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Wasp Works Its Will on a Captive Spider By Nicholas Wade   |   Coraopolis, Pa., Steel Company Rebuilds Itself under New Leadership
Coraopolis, Pa., Steel Company Rebuilds Itself under New Leadership
Jul. 23--In the early 1990s, one of the most fabled names in the construction industry seemed destined for obscurity, if not oblivion.

Once the world's largest steel fabricator and builder of landmark bridges and skyscrapers around the globe, American Bridge Co. fell on hard times. Weak construction markets and stiff competition had been eating away at sales that had been eroding even before it was spun off from USX Corp. in 1987.

This year, as it celebrates the 100th anniversary of its founding, the company is enjoying a quiet resurgence.

Signs of the upswing include a sixfold increase in sales since 1994, last year's re-entry into the steel fabricating business and last week's dedication of a splashy new headquarters on the bank of the Ohio River in Coraopolis.

Another milepost in the offing: The new fabricating plant, which sits alongside the company's headquarters, already is slated for an expansion that will nearly double its size and add 50 jobs to a local work force of nearly 200.

"We have a big backlog [of orders]. We're in good shape," said Bob Luffy, the company's president and the executive who initiated the turnaround.

When Luffy was recruited to American Bridge in 1993, that was far from the case.

"We had about a three-year window where, if we weren't successful, we'd have been gone."

Almost from the time the company had been severed from USX, it had racked up losses. It had been taken over by passive investors and had been through three presidents, before Luffy, since the spinoff.

Construction markets remained weak and, because its fabricating facilities had all been sold or closed by USX, it was at a disadvantage to many competitors, who assembled the steel needed for bridges and buildings before erecting the structures at the job sites.

"We found ourselves frozen out of jobs," Luffy said.

The biggest advantages American Bridge still held were a golden name and an archive of drawings from projects that dated back to its founding.

Despite the company's much diminished state, Luffy found the name's cachet still opened doors. He said he could call on industry titans to explore joint ventures "and get right through" to their CEOs "because I was the president of American Bridge."

It's little wonder that the aura of the company was undiminished.

American Bridge was put together by financier J.P. Morgan in 1900 through the merger of 28 of the nation's largest iron and steel fabrication and construction companies. A year later, it was consolidated into U.S. Steel Corp., the predecessor of USX that Morgan formed when he acquired Carnegie Steel from Andrew Carnegie.

The work of the companies that were knitted together to form American Bridge dated back to the late 1860s and included the Eads Bridge, also known as the St. Louis Bridge, the first steel span across the Mississippi River.

At its formation, American Bridge controlled 90 percent of the nation's commercial and public construction market. In 1903, Morgan commissioned a manufacturing plant to match. The world's largest steel fabrication was built in Ambridge, a town named for the company and situated just a couple miles downriver from the site where American Bridge's new facilities now stand.

As the years went by, American Bridge put its stamp on world-famous construction projects: It built the gates for the Panama Canal. In the 1920s and 1930s, it built the Chrysler Building in New York and the San Francisco/Oakland Bay Bridge. In the 1940s, it built the the Rock Island Centennial Bridge, a five-arch span over the Mississippi at Rock Island, Ill. and threw itself into the war effort. At Ambridge alone, it built 119 landing ship transports, the vessels used to land soldiers at Normandy beach. At the time, the fabricating plant's ship building operations employed 10,000 workers.

With the 1950s and 1960s came New York's Pan Am Building (now known as the MetLife building), the Tappan Zee Bridge and the Unisphere at the New York World's Fair. Later, American Bridge would spin the four 36-inch-diameter cables for New York's Verrazano-Narrows Bridge. The cables weighed in at 38,000 tons, a record.

For those involved -- from the engineers to the ironworkers -- bridge building and erecting skyscrapers was romantic work, though often fraught with danger.

"Back in the 1950s and '60s, it was like playing for the New York Yankees," recalls Jack Bryce, 75, a retired American Bridge engineer who still consults on some of its projects.

As a young field engineer, "You went home at night and you looked back at something you'd done that day and it was something that wasn't there the day before. It was a great feeling," he said. "It was a heck of a sound hearing the pins go in & the banging when the pins go in to put in that last [steel] member. It's inspirational."

At the time, work in the field also was more grueling than it is today, said Luffy, who spent the first five years of his career at American Bridge, maintaining a home in Pittsburgh but living out of suitcases in 13 different places.

And though iron-working is still dangerous and dirty, it's less so now because of tougher occupational safety and health regulations, Luffy said. "When I started, hardly any of the old ironworkers had 10 fingers or 10 toes. They were pretty banged up." Nor were there many major projects that didn't result in some kind of significant injury or death.

Through the 1970s, construction markets continued relatively strong. However, by the end of the decade, nonunion competitors in the South and Southwest as well as offshore competitors were gaining increasing shares of the steel fabricating business.

American Bridge and some other old-line companies were beset not just by higher labor costs, but by inefficient fabricating plants they'd failed to modernize.

U.S. Steel began slashing the division's fabricating capacity in 1979 -- shutting down more than a dozen plants and laying off some 12,000 workers. Concessions at the 11th hour spared the company's largest plant in Ambridge.

In 1981, U.S. Steel split American Bridge into three pieces, separating engineering, construction and fabricating.

By 1984, the sprawling Ambridge plant, whose work force had dwindled to 1,000, was shut down and U.S. Steel went on to close or sell its remaining fabricating plants.

In 1987, what was left of American Bridge was sold to its then-president, Brock Rowley.

A little more than a year later, Rowley sold the business to Continental Engineering Corp., owned by Taiwan's Ing family. The Ings still control American Bridge, but have sold a 20 percent stake to management.

The late 1980s and early 1990s proved withering years for American Bridge.

When Luffy was appointed in late 1993, the company was heading into the next year with no backlog of orders.

Sales in 1994 were $32 million -- an amount that American Bridge, at the height of its business, might have generated from a single job.

Construction markets were weak and, because it lacked fabricating capacity, the company was relegated mostly to subcontracting. Taking on an entire project without the ability to fabricate left it too vulnerable to the pricing of the steel, Luffy said.

After all, American Bridge, under the ownership of its old corporate parent, was a conduit for huge sales of steel. The more tonnage a project required, the more the company sought it.
American Bridge now focuses on low-tonnage jobs, but ones where skilled fabricating and engineering are critical, Luffy said. It also seeks jobs on which it can serve either as general contractor or prime contractor, he said.

That strategy, plus a resurgence of federal funding for road and bridge repairs that began in 1997, have helped turn the company around.

American Bridge's sales hit $148 million last year and are on track to hit $185 million this year. For next year, Luffy projects sales of $210 million.

Much of the company's work has been bridge repair, in some cases on structures whose original engineering drawings remain in American Bridge's archives.

In addition to the advantage of having the drawings, the company, on occasion, has been able to recruit as consultants some of the American Bridge retirees who worked on the original contracts.
Luffy said he expects the boom in bridge and other infrastructure repair to last at least another five years.

But American Bridge has been diversifying for the day when that market cools. Among other things, it has branched into marine proj-ects, primarily port facilities construction for private sector clients.

In addition to expanding its Coraopolis fabricating plant, the company also is hoping to build two others, likely on the West Coast and in the South.

To continue its expansion beyond that, American Bridge, which now employs about 400 companywide, will probably need to go public at some point, Luffy said.

In the face of the comeback, the CEO shakes his head to think "we were almost extinct."

Ridder/Tribune Business News.

Articles like this makes me so proud of the global market and capitalistic economies.  Many (lame ass liberals / socialist / communists) believe that capitalism is bad, but if you are really to take a good look at all the key elements within the philosophy of capitalism, it is absolutely the most beautiful concept in the world.  I can't even begin to articulate the beauty behind the intricate positive relationships involved in competition and the international arena.  Ayn Rand argues this point in Atlas Shrugged, my current (and only) summer reading venture, and when I finish that extremely long novel, I will present my perspective on these issues.