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Correnti speaks to county mayors about Big River Steel

Wednesday, March 20, 2013

John Correnti visited with Mississippi County officials Tuesday at the Delta Gateway Museum.
John Correnti visited with Mississippi County officials Tuesday regarding his upcoming Big River Steel project. At the regular county mayor's meeting, which was held in Blytheville at the Delta Gateway Museum, Correnti said that he did not blame Nucor for their recent "saber-rattling," but that the project is moving forward, pending an upcoming vote by Arkansas legislators on Amendment 82 funding.

"It's deja vu for me, being back in Mississippi County," he said, giving a brief history of how the creation of the Big River project came about -- with a visit he received from a group of investors who wished to get into the steel business.

"It's a beautiful site in Osceola," he said of the MissCo SuperSite, where the project will ostensibly be located. "Blytheville and Mississippi County made my career back in '86, and it was so successful that we ran everyone out of the beam business. That wasn't done by me, it was done by the farm boys and girls in Mississippi County -- I have a warm place in my heart for this area."

The site's location on the Mississippi river is integral to the project, he said.

"The river is important because freight is so important in the price of steel. To transport scrap metal, it costs around $40 a ton by truck, $12 a ton by rail, and only $4 or $5 a ton by river. This location makes Osceola steel heaven," he said.

Regarding the progress of the project, Correnti said that it is moving apace, but that nothing is guaranteed until construction begins.

"In football terms, we're currently on the 15 yard line," he said. "When the legislators do their thing next week, then we'll go to the ten yard line. Next will be the environmental work -- there should be no problem there since it was all done once before, the last time we looked at the site, this is just a re-affirmation. We should have a construction and operating permit by the end of April, then the debt financing work begins. This project is going on with $350 million in equity and the rest in debt, financed by a big German bank. We're looking at breaking ground sometime between Labor Day and Thanksgiving, but things can always go astray. If any investors pull out, they have to be replaced -- if it's a $2 million investor I can replace them in a day, but if it's a $100 million investor, that could take a few months -- this is a consortium deal. I don't expect any problems and I would bet any amount of money that the project will go forward, but you can't be sure of anything until you see me and the county judge and others cutting a ribbon."

Addressing the issue of Nucor's recent attempts to fight Big River in Little Rock and at home, Correnti said that it was "like the elephant worrying about the flea," since Nucor's production will still be far larger than Big River's.

"The United States consumes 130 million tons of steel a year, and we can currently only produce 110 million, so that 20 million is coming in from overseas," he said. "Big River's product will overlap around 20 percent with Nucor's. We could make 100 percent of what they do, but we aren't going to -- it's like farming, you don't want to plant what everyone else is planting. They don't want a competitor, but look at what was recently said regarding Mississippi and the auto industry -- there are multiple competitors in production there -- that's capitalism. This is not going to cause Nucor to shut down, and I'll be sarcastic -- hey, if it does shut them down, I'll get some people in here to buy it. The plant is 25 years old, but they will still be producing more than Big River. But I guess if they're not shooting at you, then you're not doing something right."

He went on to address questions regarding the promises he has made regarding potential employee salaries.

"I wouldn't promise $75,000 a year if I wasn't sure I could do it," he said. "Rural America is the greatest untapped resource for good labor in the world -- these people will out-produce, out-work, and out-think workers from anywhere else in the world. Workers at this plant will exceed that $75,000. This is an opportunity for young men and women to work hard and make a lot of money. Nucor is scared of me because I know the combination to the lock-box -- that you treat your employees with kid gloves, not just lip service. People are going to be proud that they work for Big River ... we're doing this to make money, of course, but we're doing it in Osceola because we can make more here. I've seen the work ethic in this area ... the whole philosophy is we put guys into business for themselves -- it becomes a self-policing system."

Regarding a residency policy for managers at Big River, which had previously been mentioned, Correnti said he will require them to live in Northeast Arkansas, but suspects that a few will choose to live in Jonesboro rather than Mississippi County because of previous ties to the area. He referred to a "mistake" he made during his time at Nucor when he allowed higher level employees to live in Dyersburg, and said that all Big River management will live in-state, in Northeast Arkansas.

Legislators in Little Rock are currently considering the Amendment 82 vote. County economic developer Clif Chitwood told the CN Tuesday afternoon that he did not believe an actual date for the vote had been set, but that he believed the Speaker to have said that when it is scheduled, he didn't see a problem with the funding going through. Currently being considered is a consultant's report on the project.


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