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Rick Blume, General Manager, Commercial for Nucor's Steelmaking Group, delivered the final keynote of the morning plenary session. After a fascinating background on his company that really got to the heart of what drives Nucor's past and future strategy and focus (representative of what more US manufacturers should be pursuing, in our opinion), Blume drove to the core of his recommendations on how to drive manufacturing and a stronger economy in the US. But first, here's a quick summary (in our words) of Nucor's recipe for growth and success:
- Diversification: production sites, facilities, sales (international)
- Raw materials: take a leadership role in the supply chain for buying scrap (integrated strategy back to raw material) and explore materials and energy alternatives
- Empower employees and challenge people: tie pay to contribution and company success (and encourage employee-led innovation)
- Never stop innovating: Treat even the most traditional of industries (e.g., steel) as one that is constantly disrupted and requires new ideas to sustain and improve growth and margins
- Take a stand: on energy policy, trade balance, restoring manufacturing and the broader industrial agenda for the US (e.g., importance of natural gas for energy independence)
In terms of US policy and investment, Nucor sees $2.2 trillion of investment (according to the US Society of Civil Engineers) needed to create a more competitive infrastructure and US manufacturing base. This is not reckless spending, however, if you look at the willingness of companies to make investments in the US. For example, Rick cited the example of CAT investing $20B in the last two years on capacity expansions and acquisitions and the fact that over half of John Deere's capital spending last year was in North America. Moreover, "Volvo, AGCO & Kubota are betting on the USA and investing here." Of these global firms, Volvo is investing in a $100mm expansion in a "Shippensburg, PA facility to bring wheel loaders back from Sweden and excavators back from South Korea" and Kubota is "building a new plant to make 22,000 compact tractors/ year in Jefferson, Georgia."
Stay tuned as our live coverage of Commodity EDGE continues.