INTERVIEW: ‘I am a policy guy’ - AISI chief Tom Gibson

By IM Staff
Published: Tuesday, 12 May 2020

After 12 years at the helm and two global crises, the president and chief executive officer of the American Iron and Steel Institute is setting sail to calmer seas.

Tom Gibson

Tom Gibson

The former naval warfare officer and self-proclaimed 'policy guy’ sizes up his legacy in a one-on-one discussion with Jo Isenberg-O’Loughlin.

As a boy, all Thomas J "Tom" Gibson ever wanted to do "was fly an airplane and be an astronaut," the president and CEO of the Washington DC-based American Iron and Steel Institute (AISI) recalled recently, sharing early dreams of what was to become a four-decade-long professional career he will bring to a close in the fall of this year. 

"The flying part didn’t work out," says Gibson, 63, who announced his intention to retire in early March after serving as the AISI’s top executive for 12 years. "My eyes went bad in my senior year in high school," he explains. "My left eye was tested at 20/30. And, in those days, that was disqualifying for aviation."

A graduate of the US Naval Academy, Gibson holds a degree in Naval Architecture, a subject he describes as "akin to mechanical engineering. It deals with structure, propulsion, auxiliary systems and all that," he explains. "So, it can entail designing anything from a sailboat to an aircraft carrier and everything in between."

Still very much a designer, architect and builder, Gibson – along with his colleagues at the AISI – is busy these days framing policies articulating the US steel industry’s position on issues ranging from global trade, infrastructure, and currency manipulation to climate change and CAFÉ standards. And it is no accident that is exactly what he was hired to do by the Institute a dozen years ago.

"What the AISI was looking for in 2008 was someone who could build their capability and credibility," he says. And by all accounts, Gibson, who by then had served two tours at sea (one as a guided-missile officer on a cruiser, the other as an executive officer of a mine sweeper) and various high-level management positions in both industry and government, fit the bill.

Managing policy
"Ask a headhunter 'What’s Tom’s reputation?’ and he’ll tell you Tom is a policy guy," Gibson, who headed a policy office at the US Environmental Protection Agency (EPA) prior to joining the AISI, notes. "I am a policy guy." 

Gibson joined the AISI in what in retrospect can be described as mid-recession. "The day I was hired, capacity utilization was over 90%," he recalls. "Things were great although the commercial guys would probably tell you they were starting to see some softness over the summer.

"I started September 1, 2008 – US Steel was about to hit its peak stock price," he recalls. "Then, by the end of the month, the world had changed."

In an ironic twist in timing, Gibson’s career at the AISI is marked at its beginning and end by a pair of crises, both far-reaching in scope and of critical import to the US and global steel industry. "My tenure has been bookended by two crises, both of which go well beyond the steel industry," he comments. "In between, we had one crisis after another."

A common thread and a root cause of the crises that played out over the intervening years was global steel overcapacity in general and China in particular. "When I took over in 2008, China’s capacity and production were almost half of what they are today," Gibson recalls. 

"What we saw during the first crisis of my tenure – the world financial crisis – was China never taking its foot off the expansion accelerator," he says. "The Chinese just kept adding capacity on a straight line until 2017 – if you believe their data – when things kind of leveled off a little bit. But it appears to me that they are taking off again," he cautions.

Statistics compiled by the Brussels-based World Steel Association show a sustained and steep build-up in China’s raw steel production capacity from 500.5 million tonnes in 2008 to 928.3 million tonnes in 2018. By comparison, US raw steel production capacity actually declined from 91.4 million tonnes in 2008 to 86.6 million tonnes in 2018.

Tom Gibson with Wilbur Ross, U.S. Secretary of Commerce

Tom Gibson with Wilbur Ross, US Secretary of Commerce

The resultant global steel capacity glut and trade distortions it caused may count as the first, overarching crisis Gibson faced in his role as the AISI’s new top executive, but it was far from the last. "I spent a lot of my time in the first 18 months or two years working on climate issues," he says. "But I was also spending time in those early years reconstituting our policy capabilities.

"What I was doing when I wasn’t doing climate and learning trade issues was building a policy team," Gibson recalls. "In the early days, I was building that team and trying to change the culture at the AISI. The AISI was not an organization in 2008 that commented publically a lot on policy.

"We have always been a voice for the industry on statistics and the kind of macro-messaging on steel such as the 'New Steel’ campaign," he notes. "But being a relevant policy player was something we had to learn to do."

Battles beyond trade
Besides the virtually non-stop challenge posed by global steel trade issues, Gibson and the 165-year-old trade organization he heads have faced battles closer to home. One came about half way through his tenure in the form of competitive materials, "especially aluminum in autos," AISI’s top executive reflects.

"We saw Ford make a pretty dramatic change on the F-150 pickup from steel to aluminum with respect to body although they had to retain a steel frame on the truck," Gibson points out. "The industry’s response to that has been fantastic. And we have not seen a single major platform switch from steel to aluminum since then," he notes.

A competitive challenge of an entirely different stripe surfaced relatively early in Gibson’s AISI career when talks calling for the merger of the domestic steel industry’s two major trade associations – the AISI and the Washington, DC-based Steel Manufacturing Association (SMA) – surfaced.

The AISI, which was founded in 1855, currently counts 15 producer members – mainly integrated steelmakers – and 92 associate members. Established in 1990, the SMA counts 25 producer members, 75 associate members and comprises electric-furnace-based steelmakers.

Today, the two organizations remain separate but complementary in terms of their respective strengths and areas of focus and expertise. "We have probably never had a more cooperative relationship with SMA and other steel associations than we have had recently," Gibson says. "We work together on any number of issues. We are working right now on safety issues during the Covid-19 crisis," he adds.

Looking ahead, Gibson expects more of the same. "I’d say probably in the next couple of years, you’ll see the Associations differentiate a little bit and specialize in what they are good at," he predicts. 

"We are a policy shop and we are very good at that," the AISI’s top executive elaborates. "The SMA has always been very good at plant level operations and is very strong in that area. I think companies who are members of both aren’t going to want to see us duplicating what we do," Gibson says. "I think the pressure on my successor will be to work cooperatively with the SMA and look for opportunities, synergies to make sure we are not duplicating efforts."

A matter of mission
What differentiates the AISI from its sister steel trade organizations? "I’d say the AISI’s greatest asset in a lot of ways is its name and reputation, its 165-year history," Gibson answers. "We have a very large megaphone when we want to get the word out. And when we want to use that megaphone, we can get an audience for it. 

"The history, the data that we have going back decades is a particular strength of the AISI," he adds. "And we want to use that voice on behalf of the industry. 

"When you start looking at external audiences on the Hill, they want to see a steel industry position," Gibson speaks from experience. "They don’t want to hear from three or four different associations. They want to hear what the steel industry wants, especially in times of crisis.

"I think the core purpose of the AISI remains advocacy, policy advocacy, and some targeted market programs," the Institute’s top executive summarizes. "We’ve got our AutoSteel partnership program and there is no other material in the auto universe that has such a partnership. 

"We have some real strengths that enable us to provide solutions to our customer in the industry," he adds. "Those are just unique to the AISI and will allow us to continue to differentiate ourselves."

Building a legacy
Asked what he considers the highlights of his AISI tenure, Gibson is quick to answer: the series of trade law improvements achieved in 2015 and 2016; long-sought-after changes obtained in the USMCA (United States-Mexico-Canada Agreement), the successor to Nafta; and slamming the brakes on aluminium’s incursion into the automotive market after Ford Motor’s switch to the lighter-weight metal on its best-selling F-150 pickup in 2015. 

"The trade law improvements made as part of the whole Trade Promotion Authority (TPA) deal in 2015 and then the passage in 2016 of the ENFORCE Act, which dealt with some issues over at Customs – anti-dumping and countervailing duty (CVD) evasions – were enormous industry victories," Gibson says.

"I had spent seven years making reports to the Board on 'progress,’ on changing the trade laws, on bills that were introduced, hearings held, letters written," he recalls. "To the Board, it sounds like so much talk about 'process.’   

I’d say the AISI’s greatest asset in a lot of ways is its name and reputation, its 165-year history

"I’d say the AISI’s greatest asset in a lot of ways is its name and reputation, its 165-year history," said Gibson

"But finally, after 20 years of effort and instead of just talking about our successes in having hearings, we got the actual legislation done and signed into law," Gibson says. "That is the nature of legislation," he shrugs. "It is usually impossible but every now and then, (it is) almost inevitable; if you are ready. It is not like making a product."

Another highlight? Securing changes the industry had been seeking for years – including a remedy for currency as part of the trade agreement in addition to provisions on some improved rules of origin – in the USMCA.

"And we got those in conjunction and working with our Nafta partners," Gibson points out. "We had united steel positions throughout the United States and North America and we got those changes in USMCA."

A silver lining
Dated March 5, 2020, the press release issued by the AISI announcing Gibson’s intention to exit the organization "in the fall of the year" landed only weeks before Covid-19 started its deadly trek across the US and began its assault on world commerce. The ramifications of the spread of the coronavirus have cast ominous clouds across virtually every sector of the world economy. 

If there is a silver lining for US steelmakers in the wake of the pandemic, it could come in the form of a bipartisan push to pass a comprehensive, national infrastructure bill as part of a recovery plan.

"There are going to be recovery bills that come after this that look for opportunities to restart the economy," Gibson predicted in early April. "The needs for infrastructure – roads, the electrical grid, hospitals, schools – are all well-documented and well-known.

Equally well known is the ripple effect in the economy of construction and infrastructure spending, he points out. "I think the logic for infrastructure spending is very strong," Gibson insists. "The job creation effect, how that aids steel, aids construction, aids the local economy are all common knowledge."

AISI’s top "policy guy" notes that there had been bills – "little pieces" of legislation – advanced in the Senate on highways. "Rolling this into a national infrastructure bill seems to me to make a lot of sense," he says. 

Looking ahead, Gibson urges policy makers to avoid wasting time fighting over extraneous political considerations – such as attempting to make the bill too "green" – and to take lessons from the past. 

"I would caution against some of the mistakes that were made the last time, including this obsession with the term 'shovel ready,’" Gibson warns. "'Shovel ready’ wasn’t a term that was particularly good for steel. It was said to be long term – bridges, things like that – but I think it overemphasized maintenance, overemphasized asphalt, and that kind of activity," he says. "We hope they don’t make that mistake again." 

While the AISI’s top executive is critical of the national infrastructure program launched in the wake of the world financial crisis, he is definitely upbeat when it comes to another initiative undertaken to speed recovery after the US economy tanked in 2008/2009.

"You know, the last time we had something like the 'Cash for Clunkers,’" Gibson recalls. "Cars that were bought with Cash for Clunkers eleven years ago are clunkers now," he points out. "So, maybe we ought to look at that again." 

It is no accident that Gibson zeroed in on federal spending on US infrastructure and in autos as being pivotal to steel’s recovery post the Covid-19 crisis. "Construction and autos are the two biggest steel demanding sectors of the economy," he notes. "About 40% of steel consumed in the US goes into construction and some 27% goes into automotive, so we want to see those two sectors starting as quickly as they can."

Crisis and change
Ask Tom Gibson what he considers the overarching theme of his tenure at the AISI and he answers in three words – crisis and change. And the former Naval warfare officer is ready to share with his successor the wisdom derived from twelve years at the helm of the organization.

"I would say, first off, make certain when you come in – and I was sure of this and it really aided me in the tough times we had in 2008 – that you forge a good relationship with the board," Gibson advises. "And when you are the guy who is hired new, realize that you are never going to have more leverage and the ability to effect change in an organization than you have in the early days," he adds. 

"I made a lot of changes at the AISI in the early days." Gibson reflects. "I changed the focus. We became a policy organization that was what the members wanted when I was hired."

"Make your big changes early," the departing president and CEO of the AISI emphasizes. "Kicking things down the road doesn’t make big decisions any easier."

"And try to focus as much as you can on what unites the members, not on what divides them," Gibson adds. "Try to get them to focus on what unites them because there is a lot more that unites them than divides them. You know in any group, there is a tendency sometimes to focus on what divides you."

The next chapter
At 63, with a myriad of interests, Gibson is looking forward to an 'active’ retirement. "At some point, some way, somehow, I will probably get back to thinking about ocean issues," he says. "That was a big focus of mine when I was in the Senate, and obviously fits with my Naval Academy experience. So, possibly some teaching at high school or just teaching sailing," he says. 

"I have an abiding interest in manufacturing," he adds. "So, there may be opportunities there to consult. We’ll see when we get to the other end."

Gibson, who does not own a boat at the moment, but does own a home in Newport, Rhode Island, is looking forward to visiting his son and daughter in New York City and traveling once travel is safe again.

"For fun, I’m about the 'B’s’ – bikes, boats, books, beaches and baseball," Gibson says. A long-time Washington Nationals baseball fan, the AISI’s top executive attended his very first World Series game last year after overcoming some Big League obstacles to make it to the ballpark in time for the first pitch. "Getting to that game was a pretty wild experience," he recalls. "I was in Tokyo for the Global Steel Forum and had to go through a flash flood at Narita and a six-hour flight delay. But there was no way I was going to miss that game!" 

Gibson, who is known among steel circles as somewhat of a baseball fanatic, has the credentials to prove it. At last count, he had visited "about 20" of Major League Baseball’s 30 Parks. And there is little question the future beckons. "I’ve got to get on the road again," he says as retirement draws near.

When you start looking at external audiences on the Hill, they want to see a steel industry position