties of the Great Lakes Steel Corporation and M.A. Hanna Company. Despite a difficult market in Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
-setting 1930, the company reported USD 8.4 million
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
in profits. Again, in 1931 the company was profitable unlike many other competitors. The company could attribute its success primarily to sales to the automobile industry. Large steel producing operations were located near Detroit
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...
, providing the company with low shipping costs. Throughout the Great Depression, National Steel obtained profitability every year.
The post-World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
years brought about record profits for the company as steel was in high demand. The company continued to post healthy profits in the 70s, although the latter half of the decade saw some sharp and turbulent profit slumps. The increasing consumption of foreign-imported steel was often an attributed problem. United Financial, a savings and loan, was acquired in 1979, adding another sundry item for its portfolio.
Beginning in 1980, the company reported a serious loss of demand and with it profits in its core steel business. A roller coaster earnings surge the next year crashed down the year after that due to a further increase in imports and low demand. In 1983, shareholders agreed to create National Intergroup, a holding company, and merge the steel business as one many units into it. The corporate reorganization was a further step to an already initiated arrangement that started in 1982, which broke the company into six independently managed units. The move was intended to better administer the company which had become diversified away from steel into aluminum and financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
. That same year, the workers of the Weirton mill purchased their operation from National Steel, forming an independent employee-owned corporation
Employee-owned corporation
An employee share ownership plan is the practice of companies giving staff members shares in their company as part of their salary....
.
In February 1984, Nippon Kokan K.K., a major Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese steel producer, acquired 50% of National Steel from National Intergroup for USD 292 million. Later in 1990, the Japanese firm would claim another 20% share from National Intergroup, which was eager to sell the steel business. The company stumbled through troubled years as it shed thousands of workers and stared down bankruptcy in 1991.
In 1994 the company caused a stir in the industry by terminating nearly all of its vice presidents, as well as its President and CFO, and replaced them by hiring nearly the complete executive staff of the US Steel Gary Works, including V. John Goodwin who was named the new President of National Steel. US Steel was incensed and filed a lawsuit which was settled out of court. However these drastic leadership changes were short-lived, as by 1996 Goodwin was gone, the result of a bitter dispute with the Japanese ownership. By 1998 nearly all of the US expatriates had jumped ship.
The darkest days of National's management history occurred in 2000, when an internal auditor, tipped off by an informer, discovered that longtime executive James Squires was receiving millions of dollars in kickbacks from scrap suppliers. This was an especially painful event for the company because Squires had been hailed as a "self made man" who had advanced from a mill laborer to a Senior Vice President over the course of his 42 year career, and had professed to be the pinnacle of financial stewardship. Nevertheless in August 2001, Squires was convicted in Federal Court of receiving kickbacks, and in 2002 was sentenced to two years imprisonment. Later he was forced to pay National approximately $3,000,000 in a civil law suit. In his allocution at sentencing, Squires noted, apologetically, that he had taken the improper payments because the company was promoting "Harvard MBA's" more rapidly than it was promoting him. However the company, in fact, had no Harvard MBA's in its employ.
The company then lumbered along for the next few years, hampered by doddering executive management. Bankruptcy was then filed in 2002, the result of a deep depression in the industry at the time combined with the laggard leadership.
The company would never enjoy extended periods of profit. Finally in March 2002, the company filed for bankruptcy with only $2.3 billion in assets for $2.6 billion in debt. After a bidding war between AK Steel and US Steel, in May 2003 the remains of National Steel were sold to US Steel for USD 850 million and the assumption of USD 200 million in debt. US Steel continues to operate National's Keewatin mining operation and pellet plant under the new name of Keewatin Taconite or Keetac.
External links
- National Steel webpage (archive) - A July 24, 2004 Internet ArchiveInternet ArchiveThe Internet Archive is a non-profit digital library with the stated mission of "universal access to all knowledge". It offers permanent storage and access to collections of digitized materials, including websites, music, moving images, and nearly 3 million public domain books. The Internet Archive...
cache of the site which no longer remains