It’s not easy finding a silver lining when your productivity is negative. Especially when it’s -4,053.8%.
Of the 2,500 public companies ranked to create the Underground Reporter 500, the bottom 20 have the dubious distinction of being the worst managers of information in the U.S. The company with the lowest rating is Weirton Steel, the troubled, employee-owned metal products maker.
Now known as ISG Weirton, the Weirton, W. Va.-based company, like other integrated steel mills, has been in and out of bankruptcy despite strategic technology investments.
Indeed, a few sectors—manufacturing, media and entertainment, energy and technology—dominate the Bottom 20 list. Poor performers, though, even include contract electronics manufacturing giant Solectron Corp. (No. 20).
Each company has its own information management history and, in some cases, woes. Manufacturers such as ISG Weirton, Stillwater Mining (No. 2) and Kaiser Aluminum Corp. (No. 5) operate on tenterhooks in rapidly contracting industries. So do services firms like American Tower Corp. (No. 3).
Weirton Steel tried to make information management a competitive advantage but failed. In 1998, it launched the first online steel and metal marketplace, MetalSite (originally MetalExchange), with investment from industry heavyweights LTV and Bethlehem Steel. A year later, Weirton sold a little more than half its stake for $180 million—more than 10 times its original investment. Nine months later, however, MetalSite closed and was eventually sold to Management Science Associates, which revived the site. “It was impossible to get others to fund it with three of the investors in bankruptcy,” says Patrick Stewart, Weirton’s former chief information officer.
Stewart attributes Weirton’s productivity gains to factory-floor automation that began in the late 1980s with an integrated manufacturing information system. But that wasn’t enough to overcome “legacy health-care and pension costs that had built up over 100 years,” he says.
In May, International Steel Group purchased Weirton Steel’s assets for $284 million and renamed the company ISG Weirton. The new firm outsources much of its information systems to Hudson Global Resources, a division of New York-based Hudson Highland Group.
Underground Reporter 500: The Bottom 20
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