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May 1, 2007

NO MORE UGLY DUCKLING

The metals industry may have returned to prosperity, but its reputation could use a boost, especially among prospective young managers.

When it comes to young people, including engineering and business students at the nation’s top universities, the metals industry has a serious image problem.

“Many people still perceive metals as an old, dangerous industry shown in the movies, where they see workers shoving iron ore, coke and limestone into open furnaces,” says John Schmitt, vice president of purchasing for New Jersey-based service center Denman & Davis. “But the reality is that steelmaking is all about new technology,”

Objectively speaking, the metals business has a lot going for it when it comes to new hires. The industry is cleaner today than ever. Salaries lag the top technology and financial companies, but often exceed many glamour industries such as entertainment, publishing and retailing. After years of consolidation, the industry is more stable and better financed. With a generation of Baby Boomers expected to retire over the next decade, the field is wide open to newcomers.

Yet to attract the Millennial generation, the metals industry has to market itself better and upgrade its presence on college campuses. “In today’s world, it really doesn’t matter if you are actually the ugly duckling or not; it’s just how you present yourself,” says Kushal Gandhi, who graduated last year with a master’s degree in engineering from Northwestern University in Evanston, Illinois.

To Wine and Dine?

Gandhi—who considered metals during his job search last fall and whose family members worked in heavy machinery in India—says he instead opted for financial services, where “you get to sit in a small, little cubicle with a nice, cool, clean atmosphere and let your brain work better,” he says.

Finance and technology companies were quick to get his attention with a taste of the corporate culture high-life. “There were pre-dinners, socials, stays at the best of hotels with pickup and drop-off limo service. We had arrived in the big playground,” Gandhi says. In contrast, his recruiting experience with metals companies was straightforward and “as simple as you can imagine.”

Sophisticated recruiting by the metals industry largely ceased two decades ago. “Metals dropped off the face of the Earth and never really recovered,” says Mark Savage, director of engineering cooperative education and career services at Cornell University, Ithaca, New York. “Out of sight is out of mind. Students are not getting much exposure to what the industry is all about, and this is converted to a negative perception. The less educated you are about a subject, the more you’re likely to come up with stereotypes that are incorrect.”

Of a class of 25 to 30 materials science and engineering students at Cornell, two might be interested in metallurgy, he says. “A lot of students are looking at biomaterials as the up-and-coming, sexy way to go.”

Good Pay, Open Field

Old images die hard, but technology has made the metals industry cleaner and more efficient. It reaches into every corner of the industry, from chemical analysis, to measurements on the shop floor, to adding purchase orders and updating inventories.

Take for example, Earle M. Jorgensen Co.’s Kasto system in Schaumburg, Illinois, an automated retrieval system that pulls, bundles and tags orders. The $34 million system paid for itself within two years. As a result, EMJ can handle more orders and meet the needs of customers, says Tony Granata, director of plant operations. “We can push the envelope with input and output.”

Investment has reduced pollution: Since 1975, greenhouse gas emissions per ton have been reduced by approximately 45%, and air and water emissions from steelmaking are 90% lower than 10 years ago in North America, data from the American Iron and Steel Institute (AISI) shows.

At the same time, technology has dramatically reduced the man hours needed to produce a ton of steel—down to an average of two hours currently from 5.5 hours 20 years ago and 10 hours 30 years ago, AISI data shows.

A career in metals management can be lucrative, too. The average salary of a senior position in metals manufacturing exceeds on average $130,000, MSCI’s 2005 senior management compensation and benefits survey shows.

Though the pay is competitive, few students seize the opportunity. A postgraduate exit survey of about 2,300 Cornell students from the class of 2005 shows that a small percentage—3.7%—chose to go into manufacturing of any kind. They earned a mean salary of $51,185 a year, making manufacturing the second-highest earning group topped only by technology, in which graduates reported a mean salary of $59,970. Manufacturing salaries even beat the two most popular fields: financial services and general business, representing 30% of respondents combined. It also topped first-year salaries in popular fields such as retail, biotechnology and pharmaceuticals, law, communications and insurance.

The good news is that there is plenty of opportunity. Ryerson Inc., for example, recruits in sales, purchasing and IT for positions with management potential. An entry-level inside sales associate earns $30,000 to $34,000 a year, says Laini Fluellen, corporate recruiting manager for the Chicago-based metals distribution company. They can earn quarterly bonuses based on sales and company performance, she adds.

“We have a large Baby Boomer workforce, and the new demand is forcing us to look at college students even more so and to bring them in to train and learn from those who will be retiring soon,” Fluellen says.
Consolidation during the past decade has also set the tone for a bigger and better-financed industry that can withstand the ups and downs of the market, making it more attractive to job seekers. But because metals companies may not initially get the same attention from students as companies with bigger brands, they need to gain a better understanding of what students look for in their careers.

“At job fairs, it can be pretty slow,” says Fluellen, who coordinates recruiting events throughout colleges in the Midwest. “We might get 300 resumes, while a company like Coca-Cola might get 700 to 800 resumes. We have to pull students in and let them know about the opportunity.”

A low-cost way to improve the metals industry’s image is to bring in college sophomores and juniors through summer internships and acquaint them with the business, says Stan Broome, manager of corporate relations at The Georgia Institute of Technology in Atlanta. For an internship to be successful, companies need challenging assignments, says Broome who works to bring recruiters to campus. “You can’t just have them make copies or file,” he says. “If you expose them to upper [level] executives, they’ll see the type of dynamics and then come back and sell the company to classmates. There’s nothing like having a student come back excited and say, ‘Wow, these things they’re doing are dynamic and exciting.’”