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The keeper of the flame: Greg Ludkovsky

Keywords: Tags  Greg Ludkovsky, ArcelorMittal SA, R&D, research and development, Ford Motor Co., S-in Motion, high strength steel, F-150 fuel efficiency

If it’s Tuesday, it’s a fair bet you’ll find Greg Ludkovsky on the telephone or in front of a video conferencing camera communicating with some eight to 10 “direct reports” from both sides of the Atlantic.

“Every Tuesday at 3 p.m. European time, 8 a.m. U.S. central time, we have a conference call where we share and discuss all the most important issues, starting with safety,” Ludkovsky, global research and development vice president for Luxembourg-based ArcelorMittal SA, told AMM in a telephone interview. “We have 11 research centers and more than 1,350 scientists in the organization,” he said, sizing up what these days counts as a rarity on the North American steelmaking scene--a bona fide R&D powerhouse.

R&D spending by the world’s largest steelmaker totaled $285 million in 2012, with the purse divided slightly in favor of product research (52 percent) over process research (41 percent) and the remaining 7 percent going to fund “exploratory” initiatives. The lion’s share of the $148-million spent on product research that year--55 percent, or $82 million--was focused on the auto market, one of three areas ArcelorMittal has identified as a “franchise” business. Construction (14 percent), plate and specialties (14 percent), general industry, including packaging, appliance, metal processing and electrical steels (12 percent), and others (5 percent) accounted for the remaining $66 million in outlays.

With that kind of firepower and a sustained corporate commitment to R&D--through thick and thin--it’s little wonder that Ludkovsky barely flinched when asked about the ramifications of Dearborn, Mich.-based Ford Motor Co.’s decision to wrap the country’s best-selling pickup, the F-150, in an innovative high-strength aluminum alloy.

“A wholesale move to aluminum body construction is highly unlikely as steel is the only material that provides the optimal balance in affordability, fuel efficiency, manufacturability and sustainability without compromising passenger safety,” he stated flatly, noting that iron and steel historically have accounted for 60 percent of the weight of an average vehicle produced in North America. “And with the advances in high-strength steel, we expect that trend to continue,” Ludkovsky said. “We currently have a portfolio of products--proven products and solutions--that can allow all American auto manufacturers to meet their fuel-efficiency targets of 2025 without reverting to one pound of alternative materials.”

Many of those advances are offshoots of ArcelorMittal’s flagship S-in Motion program, a multiyear effort the steelmaker bills as the single largest initiative of its kind worldwide. Ludkovsky described S-in Motion, which was rolled out in 2011-12, as a catalogue of 60-plus steel solutions delivering savings of “up to 73 kilograms (161 pounds), or 19 percent, of a typical C-segment vehicle’s body-in-white and chassis weight. These savings are achieved at neutral cost without compromising safety performance,” he said, and add to that a 13.5-percent reduction in carbon-dioxide-equivalent emissions during a vehicle’s use.

Behind those numbers and the competitive advantage they imply are five separate laboratories--two in North America (East Chicago, Ind., and Hamilton, Ontario) and three in France--as well as 565 engineers and technicians tasked with adapting steel to the evolution of automotive customers’ needs. In addition, ArcelorMittal has fielded a small army of dedicated resident engineers--“ambassadors,” Ludkovsky calls them--worldwide, including some 14 in the United States, to work side by side with its largest customers in committed co-engineering programs.

“We have the largest R&D organization in the Western World,” said Ludkovsky, who grew up in the Soviet Union and emigrated to the United States in 1979 as a political refugee. “I do not believe, certainly in the United States, there is any organization of this size and caliber. It simply does not exist.

The son of a construction engineer and a mother with a degree in architecture, Ludkovsky, who holds a doctorate in metallurgical engineering and numerous patents, joined Inland Steel Co. in 1979. Over the years since--and subsequent consolidation of the global steel industry--he served in various R&D and technology-related executive slots with Ispat Inland Inc., ArcelorMittal USA Inc., Ispat international NV and other affiliated organizations.

Asked what he might change if given carte blanche to tweak or re-contour ArcelorMittal’s global research organization, Ludkovsky sounded one of several core themes that have a habit of popping up in his discussions of R&D-related topics.

“We have a huge footprint as a company. One thing that I would consider--and may still come to fruition--is recognizing the importance of critical mass by assembling a significant number of specialists in multiple fields and then bringing these people into one, two or three key locations, where the majority of long-term, more-fundamental, more-breakthrough research would be transacted. I prefer the phrase ‘multiple fields’ because most of the breakthroughs nowadays happen at the interfaces of different sciences rather than the vortex of major sciences,” he said. “Then what you want is very rapid deployment of these new developments around the world. To do that, I would establish deployment centers that would be very active and efficient in realizing solutions at multiple locations around the world.”

He is careful to note, however, that this “recipe” is tailored specifically to the corporate and geographical reach of ArcelorMittal, which Ludkovsky describes as the “one truly global steel company. In the case of a company which operates one plant in one country, such a scheme is meaningless.”

Ludkovsky, who acknowledges that his schedule is “typically overbooked,” has grown accustomed to long hours. “There is no such thing as the end of the working day,” he said, explaining that, given the global reach of ArcelorMittal’s operations, he starts work much earlier in the United States in order to catch up with his European colleagues. “A lot of the day is spent in informal meetings and decision-making,” he said. “The majority of those decisions are technical, some are organizational, and some are financial.”

Even so, the head of R&D for the world’s largest steelmaker shows few signs of waning energy or intellectual fatigue. “I have been nonstop working since 1972,” Ludkovsky said. “And it has been quite a journey. The dynamism of this business is absolutely amazing.

Much of that enthusiasm is rooted in the excitement that comes with breaking new ground. “Today, we are actually exhausting the frontiers of conventional metallurgical technology,” Ludkovsky said. “We are creating new science. The kinds of products we are developing don’t have obvious precursors, so you have to develop metallurgical foundations in addition to delivering the product.

“If you were to visit any of our 11 research centers around the world, they would look like space centers to you,” he said. “That is because the complexity--the level of depth we have to go to--requires these types of facilities. And the fact that we are able to keep up with this demand is exciting. It is actually a fun time to be researching.”

Only one of ArcelorMittal’s research centers is in the United States, which over the years has seen a steady erosion in steel-related R&D budgets underwritten by individual domestic mills along with a wholesale shift toward collaborative research conducted under the auspices of trade associations, such as the American Iron and Steel Institute, often with major funding from governmental agencies such as the U.S. Energy Department.

Ludkovsky attributes the R&D downshift in the United States to several factors. “No. 1, I believe fundamentally that the United States to a large extent has felt isolated in terms of the global landscape,” he said. “No. 2, the steel industry of the United States--mini-mills not included--has had financial difficulties for a long period. And I believe fundamentally what is equal in all of that is there is a tremendous amount of neglect at the top of the U.S. government in making sure the industrial base of America is competitive. And steel is only one component of that. To me, it is a national issue. This country is too big to be a service economy.”

The void in domestic steel R&D is being filled by global competitors. “If I look at who I am worried will become major technological competitors going forward, it is certainly the Asian economies,” Ludkovsky said. “The competition exists and is already highly effective in the economies of South Korea and Japan, and I see the emergence of good-quality Chinese competition as well.

“We are more and more competing on a global scale,” he said. “And what is the mechanism to compete? One key is differentiation in technology. And when I talk about differentiation in technology, I am not only talking differentiation in product but also in processes allowing for supremely low costs and other benefits.

“At the end of the day, the customer will choose--and they have tremendous choices,” Ludkovsky said. “And if your portfolio does not include the best choice, they will choose to go with somebody else. It may be next door or it may be thousands of miles away in China or Korea.”

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