SMU Community Chat: Geoff Gilmore guides Worthington Steel into the future

He sat down with SMU Managing Editor Michael Cowden on Wednesday’s Community Chat. In a far-ranging conversation, they touched on how things are going with Worthington Steel, plans for the future, the economy, and even the implications of the 2024 presidential election.

Recall that Columbus, Ohio-based Worthington Industries has completed the split into Worthington Steel and Worthington Enterprises.

Steel Executive of the Year

Things started off on a personal note, with Cowden highlighting a personal achievement in the steel industry for Gilmore. Last week they were both in Clearwater, Fla., where Gilmore was honored as the Steel Executive of the Year by the Association of Metals Processors and Distributors’ (AMPD) – formerly the Association of Steel Distributors (ASD).

Gilmore said he was humbled “and certainly honored to win an award like that,” as past recipients include some of the most illustrious names in the industry.

He said something that makes it particularly meaningful is that “it’s voted on by your peers and the industry.”

“They understand what challenges that you have, and what you’re overcoming,” he added.

However, he pointed out that at Worthington Steel, “we don’t have individual awards.”

Though he accepted the award, he said, “It’s for the team and the work they’ve done over the last year. To get us to the point where we could separate companies was truly remarkable.”

Worthington Steel

Since the formal separation on Dec. 1, Gilmore said he couldn’t be more pleased, saying the entire team “really hit the ground running.”

He noted a particular highlight was ringing the bell on Jan. 8 at the NYSE with 14 other team members. Gilmore deemed it “exciting for the entire organization, and probably a top moment for everybody that attended as far as their business career.”

The company recently completed its first quarter as a standalone company. Worthington Steel will report the results for its fiscal third quarter of 2024 after the market closes on Thursday, March 21, and will hold an earnings call the next day.

“So it’s full-steam ahead and going very well at this point,” Gilmore said.

Describing the new company, he stressed, “I truly believe we’re a unique value-added steel processor.”

He said Worthington Steel is unique where it fits in the in the overall supply chain, in between the mills and the distribution centers, labeling it a “sweet spot.”

Gilmore said, “I think it’s certainly got the attention of investors and the overall market. So it’s going to be awesome to continue to talk about our strategy and how it evolves.”

What’s on the horizon?

Looking ahead, Gilmore said upcoming bright spots for the company include the decarbonization of transportation, renewables, and federal infrastructure spending, as well as the need for transformers.

“That’s a hot market for us, and that’s going to continue for years to come,” he commented.

Tempel Steel and future M&A

In 2021, then-Worthington Industries closed on the acquisition of Tempel Steel in a deal valued at $255 million, the largest the company had ever made.

Tempel, headquartered in Chicago, is a manufacturer of precision motor and transformer laminations for the electrical steel market.

Gilmore said the company was a great “growth platform for Worthington Steel,” adding it was particularly well positioned to benefit from the decarbonization of transportation.

Regarding future acquisitions, Gilmore said, “We’re probably not done on the M&A hunt for electrical steel at this point.” He also said the company could make future buys in Europe and wouldn’t rule out acquisitions in other segments if they align with Worthington’s goals.

Biden vs. Trump

Finally, at this time in 2024, it’s hard not to think about what’s turning into a very contentious election season. When asked about what would happen in either a second Biden or Trump term, Gilmore quipped that he was probably going to offend 50% of people no matter what he said. He focused mainly on the economy.

For Biden, he said one concern was “energy independence.”

“I’m concerned that we are not energy independent, and that, certainly, I think, has moved backwards a bit,” Gilmore said.

Noting he was for renewable energy sources, he said, “But I want everything. I think the portfolio should involve anything that is creating value for us and contributing to our independence.”

Other areas he cited for Biden were taxes, which may be too high, and creating a pro-business environment to help the economy.

Noting the disunity in Trump’s first term, Gilmore asked, “Can you unite [the country]?… That would be great to see” in a second Trump term.

He said Trump’s policies were generally more pro-business and leaned more towards energy independence.

Finally, when asked if Trump would unwind many environmental regulations that have been put in place, Gilmore said that many of these projects “are already too far along.” He cited the decarbonization of transportation issue specifically.