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O n New Year’s Day, 2001, retired United Steelworkers’ representative Ernie Ronn congratulated John Brinzo, then chief executive officer of ClevelandCli ffs, Inc., for leading the company across the threshold of the new century. Ronn’s letter was sent from Michigan’s Upper Peninsula, the location of the company’s Empire and Tilden mines. He proudly alluded to the five generations of the Ronn family who had worked in earlier mines owned by Cleveland-Cliffs and recalled the years when labor troubles had threatened the company’s survival. “The yesteryear doom sayers and predictors of doom have been proven wrong,” he wrote. “The Cleveland-Cliffs Iron Company and the United Steelworkers have not destroyed each other. The towns of Negaunee and Ishpeming are not the predicted ghost towns.”1 The celebratory tone of Ronn’s letter may have seemed somewhat incongruous to its recipient, for just then Brinzo was facing a challenge as daunting as any the company had encountered in more than 150 years as a mining enterprise. The company’s problems had nothing to do with labor. At the end of the year 2000, Cliffs’ steel company partners, LTV and Wheeling-Pittsburgh, had filed for Chapter 11 bankruptcy. Cliffs’ other partners , Bethlehem, Acme, Stelco, and Algoma were also on the brink of failure. North American steel companies had recovered from bankruptcies in the 1980s, but the situation in 2001 was entirely different. “Nobody anticipated that they would ever shut down and go out of business. Well, they did,” Brinzo said in a 2006 interview. The most serious blow came with the sudden liquidation of LTV, which left Cleveland-Cliffs with a large inventory of unsold iron ore pellets. This was especially damaging because the INTRODUCTION 2 INTRODUCTION steel company was a major partner and customer. LTV had just worked out an agreement with Cleveland-Cliffs to close down LTV’s wholly owned mine in Hoyt Lakes, Minnesota , and take additional sales tonnage from Cliffs’ Tilden mine. Without a customer for Tilden’s pellets, Cleveland-Cliffs faced the prospect of shutting down the mine. “Now at that point, if we had stayed that way, we would have been dead,” Brinzo recalled. “It would have been just a matter of time.”2 Although Cleveland-Cliffs’ prospects looked grim, Brinzo had no intention of allowing the company to fail. As a stopgap solution to the Tilden ore problem, he proposed that Cliffs purchase LTV’s Cleveland Works and restart its blast furnaces. By going into the steel business, the company could save the Tilden mine and keep its options open. Although this drastic step fortunately did not prove necessary, nevertheless the time was right for the implementation of Brinzo’s plan to achieve majority ownership in the company’s mines by assuming its struggling partners ’ liabilities—such as employee pensions and health care—in exchange for long-term sales contracts and the partners’ shares of Cleveland-Cliffs’ mines: a plan that, in essence, converted the former partners to customers. With Cliffs freed from partnerships with North American steel companies, Brinzo envisioned a new chapter in the company’s history. These and other actions, both calculated and serendipitous, taken between 2001 and 2005 positioned Cleveland-Cliffs to become the largest American producer of iron ore and a global merchant of iron pellets. Brinzo’s plan enabled Cleveland-Cliffs to regain the independence it had enjoyed prior to the 1950s—before partnerships with steel companies became the industry norm. If Brinzo had been a newcomer to Cliffs’ management, it is unlikely that the company ’s board of directors would have approved such a risky proposition. A financial analyst by training, Brinzo had spent several years as controller of the Empire mine in the 1970s, where he embraced the company-centered lifestyle of Michigan’s Upper Peninsula. After his return to the company’s Cleveland headquarters, while serving as vice president and controller, he had weathered the first set of steel company bankruptcies and two corporate takeover attempts. Brinzo became senior vice president of finance and planning before being elected president and chief executive officer in 1997. Four years later, as the American steel industry collapsed, Cleveland-Cliffs began the systematic purchase of its partners’ shares in its mines. The timing was impeccable. Cliffs’ transition to iron ore merchant coincided with the increasing demand for iron ore by the People’s Republic of...

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