National Steel Corporation
| Company type | Public |
|---|---|
| Industry | Steel manufacturing |
| Founded | October 1, 1929 |
| Headquarters | Pittsburgh , United States |
Area served | United States |
| Products | Steel products, iron ore, pig iron, steel ingots |
The National Steel Corporation operated from 1929 to 2003 as a prominent American steel manufacturer. It was established on October 1, 1929, through a consolidation initiated by Weirton Steel alongside the newly formed Great Lakes Steel Corporation, which was in the process of building its steel mill in Ecorse. This merger incorporated various subsidiaries of the M. A. Hanna Company, including blast furnace facilities located in Buffalo, New York and on Zug Island, as well as divisions handling iron mining and ore transportation. The Michigan Steel Corp, which preceded Great Lakes Steel, became part of the corporation in 1931 prior to the commissioning of Great Lakes' plant.
With its headquarters situated in Pittsburgh, National Steel achieved a profit of USD 8.4 million during the challenging economic climate of 1930 and continued to operate profitably through 1931, setting it apart from many other industry players. This financial resilience was largely attributed to its sales focus on the automotive sector and its strategic proximity to Detroit’s steel industry, which helped minimize freight expenses. The company sustained profitability throughout the duration of the Great Depression.
National Steel Company (1899)
The National Steel Company incorporated in 1899 bore no direct relation to the later National Steel Corporation founded in 1929, aside from sharing the name.
This earlier entity was incorporated in New Jersey on February 27, 1899, with capital stock comprising $27 million in preferred shares and $32 million in common shares.
| Company Name | Location | Outstanding Debt | Debt Maturity |
|---|---|---|---|
| Ohio Steel Co | Youngstown, Oh | $1,000,000 | June 1, 1908 |
| Shenango Valley Steel Co | New Castle, Pa | $330,000 | October 1, 1902 |
| King, Gilbert & Warner Co | Columbus, Oh | $130,000 | May 1, 1905 |
| Aetna Standard Iron & Steel Co | Bridgeport, Oh | $600,000 | January 1, 1908 |
| Bellaire Steel Co | Bellaire, Oh | $301,000 | March 2, 1906 |
| Buhl Steel Co | Sharon, Pa | $200,000 | November 1, 1903 |
| Union Iron & Steel Co | Youngstown, Oh | none |
Organized around July 1891 with an initial capital of $200,000 to construct a Bessemer plant that reached full production by January 1893, Shenango Valley Steel Co. acquired the Neshannock blast furnace from Crawford Iron & Steel Co. for $250,000 in April of that year and subsequently increased its capital stock to $450,000. This furnace had an annual pig iron output capacity of approximately 67,000 tons.
In the same month of April 1893, the company also purchased the Raney & Berger Iron Co. furnace for another $250,000 and expanded its capital beyond $1 million. The furnace transitioned from manufacturing foundry iron to producing Bessemer iron and was upgraded with a larger furnace installation by December 1899.
The Rosena Furnace Company was established on December 1, 1892 in Pittsburgh with a capital investment of $100,000 to operate a furnace owned by Oliver Iron & Steel Co. Improvements made included installing new stoves and blowing engines. Initially producing roughly 60 tons daily, this furnace yielded a total of 75,000 tons during its first 43 months of operation.
In January 1898 Shenango Valley Steel increased its capital stock from 10,000 to 15,000 shares at a par value of $100 each.
Michigan Steel Corp
Michigan Steel Corp focused on manufacturing sheet steel primarily for the automotive industry and operated as an independent entity from 1923 until 1931, after which it merged into Great Lakes Steel Corp. The firm was officially incorporated in New Jersey on September 23, 1922, with George R. Fink serving as president. Its sheet mill facility, located in Ecorse, Michigan, spanned 40 acres and commenced operations on July 5, 1923, initially catering to the automobile sector. Production capacity grew significantly from 36,000 tons per year to 180,000 tons by 1928.
From a financial perspective, Michigan Steel demonstrated robust earnings, with pre-tax profits increasing from $557,284 in 1924 to $1,939,262 by 1929. To fund the plant construction, the company issued $500,000 in 15-year bonds at a 6.75% interest rate in 1923. Subsequently, it raised $1.25 million in 10-year bonds at 6% in 1928 to support expansion efforts, which rose to $2.2 million by 1930.
The corporation authorized and had outstanding over 220,000 no-par value shares. An initial public offering of 50,000 shares priced at $50 each took place in August 1928. By October of that year, the company's market capitalization surpassed $12 million. Its stock was traded on the Detroit Stock Exchange until February 1931 and briefly appeared on the New York Stock Exchange from April 1929 through January 1931. Dividends were consistently distributed from 1924 through 1928, with quarterly payments beginning in October 1928.
During 1928, the stock price fluctuated between $9 and $65, reaching its peak early in the year before experiencing declines amid market instability into the early 1930s.
| 1924 | $557,284 |
| 1925 | $1,067,945 |
| 1926 | $1,077,463 |
| 1927 | $1,137,052 |
| 1928 | $1,262,381 |
| 1929 | $1,939,262 |
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1928 Low | 51+1⁄4 | 54+5⁄8 | 55 | 58 | |||||||||
| 1928 High | 58 | 58 | 65 | 60 | |||||||||
| 1929 Low | 62+1⁄2 | 81 | 100+1⁄4 | 95 | 85 | 107+3⁄8 | 104 | 104 | 59 | 50 | 44 | ||
| 1929 High | 84+3⁄4 | 105 | 101+3⁄4 | 105 | 108+1⁄4 | 122+7⁄8 | 114+3⁄4 | 112 | 102+7⁄8 | 73 | 59+7⁄8 | ||
| 1930 Low | 53 | 63+1⁄2 | 65+7⁄8 | 65 | 59 | 58+1⁄4 | 60+3⁄8 | {{frac{54}{3/4}}} | {{frac{49}{2}}} | {{frac{41}{4}}} | {{frac{42}{2}}} | {{frac{38}{2}}} | {{frac{43}{4}}} |
Great Lakes Steel Corp
Great Lakes Steel was incorporated in February of 1929 and established on a site consisting of approximately 275 acres of marshland that required significant reclamation work.
| Date | Event |
|---|---|
| May 25, 1929 | Excavation commenced |
| June 28 | Initial pile driven |
| August 14 | First concrete pour completed |
| August 23, 1930 | First heat produced from open hearth furnace |
| August 25 | Initial ingot rolled on blooming and billet mills |
| September 2 | First strip rolled |
National Steel Corp
National Steel Corp. (NSC), established in Delaware on November 7, 1929, functioned as a holding company with an authorized capital stock of three million shares. Approximately two million shares were issued in exchange for controlling stakes in Weirton Steel Company, Hanna subsidiaries, and Great Lakes Steel Corp. This strategic consolidation elevated NSC to the position of the sixth-largest steel manufacturer in the United States, boasting production capacities of 3.5 million tons of iron ore, 1.75 million tons of pig iron, and two million tons of steel ingots.
In January 1931, NSC expanded its operations by acquiring the assets of Michigan Steel Corp. for a combination of $6 million in notes, $3 million in cash, and stock shares. Its portfolio of subsidiaries encompassed Weirton Steel Co., Hanna Furnace Corp., various iron ore mining enterprises located in Michigan and other states, Great Lakes Steel Corp., as well as the Producers Steamship Company, which operated a fleet of seven vessels.
Growth was financed through a $40 million bond issuance in April 1931, allowing NSC to refinance existing debt at reduced interest rates during the mid-1930s while preserving maturity dates extending to 1965. By August 1931, NSC finalized a $36.5 million expansion initiative that included a $29 million investment in Great Lakes Steel’s plant.
| Entity | Par Value | Shares Prior | Shares Subsequent | Notes |
|---|---|---|---|---|
| Hanna Furnace Corp (Delaware) | $10 | 989,500 | 100 | Property transferred to Great Lakes Steel Corp. |
| Weirton Steel Co. | $100 | 237,720 | 1,000 | |
| Great Lakes Steel | no par value | 400,000 | 1,000 | |
| Hanna Iron Ore Co. | no par value | 50,000 | 1,000 | |
| Producers Steamship Co. | $100 | 9,600 | 1,000 | Reincorporated in Delaware; book value unchanged. |
By the mid-1930s, all outstanding shares were converted to a par value of $25 each; authorized capital remained steady at three million shares with roughly two million shares outstanding by the end of the decade. A stock split at a ratio of three-for-one was implemented effective March 30, 1950.
Throughout the period from the 1930s through the late 1950s, NSC’s common stock demonstrated consistent price growth alongside regular dividend distributions despite economic volatility:
| Decade | Price Range (Low - High) | Dividend Patterns |
|---|---|---|
| 1930s |
Dividends started modestly during early Depression years and progressively increased after 1935. | |
| 1940s |
Dividend payments remained stable, bolstered by wartime demand and postwar growth. | |
| 1950s |
Dividends stayed consistent, reflecting solid financial results amid industry expansion. |
National Steel’s operational strategy relied on vertical integration spanning mining operations, steel manufacturing, and transportation subsidiaries to sustain competitive positioning and market share within the American steel sector during the early to mid-20th century.
Post war years
Following World War II, soaring steel demand generated record profits for the company. NSC maintained robust earnings through the 1970s despite significant declines in the latter part of that decade caused by increased competition from imported steel products. In 1979, National Steel diversified its holdings by acquiring United Financial Corporation, which owned Citizens Savings & Loan Association based in San Francisco—then ranked as the seventh-largest savings and loan institution nationwide.
1980s
Beginning in 1980, the company experienced a downturn in steel demand and profitability due to rising imports and unfavorable market conditions. By 1983, shareholders established National Intergroup, a holding entity that reorganized the diversified operations into six autonomous divisions covering steel, aluminum, and financial services. That same year, employees at the Weirton mill purchased their facility from National Steel, forming an independent employee-owned company.
In 1984, Japan’s Nippon Kokan K.K. acquired a half-interest in National Steel for $292 million, increasing its ownership to 70% by 1990 as National Intergroup moved to divest from its steel segment. The company endured workforce reductions and faced bankruptcy risks in the early 1990s.
Amid the 1981 savings and loan crisis, National Steel merged West Side Federal Savings and Loan of New York and Washington Savings and Loan of Miami with Citizens, creating the largest federally chartered savings and loan institution with $6.8 billion in assets and 136 branches across three states. This interstate consolidation was supported by a $75 million capital injection from National Steel. In 1982, these branches were rebranded as First Nationwide Savings when National Steel sold a 19% stake to the public. Ford Motor Company subsequently purchased First Nationwide for $493 million in 1985.
National Steel also divested its computer data subsidiary Genix, which later became Corporate Election Services, a prominent provider of proxy statement and proxy contest services headquartered near Pittsburgh.
1990s
In 1991, the firm announced the relocation of its headquarters from Pittsburgh to the South Bend area in Indiana. By 1994, nearly the entire executive team was replaced by recruiting much of the management staff from U.S. Steel’s Gary Works, including V. John Goodwin as President. This action prompted legal proceedings initiated by U.S. Steel, which were resolved through an out-of-court settlement in 1995. Nonetheless, these leadership changes proved temporary; Goodwin resigned in 1996 due to disagreements with Japanese stakeholders, and by 1998 most former U.S. Steel executives had departed.
2000s
In 2000, the company became embroiled in a significant scandal when veteran executive James Squires was discovered to have accepted millions in kickbacks from scrap suppliers. Squires had been widely regarded as a self-made leader who rose from mill laborer to Senior Vice President over a span of 42 years. He was convicted in 2001 and sentenced to two years incarceration in 2002, along with an order to repay roughly $3 million to the company. Despite his apology citing frustration over promotion procedures, no Harvard MBAs had been promoted ahead of him at National Steel.
Following this controversy, the company suffered under poor management and filed for bankruptcy protection in 2002 amid an industry slump and ineffective leadership.
Bankruptcy
The company failed to recover long-term profitability and filed for bankruptcy in March 2002 with liabilities exceeding assets—$2.6 billion owed against $2.3 billion owned. After competitive bidding between AK Steel and U.S. Steel, National Steel’s remaining assets were sold to U.S. Steel in May 2003 for $850 million plus assumption of $200 million in debt. U.S. Steel continues to operate the Keewatin mining and pellet facility in Minnesota under the name Keewatin Taconite (Keetac).