A Publication of WTVP

Thomas J. Glaister joined Keystone Steel & Wired Co. in January 1997 after a career at Lukens, Incorporated, a $1.1 billion Fortune 500 steel company in Washington, Penn.

A native of Natrona Height, Penn., and from a steel family background, Glaister earned his bachelor’s degree in electrical engineering from Gannon University.

He joined Lukens as a technical assistant in 1974 following graduation from Drexel University, where he received his master’s degree in business administration with a concentration in industrial relations.

In 1989, after a series of promotions leading him to director of human resources, Glaister was tapped to run a small struggling Lukens unit. Within five years he had improved operating earnings more than tenfold.

Shortly after Lukens acquired Washington Steel in late 1993, Glaister was appointed general manager of the Washington operations. After the merger of Washington and Luken under one corporate umbrella, he was appointed to the newly created position of general manager of logistics.

Glaister and his wife Tricia have a son, Brian, who will graduate from high school in 1999.

How long have you been in the steel industry?

This will be my 24th year in the steel industry. But it’s always been a part of my life. My dad was a steel worker…a ladleman for Allegheny Ludlum. His father and his brothers all worked for Allegheny Ludlum. I worked in the steel industry during the summer while I was in college. My one brother is in the steel industry in Indiana. So far, the only members of my family who’ve escaped are my two sisters. One’s a nurse and the other’s a college professor.

What made you go into the industry in the first place?

When I came out of graduate school, I had a number of job offers, one of which was Lukens Steel. I took that offer because I like the steel industry – the size of it, and the hot, fiery scope of it. If you’ve ever seen hot, molten metal poured or stood beside a ladle that weights 150 tons, you’d know what I mean. It gets into your blood.

Why do you think Keystone hired you to lead the company? What unique strengths did you bring to the table?

I believe the key thing I was hired to do was build a team. I’m a generalist with a background in operations and general management. After fourteen or fifteen years at Lukens Steel, I got an opportunity to run a company called Simplicity Engineering that manufactured industrial equipment in Michigan. I subsequently ran another company (Ludlow-Saylor, near St. Louis) that made woven wire cloth. I had general management and P/L responsibilities for those two companies. I then went back to Washington Steel in Washington, Penn.

So if you look at my background, I’m not a metallurgist and I don’t have a sales background. I’m the generalist who was brought to Keystone to build a team.

How do you go about building a team?

The first thing you do is develop a vision, you put together a plan to communicate that vision to all levels of the organization, you organize the company so that you have the strongest possible team in place, set goals and objectives with a strategy for achieving them, and then start all over again with a new vision.

The success or failure of the company will be a function of that team’s effort, not mine. They’re what will make or break this company.

You make team building seem almost simple. Is it?

It’s not always easy. But it is the most exciting thing in the world, at least for me. Particularly so if you can put together a team that hasn’t functioned as a team in the past, and wasn’t as successful as it should have been, and, over a period of time, takes that company from mediocre to superior.

What you come into a company like Keystone, you have to build the team primarily with the talent that’s already in the place, right?

That’s the first step. The key is to preserve what’s good about the company while introducing the change that’s necessary to make it even better.

It is absolutely essential that the team operates as a team. You simply cannot optimize the whole by optimizing the parts. You can have strong managers in each of the individual functions, but as long as they’re trying to optimize only their own function (which is what happens in the absence of a team approach) you’re never going to be as successful as you could be with a team.

I believe Bob Singer (currently CEO of Keystone Consolidated Industries), who hired me, clearly understood the need for team building and I believe that’s what he worked for in his search. Singer demonstrated his full support of the process by giving me the freedom I need to get the job done.

Did you come to Keystone during an upswing or downswing?

I think I came in just at the right time. The company had long suffered from an under-funded pension plan that kept the company from making capital investments to modernize and expand. Once that pension problem was solved, everything else was lined up and fell into place.

How was the pension plan problem solved?

It was solved in 1996 when Keystone merged with DeSoto (in Joliet), which had an over-funded pension plan. The merger allowed Keystone to go forward with an over-funded pension plan.

Once the pension plan issue was solved, what sort of things “fell into place?”

In very quick order we had consultants come in to help us decide which capital projects we should pursue to rebuild our steel making operation. And in December 1996, we started modernizing with a succession of five major projects.

We rebuilt the #2 electric arc furnace, we converted the #1 furnace to a ladle refiner, we installed an automated coil handling and packaging system in our rod mill, and we installed a new galvanizing frame in our Mid-Mill. The centerpiece of the capital plan, the installation of a new six-strand billet caster, began in September.

We also have new high speed drawing machines coming in and we continue to upgrade and modernize our wire galvanizing operation.

So solving the pension plan was the first step and the capital plan was the second step. What was the next step?

A debt offering to raise the capital. This past summer we basically sold $100 millions in industrial bonds, which put us in a really strong financial position to complete the capital program.

We’ve already initiated our fourth step, which is an acquisition strategy. Late last year we acquired the 80 percent that we did not yet own of a company called Engineered Wire Products, and we’re actively exploring several other acquisitions at this time. So things are happening very quickly.

Do you see the future looking bright for Keystone?

Absolutely. Now that we’re capitalized and working as a team, we’re looking to bring some people into key area that we simply can’t fill from the inside.

What’s your plan for making Keystone grow? Will it be new products? New markets?

Keystone’s growth will be in three steps. The first step was to get our annual steel making capacity up to 800,000 tons, which we’re doing through the capital improvements.

The second step will be to put as much of that 800,000 tons of capacity as we can into value-added products – industrial wire and fabricated wire products. And we’re doing that in two ways: expanding our wire-making capacity here in Peoria, and growing by acquisition.

Even though we may acquire companies that are outside the area, all of the rod, which is the raw material for the other wire-based operations, will continue to be made here. So that’s still good for Peoria.

The third part of our growth strategy is that we’re currently studying the feasibility of raising the steel mill’s annual output to 1 million tons from 800,000 tons. So we would grow simply by increasing our capacity.

As one of the area’s major employers, do you find any particular job skills lacking in the work force?

Not lacking, just hard to get. And the skills that are hard to get are the same skills that are hard to get in any other part of the country, such as information technology and maintenance people, both supervisory and hourly. Electricians are extremely hard to locate, and so are people with specific skills regarding the melting and wire-making operation. Those are very special technical skills that are hard to find no matter where you are. And I would emphasize that our people needs are both salary and hourly. It’s as hard in today’s environment to find a good electrician as it is to hire a superintendent for your melt shop.

Does Keystone have entry-level jobs for young people right out of high school?

Sure, but in the short term, as we invest capital, the number of jobs available will be reduced. For a short period of time, possibly into 1999, the number of employees at Keystone will shrink. It’s our hope to absorb that through retirements, since we have a somewhat older workforce. We feel as long as the economy stays strong, we’ll be able to make the necessary reductions through attrition.

Do you think your work force will ever expand? When?

Definitely. We believe there will come a point where our growth will require that we hire not only to replace the attrition, but in excess of it. That should probably begin in late 1999 as we fully develop and implement the plan to go to higher tonnages.

The other thing that could lead to an expanded work force would be our desire to build our growth in value-added products, which increases the labor content along with the revenue. So the more value-added products we produce, the greater will be the demand to grow the work force.

Basically, we will go through a short-term period of contraction, followed by an expansion of the work force as a result of growth.

How does Keystone’s working relationship with Independent Steel Workers’ Alliance compare with other union situations you’ve been involved with?

It’s a good a relationship as I’ve experienced up to now. I’ve had associations with operations that were organized by the United Steel Workers, and the plant I ran in Michigan was organized by the United Auto Workers. This is a very good relationship.

What makes it so?

I think there are a number of things. Probably the most important is the independent status of the union. It means that the issues that come up are important to the people at Keystone – to people at the local level. There are no international agendas that may or may not be important to people at the local level. I think that is by far the biggest benefit.

What’s your management philosophy?

Actually, it’s very simple. You need to get people to work together…harder and smarter. Having done that, you’ll achieve profitable results.

Then, through profit sharing, you distribute a part of the company’s earnings to everyone who worked hard together to achieve success in the first place. That motivates the process to begin again, so what you have is a never-ending cycle of improvement…continuous improvement.

Was there a mentor who helped shape that philosophy?

Absolutely. His name was George Stroman and he was the second superintendent I worked for at Lukens. I had my first line job – as general foreman – working for him. He was a seasoned veteran and he took a lot of time to help me develop. He spent time encouraging me and advising me. He always led by example.

But the key thing he taught me was that success and happiness are functions of using your strengths. You always have to develop your weaknesses, but the most important thing is to get yourself in a situation where your strengths are what’s required.

He also taught me the value of a team, after learning it the hard way, himself. When he first joined Luken, he always had to “do it himself.” He was really only comfortable with his own way of doing things; his own capabilities. As a result, in order to achieve success, he literally worked himself into the ground and had a heart attack.

I remember him telling me that it took that catastrophic event in his life for him to come to the understanding that one person can’t do it all. And the George Stroman I learned from was a very different guy. He’d already had his heart attack.

He still worked very hard, but he directed all that hard work toward building and developing a team, rather than trying to do it himself. As a result, he ended up not only healthier and happier, but also much more successful.

You’ve been at Keystone a little over a year now. Do you think the people in the mill recognize you when you walk through?

Not always, but I do get out in the plant every week, usually in the evenings because I have more time, but also during the day. I want to get out there and get around to all the areas and meet all three shifts. My job normally takes me our to the plant during the day, but I’ll also go out for a second shift, and it’s not uncommon for me to go out in the plant after midnight and stop and visit for a couple of hours.

Is that because you’re a night owl?

That’s part of the reason. But even if I weren’t, I’d go in early in the morning to be able to see that third shift. If you want to form a team, you need to spend time with them.

Do you think that the people who work for you understand how important the team approach is to you?

I think they’re beginning to. In all fairness to them, we have to realize that it’s a very hard thing that I’m asking them to do.

It’s a hard thing to ask someone in the manufacturing end to compromise his cost objectives to meet the customer satisfaction requirement, but that’s important to do. It’s hard to ask the sales department to compromise a delivery objective because maybe it would jeopardize the quality of the product. And you’re not really doing the customer a favor if you don’t’ give him a product that’s suitable to use.

One of the things I do to help people work as a team is to establish priorities. In order of importance they are teamwork and the concept of working as a team, safety – there isn’t anything more important than the safety of the people in the plant, quality, and customer service.

You need to make a distinction between quality and customer service. You’re no doing a customer any favor if you give him a product on time that he can’t use.

The last priority, and this may surprise you, is cost. It’s been my experience that id you get everyone living the first four priorities, you’ll be the low cost producer. You will optimize cost if you list it as your last priority and really live the first four.

What are Keystone’s biggest challenges in the next ten years?

At the top of the list would be to assimilate all the changes that are taking place as quickly as they’re taking place. In just this last year we’ve embarked on a $75 million capital plan, we’ve reorganized the company, we’re reorienting the way we manage to a priorities-based team approach….and that’s an awful lot for a year’s time. So assimilating the change process will be the most immediate challenge.

The second will be to instill a focus on performance. I honestly believe that the centerpiece of any successful company is a focus on performance.

Peter Drucker, in his book Management: Tasks, Responsibilities, Practices, wrote, “No organization can depend on genius; the supply is always scarce and unreliable. It is the test of an organization to make ordinary human beings perform better than they seem capable of, to bring out whatever strength there is in its members, and to use each man’s strength to help all the other members perform. It is the task of an organization at the same time to neutralize the individual weakness of its members. The test of an organization is the spirit of performance.”

Ultimately, if a company doesn’t perform, everything that is important to people will be lacking. For example, people want to be well compensated. Only a healthy, performing company can compensate people competitively.

But it gets beyond economics. People like to be a part of a team that’s a winner. People don’t like to be losers. Everything that is important to people – from economics to how they feel about themselves as members of a winning team – ultimately comes from performance.

The third challenge is growth. If you’re standing still, it’s only a matter of time before the competition overtakes you.

What was your most pleasant surprise about Keystone?

Its strengths. I didn’t realize the many strengths the company had, because there’s a limit to what you can learn about a company from the outside through annual reports and other research. But Keystone has a lot of strengths that will help the company prosper over time and, in the past, have helped the company survive during tough times.

What are Keystone’s real strengths?

At the top of that list would be its people. They’ve seen tough times and they’ve survived them and there’s a certain character that people develop when they’ve overcome difficult times. Certainly, Keystone’s an example of that.

Keystone’s location is a tremendous strength. If you look at Keystone Consolidated Industries, there are five plants that cut down through the center of the mid-America states. This gives Keystone a regional presence and helps it serve all the industrial wire markets in the mid-America states.

Then, if you look at Keystone Steel & Wire, we’re essentially at the center of the United States, where we have ready access to water transportation. That puts us in a position to satisfy national distribution requirements of the wire products industry.

We’ve also developed a sophisticated MRP (materials resource planning) system that employs new computer software and hardware to improve inventory accuracy, production scheduling, and customer service.

Our location, plus the MRP system, has allowed us to be very successful in satisfying customer requirements in the retail sector, which is by far the most demanding of all our customer requirements.

Keystone has a very well-respected, well recognized product that is prized for its quality and integrity. And that’s something that takes years and years to develop. Above all other competitors, Keystone’s Red Brand trademark is the recognized name in the wire products business.

What have you found most pleasant about the Peoria community?

Its people, without a doubt. I was born and raised in Pittsburgh, which isn’t the Midwest but shares many of its characteristics. I spent a lot of time out on the East Coast and then, when I moved to Michigan and later to St. Louis, I got to see what the Midwest was all about.

Peoria has that Midwest flavor, but it goes far beyond that. People here are very open. They give you the benefit of the doubt. They accept you no matter where you’re from or who you are. I was expecting that from the Midwest but was surprised by just how accepting the people really are.

What do you see as your most challenging task at Keystone?

I’d say the most challenging task we have is to achieve the financial results that are required by the massive capital expenditure as quickly as they need to happen. It’s a huge task that we have.

Keystone is exactly what I expected it to be. It’s very much like the companies I worked with in Michigan and St. Louis, just bigger.

If you could erase one misconception about Keystone or its work force, what would it be?

I would have us be a safer place to work. Statistics indicate that we have a high injury frequency in comparison to the industry in general. In addition to the priorities, safety is one thing I drive home every chance I get.

Yet, in your priorities, you put teamwork before safety. Why?

Because if you’re not operating as a team, you won’t be safe. If you’re not operating as a team, none of the other priorities will follow.

You see, to operate as a team you have to rise above your own special interests. And a guy who’s in charge of manufacturing needs to understand – if he’s a true team player – that it costs money to be safe.

In the short haul, you might think you’re saving money by not making the necessary changes. But in the long haul, and for the company as a whole, it will end up costing mightily, not only in economic terms but also from the sense of human life that we can’t even begin to put a price tag on.

Your wife and son are still in Pittsburgh. How is the commuting arrangement working out?

It’s working out fine. This isn’t the first time we’ve done this. When I ran the Michigan and St. Louis operations, we lived in Michigan and I commuted back and forth to St. Louis regularly. I did that for about two years…which will be along the lines of how long I’ll be doing this. You can do this for a little while, but you wouldn’t want to do it for a long time.

Any final thoughts?

You asked before if there were any misconceptions that I’d like to erase. If there was anything I could change about Keystone, it would probably be the past. Because what I find is that people project the past into the future. And the most difficult task ahead of us is to see ourselves in the future as successful.

I don’t want to portray that we’ve been unsuccessful in the past. Because you could make a point that surviving the tough time was a much more successful endeavor than prospering in the good times.

The people at Keystone have that special character that comes from making their way through tough times. It’s a wonderful, proud spirit that’s helped them survive.

But what we need now, more than anything, is for people to project success. To believe success. To understand that it’s possible. And to know they deserve it. IBI