August 25, 2024 at 1:45 a.m.
The 2023 headline in The Economist got right to the point: “The South is fast becoming America’s industrial heartland.”
The story began: “In popular perception, America’s heartland is its Midwest. Just look at where President Joe Biden has traveled for many of his big made-in-America speeches: Ohio thrice, Michigan twice and Wisconsin. But look at where the money is flowing, and a different picture emerges. It is the South–a region running from Texas to Virginia–that is fast becoming America’s new industrial heartland.
“The shifting of American factories has been years in the making. When Japanese and German carmakers started production in America in the 1980s and 1990s, most chose the South. They were attracted by a dearth of unions and generous subsidies.”
The trend benefited Arkansas in the 1980s and 1990s. The Nucor-Yamato steel mill opened in 1987 near Blytheville. The nearby Nucor Steel Arkansas mill began production in 1992 and expanded in 1998.
Things have sped up considerably in recent years. Nucor has spent $1 billion on upgrades in the northern part of Mississippi County since 2018. In the southern part of the county, a $1.3 billion Big River Steel mill between Osceola and Wilson opened in 2017 and underwent a $716 million expansion several years later. The mill known as Big River Steel II nears completion at a cost of $3 billion, making it the largest private capital investment in Arkansas history.
There are now almost the same number of Southerners employed in manufacturing as there are Midwesterners. And many of the so-called “green” investments being subsidized by the federal government are coming to the South. Think “green steel” in northeast Arkansas. Or a cleaner method of obtaining lithium (direct lithium extraction) in southwest Arkansas.
“The South also has cheaper electricity, owing partly to some states’ continued reliance on coal,” writes Dominic Pino of National Review. “And as has been true for decades, Southern states are right-to-work states. The Economist adds that Southern states are also attracting a better pool of labor as they gain population relative to high-tax Northern states. . . . America is a big place, and government encouragement to ‘make in America’ can be satisfied by doing all the making in the South.”
I’m walking into the Capital Hotel in downtown Little Rock for a breakfast meeting when someone calls out my name. It’s Dave Stickler, who’s in the capital city for a meeting with Entergy Arkansas officials. A year ago when I was told that I had a meeting in Osceola with Stickler, I began doing research. Up popped a 2019 story from Forbes with a headline that read “David Stickler: The Steve Jobs of Steel.”
Imagine that. The Steve Jobs of steel is now in Arkansas.
That’s almost as incredible as the fact that Arkansas has become the capital of American steelmaking. None of us could have seen that coming 40 years ago. When Big River Steel II begins operations later this year, Mississippi County will be the leading steel-producing county in America.
Stickler, who once ran Big River, is Arkansas’ biggest cheerleader. In that 2019 article, Forbes called Big River “hands down the most technologically advanced and fastest-growing steel producer in North America.”
Stickler, a Cleveland native and former accountant, spent 15 years as an investment banker. He specialized in financing steel mills. One of the people he worked with was John Correnti, the Nucor chief executive officer who earlier fell in love with the workforce in Arkansas. Correnti and Stickler became business partners in 2003, raising $6 billion for various projects.
They chose Mississippi County for Big River. Scrap metal can be shipped on the Mississippi River for recycling at mills. Big River is also close to Interstate 55 and the BNSF rail line. The state offered incentives, and Entergy made a deal on power rates. About 13 months into construction of the first Big River mill, Correnti died in his sleep. Stickler was now in charge.
Stickler was on the verge of taking Big River public when “the knock on the door” came from U.S. Steel.
“They bought 49.9 percent of the company and had four years to buy the rest of it,” Stickler told me. “They exercised that option in less than two years and then announced that they were going to build another mill. We’ve seen $8 billion in investments in Mississippi County in just the past decade. You just can’t beat the work ethic here. We can train people how to make steel. What we can’t train people to do is have a work ethic.”
Stickler could have moved on following the U.S. Steel purchase of Big River, but he wasn’t ready to leave Arkansas. Stickler formed a new company, Hybar, and began construction last year on a 1,300-acre site at Osceola. The mill will produce rebar (a sustainable steel reinforcing bar) and use almost 100 percent solar energy. That will make it the most environmentally friendly rebar producer in the world.
Construction costs will be close to $1 billion, and Stickler predicts there will be more Hybar mills to come.
At the time he announced the creation of Hybar in 2022, Stickler said: “My team and I have had great success investing billions of dollars in Arkansas over the past eight years. Arkansas is a great place to conduct business, especially steel business. I’m pleased that after conducting a multi-state site search that we are able to make this announcement.”
Rebar made at the mill primarily will be used in large infrastructure projects. Stickler said Hybar “will not compete with our customers by also fabricating the rebar we produce. We will let others do what they do best, which is fabricating and installing the rebar Hybar produces.”
In addition to reducing the amount of energy needed to produce rebar, Hybar’s technology will limit greenhouse gas emissions. Hybar expects its emissions to be the lowest among all North American steel mills.
Stickler said he will consider putting additional mills in Arkansas because of “the kind of support we get from every level of government. This is now the heart of the U.S. steel industry. It’s not Pittsburgh. It’s not Detroit. It’s Mississippi County. South Mississippi County soon will be home to the three cleanest steel-making facilities in the world (Big River I, Big River II and Hybar).”
Stickler has become involved in improving public education and quality-of-life amenities in northeast Arkansas to ensure that workers at the region’s mills live there rather than commuting.
As we sat in an office on the downtown Osceola square last year, he told me: “There’s an opportunity to change the trajectory of this place. It’s not going to happen overnight. I know that. But we also don’t need to have patience. We need to go, go, go while the momentum is here. We must convince young people in this area that once they land one of these steel jobs, they will have an employer for life.”
In a 2022 podcast for the Arkansas Economic Development Commission, Stickler said: “We find the young professionals who have grown up working on their computers, iPads and cell phones. They’re computer literate. When I was on Wall Street, steelmaking was 80 percent brawn, 20 percent brains. Now it’s 90 percent brains and 10 percent brawn. . . . I remember the first steel mill I went through on the south side of Chicago. I had to hold my nose. When I walked out, my work boots were filthy black. My hands were covered in soot.
“You come to Big River Steel, you don’t see any of that. It’s a completely different environment. And the new U.S. Steel investment is going to be even one step above that. . . . Please rest assured that I would not hesitate to make another very large investment in Arkansas given the opportunity.”
With the creation of Hybar, the Steve Jobs of steel was true to his word.
Rex Nelson is a senior editor at the Arkansas Democrat-Gazette.
