Bottom 20: Last, No Blast

By Elizabeth Bennett  |  Posted 2004-11-03 Email Print this article Print

The 20 worst users of information technology aren't solely responsible for their technological woes.

It's not easy finding a silver lining when your productivity is negative. Especially when it's -4,053.8%.

Of the 2,500 public companies ranked to create the Baseline 500, the bottom 20 have the dubious distinction of being the worst managers of information in the U.S. The company with the lowest rating is Weirton Steel, the troubled, employee-owned metal products maker.

Now known as ISG Weirton, the Weirton, W. Va.-based company, like other integrated steel mills, has been in and out of bankruptcy despite strategic technology investments.

Indeed, a few sectors—manufacturing, media and entertainment, energy and technology—dominate the Bottom 20 list. Poor performers, though, even include contract electronics manufacturing giant Solectron Corp. (No. 20).

Each company has its own information management history and, in some cases, woes. Manufacturers such as ISG Weirton, Stillwater Mining (No. 2) and Kaiser Aluminum Corp. (No. 5) operate on tenterhooks in rapidly contracting industries. So do services firms like American Tower Corp. (No. 3).

Weirton Steel tried to make information management a competitive advantage but failed. In 1998, it launched the first online steel and metal marketplace, MetalSite (originally MetalExchange), with investment from industry heavyweights LTV and Bethlehem Steel. A year later, Weirton sold a little more than half its stake for $180 million—more than 10 times its original investment. Nine months later, however, MetalSite closed and was eventually sold to Management Science Associates, which revived the site. "It was impossible to get others to fund it with three of the investors in bankruptcy," says Patrick Stewart, Weirton's former chief information officer.

Stewart attributes Weirton's productivity gains to factory-floor automation that began in the late 1980s with an integrated manufacturing information system. But that wasn't enough to overcome "legacy health-care and pension costs that had built up over 100 years," he says.

In May, International Steel Group purchased Weirton Steel's assets for $284 million and renamed the company ISG Weirton. The new firm outsources much of its information systems to Hudson Global Resources, a division of New York-based Hudson Highland Group.

Baseline 500: The Bottom 20

RankCompany nameIndustry sectorNet sales ($M)Est. transaction costs ($M)Income before extra items ($M)IVA* ($M)Information Productivity (%)
1Weirton Steel Corp.**Manufacturing$1,058$19-$700-$784-4,053.8%
2Stillwater MiningManufacturing$240$15-$323-$420-2,892.9%
3American Tower Corp.Technology$715$27-$243-$631-2,349.8%
4Trico Marine ServicesServices$124$16-$164-$194-1,246.9%
5Kaiser Aluminum Corp.***Manufacturing$1,365$97-$788-$1,196-1,235.6%
6Liberty Media Corp.Media & Entertainment$4,028$556-$1,222-$6,842-1,230.7%
7Cumulus MediaMedia & Entertainment$282$14$5-$143-1,030.0%
8ENSCO Intl.Energy$791$21$107-$203-972.3%
9Entercom CommunicationsMedia & Entertainment$401$16$72-$145-899.9%
10Diamond Offshore DrillingEnergy$681$29-$48-$260-899.8%
11Crown Castle Intl.Technology$930$121-$396-$1,050-866.9%
12Clear Channel CommunicationsMedia & Entertainment$8,931$178$1,146-$1,403-790.4%
13Crown Pacific Partners***Manufacturing$335$24-$171-$182-758.6%
14Stewart EnterprisesServices$522$20-$74-$151-749.1%
15Rowan Cos.Energy$679$25-$8-$186-731.4%
16Emmis CommunicationsMedia & Entertainment$562$21$14-$133-623.1%
17SBA Communications Corp.Technology$212$30-$164-$178-585.7%
18Xanser Corp.Construction$136$3-$13-$17-522.3%
19DiamondCluster Intl.Services$152$46-$219-$242-519.9%
20Solectron Corp.Technology$11,014$693-$3,105-$3,556-513.0%
*information value-added
**assets purchased in may by international steel group; company now called isg weirton
***currently in chapter 11
Source: Strassmann Inc.

Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters