U.S. Steel Bets on New Technology and the South

In Arkansas, about 45 minutes north of Memphis stands Big River Steel, which can produce 3.3 million tons of raw metal a year. That’s almost 15% more than the mill’s new owner, U.S. Steel Corp., can make at its venerable Mon Valley Works just outside Pittsburgh. Even more important, Mon Valley employs about 3,000 unionized workers. Big River has fewer than 700 employees; none are in a union. 

U.S. Steel, which completed its purchase of the mill last year for almost $1.5 billion, has big plans for the site: It aims to pour an additional $3 billion into the operation by 2024, doubling capacity. That would make the steel plant the country’s biggest—and the heart of the company’s operations. The area “is becoming the steel capital of the United States,” says Dan Brown, the plant’s chief operating officer. “We’re a much different company today, and we’re headed in my mind in the right direction.”

Three months after completing the purchase of Big River, U.S. Steel told shareholders of plans to cancel a $1.3 billion plan to upgrade Mon Valley, the company’s flagship plant, where founder Andrew Carnegie built his first mill in the 1870s. The company says Big River isn’t meant to replace operations farther north—though executives these days frequently say the goal is to get “better, not bigger.”

Earlier this year, lawmakers in Arkansas passed an incentive package for U.S. Steel through recycling tax credits that could give the company up to $11 million in tax breaks annually for 14 years.

Source: Bloomberg News