Nucor CEO Will Retire -- WSJ
September 07 2019 - 3:02AM
Dow Jones News
By Bob Tita
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (September 7, 2019).
Nucor Corp. said Chief Executive John Ferriola will retire at
the end of the year and be replaced by veteran executive Leon
Topalian, as the largest U.S. steelmaker navigates weakening demand
from a decelerating industrial sector.
Mr. Ferriola, chief executive of the Charlotte, N.C. company
since 2013, has been a staunch advocate of tariffs on imported
steel that the Trump administration implemented last year. The 25%
duty imposed on most imported steel in March 2018 drove up steel
prices and swelled Nucor's profit in the months that followed.
But steel prices have fallen in the past year as manufacturing
activity has slowed and customers work through their inventories
rather than buy more steel. The benchmark price of hot-rolled sheet
is down more than 35% to $575 a ton from a peak last July.
Falling prices contributed to a 43% decline in Nucor's
second-quarter profit. The company in July reported steel shipments
during the quarter slipped 7% from last year.
Nucor has pressed ahead with an aggressive build-out of its
steelmaking capacity. The company earlier this year said it would
spend $2.2 billion to expand and upgrade mills including a new
plant in Kentucky. The company also is expanding in Mexico under a
joint venture with a Japanese steelmaker.
Mr. Topalian, 51 years old, will face questions from investors
and industry analysts about whether Nucor should delay some of the
expansions until market conditions and steel prices improve. Most
of the company's expansions and new facilities are scheduled to
begin operating in 2021 and 2022.
Nucor's shares fell 0.56% to $50.07 on Friday. The stock is down
nearly 21% over the past year.
Under Mr. Ferriola, Nucor pressed its advantage as one of the
lowest-cost, most efficient steelmakers in the U.S., siphoning
sales away from high-cost competitors such as United States Steel
Corp. and ArcelorMittal SV. Nucor's annual sales during his tenure
have risen 29% to $25 billion in 2018 and income more than
quadrupled to $2.36 billion. The company is the sales leader in the
domestic steel industry and employs 26,700 people.
Mr. Topalian joined Nucor 23 years and was promoted to executive
vice president two years ago. He will serve as president and chief
operating officer this fall until moving into the CEO job Jan.
1.
Mr. Ferriola, 67 years old, joined Nucor 28 years ago. He is
also chairman of Nucor's board. A company spokeswoman said a
decision about the future of that post hasn't been made yet.
Write to Bob Tita at robert.tita@wsj.com
(END) Dow Jones Newswires
September 07, 2019 02:47 ET (06:47 GMT)
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