Copperweld Steel Company

Submitted by Richard K. Fleischer

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Part 1, The Good Years

Copperweld began as a small business at Rankin, Pa. with about 23 employees in . The Plant moved to Glassport, Pa. in and began to expand. The company process unites a thick jacket of molten copper over a heated steel billet. The welded billet is then rolled into rods. Some is extruded into cable. This cable was used for conductors, overhead ground wires, messenger cable, and guy wires on overhead transmission lines.

&#; Copperweld has a desire to make their own alloy steel for making cable and wants to insure that they have a steady supply of such alloy steel, so Copperweld announces that they will build a new Steel Division and plant in Warren, Oh. on Mahoning Ave. extension, also known as SR-45.

The company locates on a 423 acre site that had previously used by the American Puddled Iron Company. Along with the purchase of the API Co. came a 29 inch and 24 inch blooming mills. The American Puddled Iron plant was last operated by the A. M. Byers Co. of Pittsburgh from to .

&#; Copperweld goes into production. The Company uses some of the old API Co. buildings and has a total of 13 structures on the property. There are six miles of railroad track within the mill complex. There are 7 ½ acres of space that are under roof.

The two 35 ton Electric Arc Furnaces at the Warren plant are the largest EAF&#;s built up to that time with an annual output of 100,000 tons of alloy steel. The plant employs about 700 workers. There are five rolling mills involved in the plant. They are 29, 24, 18, 13, and 9 inch mills. The rolling mills will have a capacity of 250, 000 tons annually.

&#; Borg-Warner tries to negotiate a takeover of Copperweld and fails.

&#; Copperweld adds two 65 ton EAF&#;s, and a 35 inch blooming mill, two annealing furnaces, in addition to straightening and finishing equipment. Copperweld now has employees and produces 6% of the EAF steel in the U.S. Aristoloy is the trade name for the alloy steels made at Copperweld in Warren. Copperweld produces 800 different kinds of alloy steels. Among these are bearing quality steel, structural alloy steel, alloy tool steel, stainless steel, leadloy steel, carbon tool magna flux, aircraft quality steel, and many electric furnace carbon grades of steel.

&#; Copperweld adds a 56 inch hot strip mill. It now has hourly employees. The plant now has an ingot production of 660,000 tons annually. In the past three years Copperweld has installed a new 75 ton EAF, a 35 inch mill, a 20 inch continuous hot mill, and new soaking pits.

&#; Copperweld is made up of four divisions: the Steel Division in Warren; wire & Cable Division in Glassport, Pa.; Flexo Fine Wire Division at Oswego, NY. ; Ohio Seamless Tube Division at Shelby, Oh.

There are now 45 acres of ground under roof with 75 overhead cranes. Each year over 300 million kilowatt hours of electricity is used to operate the plant. That&#;s enough to power 74,714 homes for a year, or supply the electrical needs of city of 250,000 people.

Copperweld used 2,325,467 cubic feet of gas for it&#;s heating furnaces &#; enough to provide gas for 11,625 six room houses for a year.

There are 16 miles of railroad track on site operated by four diesel locomotives and 213 private rail cars.

About 24 MILLION gallons of water are pumped from and returned to the Mahoning River every day for cooling furnaces, soaking pits, and rolling mills.

Copperweld&#;s real estate and personal property taxes were $573, 127 last year. That amounts to $236 per employee.

Copperweld&#;s payroll in Warren for was $20,212,600.

Copperweld, over it&#;s four divisions employs 8,610 people.

&#; Copperweld sets earnings records. Steel Division &#; Warren $123 million compared to $86.3 million the previous year. All other Copperweld Divisions saw big increases as well.

September &#; French conglomerate Societe Imetal run by French financier, Baron Guy de Rothschild, seeks to buy out Copperweld amidst much opposition of Copperweld management, the United Steel Workers Union, the City of Warren, and other local governments.

Copperweld workers go to Washington to demonstrate against Rothchild&#;s takeover of the company.

Dec. 10, &#; A three judge panel in Federal Court approves the takeover of Copperweld.

&#; Copperweld has five consecutive years of record earnings and Copperweld is Societe Imetal&#;s most profitable division.

Copperweld Steel Co. Part II &#; The bad years.

&#; Copperweld concentrates on making specialty steel bars which are used for specially machined parts for steering gears, industrial equipment, forgings, etc. Many steel companies complain about unfair foreign competition. They allege that imports are being subsidized by foreign governments and sold in the U.S. below fair market value. (This is a classic case of dumping and it&#;s against U.S. Trade Laws to do this). Copperweld in Warren now begins suffering financial losses. The company begins 11 consecutive years of financial losses.

&#; Copperweld now has 1,000 hourly workers. Societe Imetal will now split up Copperweld and the Steel Division in Warren will be on it&#;s own. The spin-off is to keep the other divisions out of trouble if, and, when the Steel Division has to file for bankruptcy.

&#; The Steel Division in Warren is spun-off and becomes CSC.

&#; Japan&#;s Daido Steel buys a majority stake in CSC.

&#; Warren Township approves a 10 year 75% tax abatement and $9 million for improvements. There are more charges of steel dumping by foreign producers. Japan, Russia, and Brazil are mentioned. Steel imports from Korea are up 300%, Japan up 153%, and Russian steel imports have doubled.

July &#; Daido Steel and French investors sell their interest in CSC. Nov. 22 CSC files for bankruptcy.

Feb. &#; The company sets a June 30 deadline to find a buyer for the company or close.

This is how some of Copperweld&#;s competition has fared over the same period of time :

LTV Canton &#; sold in bankruptcy, became Republic Engineered Steels; Babcock & Wilcox &#; closed; Green River &#; closed; USS Lorain &#; Joint venture with Kobe Steel; Bethlehem at Johnstown, Pa. &#; closed.

April &#; Hamlin Holdings of Akron to buy CSC. The Steel Workers Union takes concessions. By August the bankruptcy court approves the sale to The Reserve Group, an operating company formed by Hamlin Holdings.

July &#; Trumbull County grants a 60% tax abatement for improvements to the melt shop, a continuous caster, and a 35inch mill. August &#; Champion Twp. Grants a 50% abatement.

&#; CSC converts an EAF to a ladle refining furnace to reduce costs.

July &#; Ground broken for a $100 million continuous caster that was never used. About 2 million tons of new imported steel bars cause major problems to domestic producers.

January 12, CSC filed for bankruptcy again, never getting to use the new melt shop or the continuous caster. OPERATIONS CEASED on April 13, . At one point, CSC was selling product for $40 a ton less than what it cost to make.

Over the years the USW took concessions twice, giving up over $66 million in wages and benefits.

Over the years, Copperweld seems to have invested quite a bit of money in their operations. The continuous caster was supposed to be the salvation of the American steel industry. Copperweld went out of business before they could use their&#;s. WCI-Severstal-RG Steel had one and STILL went out of business.

I can remember reading an article on the business page of the Cleveland Plain Dealer stating that Japanese suppliers of specialty steels were selling their product in the U.S. at a cost that was 60% lower than the cost to produce it. I imagine that the Japanese government was covering their losses until companies like Copperweld and several of their domestic competitiors went out of business. Our federal government stood by and did next to nothing about it for political reasons &#; they wanted to keep Japan within our &#;sphere of influence.&#;

After Copperweld closed, another company moved into the new unused melt shop. That was Warren Steel Holdings. It was a Ukrainian owned company that operated off and on for a few years, then closed, due to, according to the CEO of the company, Chinese steel dumping.

Related

American wire and cable company based in Tennessee

For the trademarked product, see Copper-clad steel

Copperweld is an American company based in Fayetteville, Tennessee, and maintaining a management office in Brentwood, Tennessee. Its main products are wire and stranded electrical cable made from its Copperweld brand copper-clad steel ("CCS") or copper-clad aluminum ("CCA").[1] In addition to its American operations, Copperweld maintains a production facility in Telford, England, and a distribution hub in Liège, Belgium.

History

Beginnings

A group of engineers (S. E. Bramer, Jacob Roth, F. R. S. Kaplan, Simon Loeb and William Smith, Sr.) in the Pittsburgh industrial town of Rankin, Pennsylvania first created a permanent metallurgical bond between copper and steel in . This bond originally was made under a molten weld process. Their product, a CCS wire patented under the brand name Copperweld, was soon adopted as an alternative to solid copper wire in many conductor applications, particularly those where copper would be too ductile or would not offer the breaking strength of steel. The original use, however, was for watch springs: the copper cladding prevented corrosion. The company was founded as the Copper-Clad Steel Company, but in , changed its name to the Copperweld Steel Company.

In , the company installed itself in a former axe factory in Glassport, Pennsylvania. Copperweld Steel went public for the first time in , shortly before the onset of the Great Depression, but its shares were eventually withdrawn.

The United States government was the company's major client throughout the Depression and World War II, and its patronage is largely responsible for keeping the company solvent in that time of severe economic downturn. The company was listed on the New York Curb Exchange in , and on the New York Stock Exchange in . It would continue to trade on the NYSE until .

In , Copperweld would open its second factory in Warren, Ohio, manufacturing steel billets.

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Post-war growth and diversification

After the war, the resurgence of the American economy helped Copperweld thrive. The company's management offices relocated from Glassport to downtown Pittsburgh soon after the war. Although there was considerable investment in existing divisions, acquisition became another of the company's major growth paths. In , the company acquired the Flexo Wire Co. of Oswego, New York. The next year, Copperweld entered into the steel tube manufacturing business with the acquisition of Ohio Seamless Tubing Company of Shelby, Ohio. In , the company merged with stainless steel finisher Superior Steel Company, but sold off the division after five years of poor performance.

In conjunction with Battelle Memorial Institute, the company developed a second bimetallic product line, an aluminum-covered steel wire that it branded as Alumoweld® in . The new product was successful, and the company engaged in its first international joint venture in , with the creation of the Japan Alumoweld Company of Numazu, Japan. Copperweld's stake was 45%, with the remainder owned by Japanese wire and cable manufacturer Fujikura Ltd.

In , Copperweld Steel Co. acquired the Chicago-based Regal Tube division of Lear-Siegler.

A new name

Now truly diversified, the company changed its name in to Copperweld Corporation. The company expanded into the primary and secondary metallurgical products market, offering a diversified product range that included steel pipe and tube; bimetallic wire, strand and strip; steel bars and plates; solder and skiving, and employed thousands at multiple facilities in the United States, Canada, Japan and Britain. The bimetallic process moved beyond simple copper and steel, and eventually also combined metals and alloys such as aluminum, tin, brass, gold, nickel and silver.

In , the company's third foray into bimetallics was realized when the company opened a CCA wire manufacturing plant in Fayetteville, Tennessee. That division, Copperweld Southern, would go on to become the focus of the company's bimetallic wire operation.

Takeover

French holding company Imétal S.A. (today known as Imerys), owned by the Rothschild family, acquired controlling interest of Copperweld Corporation in . Imétal's acquisition of Copperweld represented the first hostile takeover of an American company by a foreign entity.[2] Imétal vowed not to interfere with the theretofore successful company's direction.

In , the company expanded its bimetallic wire production to Campinas, Brazil in a joint venture with Erico International Corp. Copperweld would buy the entire operation from its partner just three years later. Also in the firm announced the layoff of its Glassport, Pennsylvania facility along with 548 full-time jobs, prompting the mayor of Pittsburgh and the head of the RIDC to have a 2-hour meeting with company executives in an attempt to save the facility.[3]

A new division and revenue stream were created in with the advent of Copperweld Energy, which bought stakes in Houston-based Guardian Oil Company. The ostensible purpose of Copperweld's involvement in the energy business was to drill for natural gas on the grounds of (or near) its operations in Ohio and Pennsylvania, to ensure a steady supply for its factories. That same year, the company acquired American Seamless Tubing of Baltimore, Maryland.

In , the U.S. Supreme Court ruled in favor of Copperweld in a landmark antitrust case, Copperweld Corp. v. Independence Tube Corp., that a parent company is incapable of conspiracy with a wholly owned subsidiary.

The severe steel crisis of the late s and early s hit Copperweld hard. The venerable Glassport facility would close entirely in . In , the Oswego fine wire division was shut down. Both operations were relocated to Copperweld Southern in Fayetteville, largely due to cheaper labor costs in the South.

Two Copperwelds

In a bold move to shed the company of its crippled steel manufacturing operations and concentrate on fabricated steel products, Imétal spun off Copperweld's Warren, Ohio operation into a separate publicly traded company in . That company, CSC Industries, would continue to operate as the Copperweld Steel Company, causing confusion. For some time, two "Copperwelds" existed.

However, Imétal's gamble paid off. Copperweld Corporation returned to profitability just one year after the spin-off of CSC Industries, which, by contrast, was doomed. The newly formed company never turned a profit in its entire history, and went bankrupt in . The assets of CSC Industries were acquired in a bidding war by Ohio-based Hamlin Holdings in , and they discontinued use of the Copperweld name.

The late s saw a much healthier Copperweld Corporation divest of its operations in Brazil and sell its tubing operation in Baltimore. Expansion was again on the horizon, with the announcement of a $90 million upgrade to its plant in Shelby, Ohio, and the construction of another tube plant in Birmingham, Alabama. The company also bought National Standard Company's Copperply division, giving it control of a competing brand in bimetallic wire.

In , Copperweld and Fujikura announce a second joint venture together, the United States Alumoweld Company, to be located in Duncan, South Carolina. In , the Copperweld Corporation divested itself of the Alumoweld® business altogether, selling its shares and the rights to the brand to Fujikura.

Further growth by acquisition continued in the company's tube sector in the s as it acquired Piqua, Ohio-based Miami Industries in and two Canadian steel tube companies, Standard Tube Canada and Sonco Steel Tube in . That same year, the Shelby plant was the subject of another important expansion. In , the company announced the building of a stainless steel tube plant in Elizabethtown, Kentucky.

The bimetallic wire division also prospered, with a drastic increase in demand of bimetallic wires for the cellular telephony boom. In , the company bought Metallon Engineered Materials Corporation of Pawtucket, Rhode Island in . There was a major expansion of the Fayetteville facility in , and it purchased Sayton Fine Wires of Telford, England in .

LTV

In , Cleveland, Ohio-based LTV Steel acquired Copperweld Corporation from Imétal for $650 million, and the subsidiary became known as LTV Copperweld. At that time, the company was the largest producer of structural steel tubing in North America with 23 plants and employing 3,500 people.[4] But LTV was drowning in debt, and at the end of , LTV, along with 48 subsidiaries, including Copperweld, filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code.

Under the order of conservators, LTV's various subsidiaries were sold off. But because the LTV Copperweld division maintained profitable operations throughout LTV's bankruptcy proceeding, it was able to secure separate debtor-in-possession financing through GE Commercial Finance. In late , LTV Copperweld emerged from bankruptcy.

Dofasco

Dofasco (today a division of Arcelor Mittal) acquired most of the LTV Copperweld assets,[5] including 50% of the bimetallic wire division, which would in turn be sold to a North Carolina businessman David S. Jones for $14.2 million in [6] and operated as Copperweld Bimetallics LLC. It was the only division of the previous conglomerate to continue to operate under the Copperweld name, and kept the established brand as a registered trademark for its copper-clad steel conductors.

Fushi

In August , however, the owner sold the company for US$22.5 million to Fushi International, founded by Li Fu in . The acquisition is significant because it represents the first major investment in the state of Tennessee for a mainland Chinese company. By acquiring Copperweld, it not only opened up a worldwide distribution channel, it also gained product diversification by the presence of CCS wire in its new subsidiary's lineup. Three months later, Fushi International was listed on the Nasdaq, and changed its name to Fushi Copperweld, capilizing on the established brand name in the west.

A group of investors headed by Chairman Fu Li delisted from the Nasdaq on December 27, , returning the company to private ownership gain.[7]

Kinderhook

In October , Kinderhook Industries LLC announced its acquisition of Copperweld, citing the company's proprietary manufacturing and differentiated products that provide an array of compelling growth avenues to pursue, particularly in the automotive. Kinderhook is a private investment firm that manages over $3.1 billion of committed capital.[8]

Locations and subsidiaries

• Copperweld Bimetallics LLC in Fayetteville, Tennessee (opened , acquired )
• Copperweld Bimetallics UK Ltd. in Telford, England (formerly Sayton Fine Wire, opened , acquired )
• Copperweld Bimetallics Europe SPRL in Liège, Belgium (formed )

Products

Copperweld manufactures bimetallic wire and electrical cable. The metallic combinations are engineered to provide the benefits of two disparate materials. CCS, or copper-clad steel wire, provides the strength of steel with the conductivity of copper. In , the original molten-weld process for Copperweld® CCS wire was abandoned in favor of a pressure-rolling process, which is still used today. In the case of CCA, or copper-clad aluminum, the key benefit over solid copper is lighter weight and flexibility.

In late , Copperweld Bimetallics LLC, the company's American subsidiary, purchased most of the assets of its biggest American competitor, the Bimetals division of CommScope, relocating their equipment from Statesville, North Carolina to Copperweld's plant in Fayetteville, Tennessee.

References