Nucor Corporation (A)
We are a cyclical business.
.. Basically when you are at the peak of the
cycle—times are good, interest rates are low, people are building—our
margins increase. When we go to the trough, of course, the margins are
squeezed. But over the last 25 years Nucor has never had a losing quarter.
Not only a losing quarter, we have never had a losing month or a losing
—John D. Correnti, President and CEO, Nucor
In 1998, Nucor was a Fortune 500 company with 6,900 employees and had sales of $4.3
billion in steel and steel-related products. Its chairman, F. Kenneth Iverson, had headed
the company for more than 30 years. During his tenure, the steel industry faced a number
of problems, including foreign competition, strained labor relations, and slowed demand
for steel (related in part to the substitution of alternative materials). Despite these industry
challenges, Nucor’s sales during Iverson’s tenure grew at an annual compound rate of
about 17 percent per annum. Selected comparative financial data are shown in Exhibit 1.
In different years, both Iverson and Nucor CEO John Correnti were named Steelmaker of
the Year by
Nucor traced its origins to auto manufacturer Ransom E. Olds, who founded Oldsmobile
and, later, Reo Motor Cars. Through a series of transactions, the company Olds founded
eventually became the Nuclear Corporation of America, a company involved in the
nuclear instrument and electronics business in the 1950’s and early 1960’s.
The firm suffered several money-losing years, and in 1965, facing bankruptcy,
installed 39-year-old Ken Iverson as president.
Richard Franklin, “An Interview with John D. Correnti, President and CEO, Nucor Corporation,”
The Wall Street Corporate
, September 9-15, 1996, pp. 19-20.
This case was prepared by Vijay Govindarajan of the Tuck School of Business at Dartmouth.
The cooperation and help
provided by F. Kenneth Iverson, Chairman, Nucor Corporation in preparing this case study is greatly appreciated. It was
written for class discussion and not to illustrate effective or ineffective management practices.
© 2000 Trustees of Dartmouth College. All rights reserved.
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