Among America’s rank and file, nothing prompts deep-in-your-gut fear more than hearing your company’s been sold. But sometimes getting taken over turns out to be a good thing. Really.
In May 1996, UNR Industries Inc. sold its Leavitt structural-tube division to Chase Industries Inc. of Montpelier, Ohio, for $95 million in cash. But instead of sending in cost-cutters, the new owners spent money on capital equipment to break production bottlenecks at steel-tube plants on Chicago’s South Side and in Jackson, Miss.
The bottom line: What is now Leavitt Tube Co. still employs roughly 400 workers and has seen sales grow by double-digit rates, at least twice as fast as the overall market for non-residential construction steel, says Mike Segraves, Chase Industries’ chief financial officer.
Leavitt’s new lease on life is good for Bethlehem Steel Corp., too. Bethlehem’s mill in Burns Harbor, Ind., is Leavitt’s biggest supplier of rolled sheet steel, which it forms into tubes.
UNR, by the way, now is named Rohn Industries Inc. and, after selling all but its telecommunications-tower operations, has moved to Peoria from Chicago.
Gettin’ closer: By mid-March, Steel Dynamics Inc. had planned to have a site for a new electric furnace mini-mill. Now, says the company’s CEO, Keith Busse, the steelmaker’s board hopes to make its choice in mid-April. One reason for the delay: The company is again considering a tract near Morris, Ill., some 55 miles southwest of Chicago.
“Its heart is still beating,” says Busse, an alumnus of Nucor Corp.
Steel Dynamics is looking at Whitley County, Ind., near Ft. Wayne, and a brownfield site– vacant, remediated industrial land–on Toledo’s harbor, he says.
Because of delays in picking a site as well as time that must be spent obtaining permits, Busse says, the new mini-mill probably won’t start production until early 2000. The $250 million plant is already designed, however, and will be able to crank out 750,000 tons of steel beams a year.
The postponement hasn’t slowed things down at Steel Dynamics’ original facility in Butler, Ind., where the company is based. Busse says the mini-mill now is producing 1.3 million tons of flat-rolled steel a year and should top 2 million tons next year.
Double-digit problem: At a price tag of $100 million, “problem” is a pretty mild word to describe Year 2000 computer hassles. That’s how much Amoco Corp. expects its earnings to be hit over three years because of the costs of fixing the computer glitch. In 1998 alone, Amoco says it expects income before taxes to be reduced by $55 million.
The problem is that computer systems are programmed to read only the last two digits of a year, with the built-in assumption that the missing first two digits are “19.” Thus “00” is assumed to be 1900, not 2000. Oops. It’s an annoyance if you’re talking about programming your VCR to record a program while you’re out, but a disaster if you’re talking about computers that crank out bills, compute interest rates or run refining operations.
The good news: $55 million is a lot of money if you’re talking about an individual winning the lottery, but barely an eyebrow-raiser to a huge company like Amoco, whose 1997 net income was $2.7 billion.
It also may be heartening to those of us who struggle to program that darn VCR to know that corporate giants have computer problems, too.
Take that: Analysts are expecting first-quarter earnings at Maytag Corp. to come in around 61 cents a share. The reality will be “much better” than that, says the Newton, Iowa-based appliance-maker.
A key to that rosy outlook is the decision late last year by giant retailer Sears, Roebuck and Co. to sell Maytag appliances at its retail stores. Maytag–whose brands also include Jenn-Air, Magic Chef and Hoover–also has rolled out new appliance models and floor-care products that have sparked consumer interest.
Maytag says its first-quarter sales will be as much as 25 percent higher than last year’s $792.5 million.
Second city: When it comes to factory jobs, metropolitan Chicago has slipped to second, but in this rivalry, Chicago is not slugging it out with nemesis New York; its chief competitor is Los Angeles. According to a study by Los Angeles development officials, the nine-county Chicago area ended last year with 662,200 manufacturing jobs, while the Los Angeles area had 673,600.
Trailing Chicago were metropolitan Detroit with 445,700 factory jobs, and New York with 313,900.
By now, Chicago should be used to being No. 2. L.A. had worn the blue-collar crown until 1994, when Chicago–fleetingly, as it has turned out–passed it by.
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E-mail Sallie Gaines at SGaines@Tribune.com
E-mail Michael Arndt at MArndt@Tribune.com
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