Mini-Mill Operator Nucor Is a U.S. Steel Success Story : Manufacturing: The low-cost, non-union firm gives its workers bonuses in good times, doesn’t lay them off in bad.

Mike Wiggins says one of the best decisions he ever made was to trade in a two-piece business suit for a flannel shirt and jeans at Nucor Corp.

“Last year I made $55,000 without working any overtime,” said Wiggins, who joined the steelmaker five years ago. “Before I came here, I owned my own car dealership, but I never made $50,000 in a year.”

Many more Nucor workers are equally satisfied.

Nucor, which is based in Charlotte, N.C., and operates so-called mini-mills in eight states, says turnover is almost non-existent at the Darlington mill where Higgins works, and low elsewhere. The company rewards its 5,500 non-unionized employees with lucrative production bonuses and stock plans and has avoided layoffs for more than 20 years despite tough economic times.

“Our motto is, ‘You may only work two days a week, but you won’t get laid off,’ ” said James McDonald, a chemical laboratory technician who has been with Nucor for three years.

Nucor also believes that workers should “share the pain,” which means everyone--from Chairman F. Kenneth Iverson down to the newest employee--profits when the company is doing well and loses when it’s not.

Iverson is not reluctant to talk about his personal stake.

“During the last recession, my salary dropped from $450,000 in 1981 to $108,000 in 1982,” he said.

In fact, bad economic times hurt management more than blue-collar workers.

“If a plant is only operating four days a week, their (blue-collar workers’) take-home pay drops about 25%,” Iverson said. “A department head will see his commission drop 35% to 40%. Officers can see their pay drop as much as 60 to 70%.”

Wiggins, who monitors the grades of steel being produced at the Darlington mini-mill, said his income fell about $5,000 in 1991 from the previous year.

But he remains confident of future increases. “We love our work, but we really love the bottom line,” he said.

Nucor, the nation’s sixth-largest steel producer, earned $64.7 million, or $3 per share, last year, down 14% from 1990. Sales were flat at nearly $1.5 billion.

For the first quarter of 1992, which ended April 4, Nucor earned $16.2 million, or 75 cents per share, up more than $2 million from the same period a year ago. Sales rose 11% to $388.4 million.

Nucor’s profits are in sharp contrast with the losses sustained by many other U.S. steelmakers because of eroding world prices.

Nucor has managed to stay ahead in part because of flexible work rules, which allow it to temporarily idle any of its 22 steel mills and plants, and non-union labor.

Its mini-mills also are less costly to run. Mini-mills, which emerged after World War II, start with scrap, as opposed to iron ore, that is melted in relatively small, cheaply operated electric furnaces.

“When we fall on bad times, we can lower our prices and still make money,” Iverson said.

The company’s good fortune hasn’t gone unnoticed by Wall Street.

Its stock has risen steadily in recent months, with shares trading in mid-June on the New York Stock Exchange at around $106 from a low of $71.37 1/2 six months ago, before a scheduled stock split.

“Nucor’s record of seemingly unstoppable growth is not only unique among steelmakers but is scarcely matched by any basic industrial company,” Barbara Crehan, an assistant vice president with Merrill Lynch & Co., said in a recent report.

Crehan noted that Nucor’s profits have grown by an annual rate of more than 23% the last 20 years. She predicted steady growth for the years ahead, including per-share earnings of $3.50 for 1992.

“We expect that by 1997, in a decent economy, Nucor’s earnings power could be about $10.50 per share,” she said.