Rural Work Ethic Means Big Business

Nucor Steel Knows What It Wants in a Workforce-and Finds it in rural North Carolina

By Laura Hendrix Corbin

A declining agricultural economy and limited industry might logically spell doom for a rural community. But not North Carolina's Hertford County. At a time when the population was decreasing, jobs were being lost, and people had to commute long distances for work, the nation's largest steel producer saw exactly what it needed.

Nucor Steel typically locates its manufacturing facilities in rural areas in part because it requires so much acreage - at least 1,000 acres. But, the main reason is the good work ethic that tends to be fostered in those rural areas.

The Charlotte, N.C., based corporation chose Hertford County, with a population of 22,600, in 1998 for what was proposed to be a $300-million, 300-job steel plate facility primarily for that work force, said Giff Daughtridge, Nucor Steel vice president and general manager.

"The work ethic of people found in rural areas, who typically have been brought up in an agricultural work environment, is one of the major reasons our company seeks those areas," he said. "What has been great about Hertford County and our very successful startup there is the people. Our team has a tremendous work ethic. We were just blown away by that work ethic and the desire to succeed. They took to the training like ducks in water, with such a desire to learn."

That rural work ethic produces employees who are not clock-watchers, Daughtridge added, and who do what is necessary to get the work done. "Everyone takes good care of the equipment. If it does break down, even if they aren't 'maintenance,' when the equipment breaks down, they don't wait for someone else to come fix it. They take care of the problem."

The typical size of Nucor Steel's facilities usually dictates a rural location as well. "We look for 1,000 acres, so it's usually rural," Daughtridge explained, "but the human side of what we get is what is so great about the strategy."

When Nucor began looking for a location for the steel plate facility, it was the second time in less than five years that the company eyed North Carolina for a mill operation. The state had lost out earlier to its southern neighbor, Berkeley, South Carolina, where the mill began operations in 1997.

This time, North Carolina was intent on landing the project. State leadership had taken note of how the Berkeley County facility had attracted 12 supplier companies to locate or consider area facilities, creating more than $1.5 billion in additional investment and more than 500 additional jobs.

"Nucor Steel is known as an industry maverick, in a positive way," said Dean Dawson, head of marketing for the North Carolina Department of Commerce, who was also the project manager in charge of the Nucor project recruitment. "The company went into the steel business and revolutionized it by building mini-mills, not the typical, massive steel operations you see up North.

"Nucor Steel typically seeks rural locations for their facilities," he added. "It's their preference for many reasons." The company operates 14 mini-mills in eight states.

Dawson said the effort to land a Nucor Steel plant - "something we had been pursuing for a long time" - was a joint one put together by the state Department of Commerce along with Hertford County and the North Carolina Northeast Partnership.

"We knew the company had to have significant transportation access," Dawson said, "with deep water for sea-going barges to get onto the site to bring in the scrap metal. It was the same criteria as before. They also would be big power users, and would need gas and rail. Nucor needed a fully serviced site on deep water with all utilities."

Together, the organizations looked for likely locations, beginning where they had been before, including a site near Wilmington that had been determined "not ideal."

"There was a site in Hertford County that had been an industrial site before, but was now a Brownfield because it had had some contamination," Dawson said. "Nucor liked the location, but didn't like the Brownfield aspect. Nucor prides itself on being among the largest recyclers. The company is very sensitive to the environment.

"We were literally in the helicopter over the site, wondering whether there was another location we could show them, before we lost them again," he added. "Then, we began to see an area where if we extended a site to some forest land owned by a big paper company, that it would be perfect."

The second piece of the puzzle was a matter of incentives. State and local officials managed to put together an "unprecedented package over 10 years, in which Nucor Steel had to 'pay to play' by hitting certain milestones to trigger their incentives," Dawson explained.

Bill Early, director of the Hertford County Economic Development Commission, said the area was ready to welcome Nucor. "Over the past 50 years, our population had declined. Our children were going off to college and not coming back because of the lack of employment opportunities. Sixty-five percent of the county is forested, so we don't have a lot of industry." More than 700 county residents commuted every day to work in the shipyards of Norfolk, VA.

At the time Nucor Steel announced its plans for the 100,000-square-foot Hertford County facility, it was one of the state's most economically distressed areas. Then-N.C. Gov. Jim Hunt said at the time that Nucor's investment "will transform the region. This company is an outstanding corporate citizen and a magnet for supplier industries. The high-wage jobs Nucor will create in the Northeast (region) will provide brighter futures for hundreds of our state's families."

Six months earlier, Hertford County had been ranked as the state's eighth most economically distressed county, with an average annual wage of $18,500.

The projected average wages at Nucor Steel was $60,000. That drew more than 5,000 applications for the 300 jobs.

Early notes that Nucor Steel's plant is now a bigger success than first expected. "The plant has exceeded all projections on investment and number of workers. The total investment has been $480 million, and the company employs more than 400 people now. The average wage is $66,000."

In addition, several other companies have located at the Nucor site. Three are support for the plant, while two are transportation operations. Along with on-site contractors, these facilities have created in excess of 50 jobs and another $30 million from the spin-off, according to Early.

"Nucor puts Hertford County on the map because of its reputation," Early adds. "When you have a company of Nucor's reputation, it gets others to look and see why it chose to locate in your area."