Friday, June 22, 2012

Meet America's biggest bull (Hint: He's Russian)

Fortune’s Shawn Tully writes:  -- It was my first encounter with a Russian billionaire. The setting was a nondescript meeting room, down a long, bland hallway of meeting rooms, at the Sheraton New York Hotel, where Alexey Mordashov was attending a steel industry conference. His press people had cautioned that Mordashov, Russia's leading steel magnate as chief of Severstal (2011 revenues: $15 billion) and one of his nation's biggest investors in the U.S., is the antithesis of the flamboyant Russian oligarch. He eschews collecting yachts or U.S. basketball franchises, and instead supports the local hockey team in his hometown of Cherepovets, where his parents labored in the giant steel mill Severstal now owns.

Mordashov, attired in a blue suit and loosely-knotted blue tie, greets me with a crunching handshake worthy of a welder. He speaks fluent if heavily accented English learned as a business student at Northumbria University in Britain. At 46, Mordashov is trim and youthful-looking with neatly-cropped brown hair. Indeed, after starting as a low-level finance manager, he rose to head Severstal in 1996 at age 30, building a conglomerate by purchasing steel, mining and coal companies. His net worth reportedly exceeds $18 billion.

Mordashov became the one of the first major Russian investors in the U.S. when Severstal purchased the legendary Rouge plant in Dearborn, Michigan, in 2004. "Steel plants in the U.S. were in worse shape than the Russian plants we renovated," says Mordashov. "A lot of the technology was 150 years old. They'd suffered from under-investment for many years."  Worker morale, he adds, was as big a problem as decaying furnaces. "People were expecting Rouge to go bankrupt, so there was a lot of anxiety. The corporate culture problem was even worse than in Russia. And at the same time, the work rules were more difficult…."


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