National Steel Corporation
List of Deals
In 1929 three steel companies, Weirton Steel Company, Great Lakes Steel Corporation, and subsidiaries of M.A. Hanna Company, joined together to form National Steel Corporation. Upon formation, the New York Times hailed National Steel as "a complete unit in the steel industry, [owner of] ore lands, vessels, coke ovens, and blast furnaces in addition to mills." From its formation in 1929 through 1932, National Steel's annual earnings slipped from $17.3 million to $6.6 million, falling as the severity of the Depression continued.
By the beginning of 1930, the extensive expansion undertaken by one of M.A. Hanna Company's subsidiaries, Hanna Ore Mining Company, had boosted National Steel's iron ore holdings considerably, making National Steel the second-largest holder of ore reserves in the country. National Steel acquired the Michigan Steel Corporation before the year was through. This acquisition bolstered National Steel's role as a provider of steel to the automobile industry. National Steel was generating roughly $140 million in annual sales by 1941. The company's annual sales volume was considerably larger, reaching nearly $450 million by the end of the decade. At the end of the 1940s, the scope of National Steel's operations included nearly 400 coke ovens, six blast furnaces producing more than 3.25 million net tons of pig iron, steel mills, and sizeable iron ore and coal-producing properties.
Over the course of its first two decades, National Steel had gained the reputation as one of the most profitable and efficient steel producers in the country. The 1950s and the decades to follow, however, would bring increasing competition from foreign steel producers, as their production methods first equaled those of U.S. producers, then eclipsed them in efficiency, and the new era would also witness the introduction of aluminum as a popular substitute for tin plate in the container industry. This latter development had direct ramifications for a company like National Steel, whose production of tin plate for the container industry ranked as its second-largest source of income next to supplying the automobile industry with steel. To overcome both the insurgence of foreign steel producers and the emergence of aluminum as container material, National Steel would increase the efficiency of its operations and diversify into other business areas.
Capital expenditures increased dramatically, beginning in 1959 when National Steel initiated a four-year, $400 million expansion and modernization program. When the program ended in 1963, National Steel ranked as the fourth-largest steel producer, accounting for 7 percent of total finished-steel shipments in the United States and generating nearly $850 million in annual sales. Up to this point, the company had never failed to show a profit during its thirty-five years of existence. In 1965 National Steel eclipsed the $1 billion sales plateau, recording $1.1 billion in sales and producing 8.5 million tons of raw steel.
By the late 1960s it had become apparent to the company's management that no matter how efficient its production facilities were, they could no longer flourish in the face of the steel industry's new challenges. Tin cans were rapidly losing ground to aluminum cans by this point, and in response, National Steel joined the competition rather than directly opposing it. In 1967 National Steel acquired 20 percent of Southwire Company's common stock as part of an agreement between the two companies to jointly build an aluminum smelter. The jointly formed National Southwire Aluminum Company; an aluminum plant was completed in 1970. That year, National Steel agreed to acquire Pittsburgh Aluminum Alloys Inc. and its sales affiliate, S & S Sales.