In a story published Sunday, the Blytheville Courier News reported that Nucor Steel Arkansas sent a memo to members of the Arkansas senate and House of Representatives earlier this month detailing why the company believes the construction of the Big River Steel mill in the state would negatively impact both Nucor and the state of Arkansas.
In an excerpt from the memo published by the news outlet, Nucor says it believes that the development of the Big River flat rolled steel mill will drive up Nucor's cost of raw materials, energy, labor, railcar and truck transportation. Additionally, it could reduce Nucor's operating rates, therefore decreasing its employees' pay. Nucor adds the Big River Steel will be a direct competitor of Nucor's Arkansas mill and Big River will "make 100 percent of the product line made by Nucor Steel Arkansas."
Further, Nucor said that "there is no room in the current market for additional steel capacity" and the US sheet steel industry has already been running at a low rate of capacity utilization for over four years now. The memo goes on to say: "help us understand how you can be backing a competitor when we have been in Arkansas for 25 years, have poured $2 billion of direct and indirect taxes in the state treasury, have brought many customers and corresponding manufacturing jobs to Mississippi County, and have been a good corporate citizen to the state and to Northeast Arkansas."
The Blytheville Courier reports that after Big River Steel learned about the letter, it submitted a rebuttal on March 12, which said: "Nucor's memo appears to be an attempt to influence the upcoming vote on the Amendment 82 legislation by threatening to shift production and jobs out of Arkansas if the legislation passes. Given the memo's tone, it almost seems as if Nucor believes that it should be the only company allowed to produce steel in Arkansas."
Big River said that it would not engage in a "public media campaign or lobbying effort in an attempt to influence legislation," but said: "With regard to the claim that Big River Steel will have 100 percent product overlap with Nucor Hickman, with all due respect to Nucor, Big River Steel is not spending $1.1 billion to compete with a mill that was built more than 20 years ago. Notwithstanding Nucor's continuing attempts to gain access to Big River Steel's sales and marketing plans, it is clear that Nucor does not know what Big River Steel's product capabilities will be in either phase one or phase two. Big River Steel would like to keep it this way."
Throughout the remainder of Big River Steel's response, the company either refuted some of Nucor's claims or refused to comment on certain aspects of Nucor's memo.
John Correnti, former Nucor CEO, is the CEO of the proposed Big River Steel mill.
