In late December, Nucor
As a result, we collected the questions asked of Dan during the time the chat was opened, as well as those sent via email to email@example.com. In Part 1 of the Q-and-A, we covered questions specific to Nucor and its business. Here in a lightly edited Part 2, Dan fields questions about the steel industry, competitors, and his outlook for the economy.
Question: What steel company do you have the most competitive respect for: ArcelorMittal
Dan DiMicco: We respect all of our competitors -- and the ones you mentioned are certainly all very strong competitors. Beyond that, it would not be appropriate for us to comment further on our competitors.
Question: What's the biggest misconception about the steel industry?
DiMicco: That it is a "smokestack industry" that has changed very little over the decades. The amount of technological innovation over the years is quite simply amazing and Nucor has by far led the way! If you go into one of our steel mills today, you will probably be surprised to see how much less labor intensive things are today compared to the images people have from earlier years. Technological innovation -- along with abundant natural resources -- position Nucor and America to be very competitive in global steel markets. That is why it is so important to get the trade distortions fixed. The mercantilism/predatory/protectionist trading behavior by our trading competitors has trumped free trade because we have refused to enforce the rules and obligations of free trade and open markets.
Question: Do you see a consolidation in the U.S. steel industry?
DiMicco: There is likely to be further consolidation both in the U.S. and internationally. It is difficult -- if not impossible -- to make any predictions as to where and when.
Question: How do you differentiate Nucor from the Chinese firms that seem to have implicit support of their government?
DiMicco: Very simply, our company thrives on true competition -- competition driven by real economic efficiencies and innovation. With real free trade -- free of any distortions resulting from government subsidies or other unfair/illegal trade practices -- companies like Nucor prosper and grow, as do our customers and other consumers of steel. We play by the rules and treat our people the way we would want to be treated -- and pay them well!
Question: As you look forward in the steel sector, do you see companies looking to secure upstream supply to control costs or will they look to downstream?
DiMicco: We are likely to see steel producers grow both places -- upstream and downstream.
Question: In June 2009, you shared your projection for the "granddaddy of all jobless recoveries." What's your outlook for the economy now?
DiMicco: The economy is not going to enjoy sustainable and meaningful growth until we attack the structural imbalances --- and little has been achieved yet on those challenges and hence there has been no -- zero -- nada job creation!
Question: You've said that we need to get back to being a nation that makes and builds things. How do we do that?
DiMicco: We need to implement sound economic policies that attack the structural imbalances that are devastating our economy and our manufacturing base. Those imbalances are the trade deficit, budget deficit, lack of energy independence, and a crumbling physical infrastructure. Our country must -- (1) demand that our trading partners play by the mutually agreed upon WTO-based rules and favored nations trading status rules of free and fair trade; (2) allow responsible energy producers to fully develop our nation's abundant energy reserves that are currently off limits or under attack due to irrational environmental concerns; (3) rebuild our physical infrastructure such as roads, bridges, water/sewer, electrical transmission, etc. as a matter of safety, productivity, and overall global competitiveness concerns; (4) eliminate excessive and unproductive regulation and taxation that discourages the creation of jobs, savings, and wealth that raises the standard of living for all Americans. We absolutely need our government to facilitate our global success, not continue to undermine it!
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