Crucible Industries declares Chapter 11 bankruptcy

[bleasure]

Is their machinery brand new, or is it clapped-out junk? A factory with worn out machinery is only worth the price of the building and the land. Is the dirt on the land clean, or is it contaminated with all the toxic waste that one might expect from a hundred year old foundry? Remediation could cost more than the land could ever be worth. Are the intellectual assets worth the risks?

fun to pose random questions you could find answers to as if you were in position to invest $20 million, about a place that's actually real, and means something to actual people, in an actual place. crucible matters to people here, but sure, just float whatever horse***t comes to mind as if you're in a position to actually assess anything

[RustyIron]

sure, just float whatever horse***t comes to mind as if you're in a position to actually assess anything

Lighten up, Francis.

[sal]

To be honest, I'm quite impressed that a group of knife afi's would choose to discuss something so "in" as the possible closing of a steel foundry that makes good amount of our steel. Is this going on with other knife forums?

I'm interested in all of our thoughts regardless of how "far out" they might seem. Lotta good heads here.

sal

[RustyIron]

Reputation, good name, knowledge, experience and trade secrets.

Indeed. You and I both know that potential suitors are considering the liabilities in addition to the assets. Just because folks on a forum are gaga for knives made with steel made by Crucible, it does not mean that buying the company at the claimed equity value is a wise decision. Frankly, that's just a little naive and foolhardy. It's no different than buying and selling a car. Just because I tell you my Hemi 'Cuda is cherry, doesn't guarantee you wont' get it home to discover it needs a new tranny, has the wrong engine serial number, and is rusted out.

When a company flounders for whatever reason, the knowledge and the technology continues to live on. The exception was the Egyptian craftsmen who built the pyramids. They were put to death and their secrets died with them. I don't think the workers at Crucible are under the same type of contract. In a capitalist system, when one producer is unable to fill customer expectations, competitors eagerly fill the vacuum. When Kodak fizzled, we didnt' lose the ability to take pictures. When Sears flopped, we were able to get consumer products elsewhere. Atari's implosion didn't stop us from playing video games. No matter what happens at Crucible, we're still going to have knives with great steel.

I'm no clairvoyant, but I suspect that Crucible will live on in some form or another. And although I don't have the insider knowledge to know for sure, I would expect Crucible's competitors to be reaching out to their biggest customers, assuring them of the quality of their products and ability to deliver on schedule. Anyway, that's what I think about it.

[sal]

Hi RustyIron,

All true comments, for sure.

Truth be told, I would expect that Spyderco would be worth more than the land and the building/equipment, etc.

sal

[WilliamMunny]

Hi RustyIron,

All true comments, for sure.

Truth be told, I would expect that Spyderco would be worth more than the land and the building/equipment, etc.

sal

A lot of times the value comes from the name and the trust in the people who run and work at the company.

Last year Spyderco sold me a Mystery Box full of unknown seconds knives, in unknown condition without warranty or any way to return it for $250. I could not hand my money over fast enough, like many other people. I don’t think there is another company out there I would put that sort of trust in, but I knew I would get value for my hard earned money because it was Spyderco.

It’s not much different than when Lowe’s bought Craftsman. People trusted the brand and Lowe’s knew it would widen their customer base and turn into an additional revenue stream.

I think the company will survive. Crucible is very well known and respected in the industry. Their name carries a lot of respect and trust. American made steel on American soil is very patriotic and with some good PR could bring in a lot of support.

[Brock O Lee]

The cost of running a steel mill is eye watering. Margins are a lot finer than you'd think, and is highly influenced by energy input costs, and market dynamics.

I used to work as a process control engineer at the large stainless steel smelter in South Africa, the only operation of its kind on the African continent. Columbus Stainless still produces flat stainless steel products (giant rolls of stainless steels) of various grades. The operation is a few orders of magnitude larger than Crucible, but they do not make PM grade steels. They were competitive at the time when I was working there, but bankruptsy always loomed on the horizon. That was even when energy costs were at a record low. At that time the Chinese and other lower cost producers entered the market in a big way, which made it almost impossible to survive. It is a tough industry. To survive you need efficiency and huge economies of scale to dilute the considerable capital and operational costs.

After watching Crucible's shop tour video, I was surprised to see what struck me as a lack of automation through many of the processes. For instance, hot rolling relying on manual labour to insert material repeatedly into a rolling mill as it is rolled to spec. Also, a fork lift racing between reheat furnace and hot rolling mill with a glowing billet, right next to the workers in a relatively small work area. I guess I expected to see a much more hi-tech and modern automated operation, probably because of high profile and excellent reputation of their particle metallurgy process, and the many famous knife steels they produce. Interesting...

As an outsider, my guess is that an investment in automation is long overdue, and it would make their operation much more efficient and competitive.

I sincerely hope Crucible survives, for the sake of the workers, and also for the sake of many of our beloved knife steels.

[SpyderEdgeForever]

If you were to speculate, what is the likely future of American and European specialty steel production? Small batches of specialty use steel, perhaps involving powder metallurgy and more advanced 3d printing type systems, rather than ingot steel and large rolling mill type stuff, combined with larger mills for major construction elements?

[RustyIron]

I guess I expected to see a much more hi-tech and modern automated operation, probably because of high profile and excellent reputation of their particle metallurgy process, and the many famous knife steels they produce.

That's funny, as I was left with the same impression. I expected to see something that looked like a Space X manufacturing facility. Maybe there really IS a building like that, but it's not in the video because it's really boring compared to big chunks of glowing steel. Or maybe small scale production is most efficient when done the old-school way.

[Mk-211]

Nippon is in the process of buying U.S. Steel, which is probably a good thing, for everyone involved.

https://www.reuters.com/markets/commodi ... 024-11-07/

Maybe they could buy Crucible and get a twofer.

[TkoK83Spy]

I've stated in another thread on this topic a few weeks ago, that I actually work a half mile from Crucible. When I was doing Shipping/Receiving for my company, I could see Crucible from my dock door. Like Hans mentioned on the video tour he saw, Crucible is very far behind the times in terms of equipment and overall upkeep of the facility itself. From the outside, it does look like an absolute dump and looks every bit of being 125 years old. Pollution and contaminants also play a factor in this area. Look up the history of Onondaga Lake, which is a stones throw away from Crucible. There's land in this area that's for sale for $1 (my company has looked into purchasing some) but it would cost an extraordinary amount just to be safe from the past chemical pollutants of the area, deeming it not a smart investment. Our Mill when built, had to dig around 30ft into the bedrock to be safe and clear of the past pollution. (Many of my photos have been taken in an area that could show that. I'll try to find one to give a scale of what I'm referring to)

I imagine Crucible is an even worse situation, as my company has only been around for 35 years, vs the 125 years Crucible has been around. It's a very large facility and I can't imagine how much money it would cost to fix it up and adhere to whatever laws would be required if it were torn down and something else rebuilt in its place. Regardless, it's a sad end to one of the longest running companies in our area.

I thought I had a better photo somewhere, but this is the best I could find. "Ground level" should be up towards the upper right of this photo. That up there, is another ledge with probably another 10ft of ground above that area. That's how far down in the bedrock the foundation of our mill is built on.



And a couple photos of Crucible from a few years ago for good measure!

[SpyderGrill]

I dont think it looks like an Absolute Dump in the pics, its worked for years. If they put a dress on it years ago maybe it wouldnt have lasted this long

[TkoK83Spy]

I dont think it looks like an Absolute Dump in the pics, its worked for years. If they put a dress on it years ago maybe it wouldnt have lasted this long

That's only a very small section of the entire facility itself, and being the entrance of course it's maintained a bit better than the rest of the property.

[James Y]

This thread is fascinating. Much appreciation to everyone's contributions. I'm learning things about steel mills I've never really thought much about.

Jim

[BornIn1500]

Smoky Mountain Knife Works took a tour and made a video of it.

[cabfrank]

This thread is fascinating. Much appreciation to everyone's contributions. I'm learning things about steel mills I've never really thought much about.

Jim

+1
Things one doesn't know much about can be just taken for granted. I know I hadn't considered a lot of this.

[Cricket Bite]

I would assume the steel “recipes” are patented/copyrighted and therefor of value. If they do go under they would probably sell these recipes off to pay off debt. Of course it might not be to an American manufacturer but the knife steel should still be available assuming it is profitable.

[Danke]

For a heavy industrial site that place looks super clean.

[sv4]

That there were potential buyers, but only willing to purchase under the bankruptcy process, implies to me that they were likely more interested in the company’s IP rights and “steel recipes” than in keeping the plant itself operational..

[Pokey]

Naturally everyone here is interested in Crucible's steel used in knives, but aren't their steels used in other industries for other things? They may be doing a rip-roaring business at selling knife steel, but in the grand scheme of things maybe knife steel is just a small part of what they do and the rest of their customers aren't buying a lot of Crucible steel for their widgits or tools.

Overall they'd have to be profitable but if one side of your product line sales goes flat it may put you in the red with no way out but bankruptcy.