Esmark and Jim Bouchard manage through the difficult times

 
Jim Bouchard has spent his entire life connected to the steel industry — and he’s very familiar with its ups and downs.
Both his parents worked for Inland Steel Co. His first job was at Ryerson. And he was an executive vice president with U.S. Steel before running his own companies — Bouchard Group, a diversified venture capital investment holding company, and Esmark Inc. II and III.
The current downturn is not the worst Bouchard has seen. What’s unusual is how oil and steel are down together.
“If you look at that over the last 50 years, steel and oil usually are counter-cyclical, but both are down at the same time,” Bouchard says.
So as chairman and CEO of Esmark Inc. — a name and brand that Bouchard brought back to life for a third time in 2008 — he is relying on his experience, and his team’s experience, to successfully manage through the tough times, even if it takes longer than initially expected.

A global slump

Bouchard and his management team started buying assets in the commodities sector in 2009 and 2010.
“Initially we came in and we thought we bought the assets right and we were going to grow out as the U.S. economy grew out, and the world economy grew out,” he says. “And that really hasn’t panned out.”
Bouchard says everybody thought after the financial collapse the commodities sector was going to rebound quickly. They were wrong.
Although oil has followed its own ups and downs — mostly ups — all the commodities are tied into the global slump of commodities right now.
“Everything is down. Copper is down. Zinc is down. Steel is down. Oil is down. Iron ore is down. Coal and coke are down,” he says. “Every major commodity is really struggling today.”

Diversify your interests

Luckily, in order to offset steel’s down cycles Bouchard made sure Esmark III is more diversified than Esmark II, which was entirely a steel producer.
Through its subsidiaries, Esmark has focused in and around the industrial and commodity sectors, including manufacturing, the development and production of oil and gas, real estate and business services.
“Thank God we (diversified) this time around,” Bouchard says. “Steel has been a struggle since 2010. The economy has grown very slowly. Steel consumption has grown slowly. The commercial construction business is still off 70 percent from what it used to be, and so it’s a slow grind out.”
The one challenge of diversifying, however, is it can be more difficult to manage the 430 employees.
Oil and gas guys are totally different than steel guys or real estate people, Bouchard says. Even in Esmark’s steel fabricating company, those employees and managers are different than the steel service center managers.
“Esmark is not going to change the oil and gas business, and we’re not going to change the fabricating business,” he says. “We have to learn how to play in their sandbox and do it in the most cost effective way.”
Bouchard has always used a laissez faire management style, giving his executives a lot of leash to run with.