When F. Kenneth Iverson was a young metallurgy student at Purdue Univiersity, he got his first close-up look at big steel. He never forgot it.

"We took a field trip to a big, integrated steel producer," Iverson recalls. "This was the late afternoon. We were going through tbe plant and we actually had to step over workers who were sleeping there. I decided right then that I didn't ever want to work for a big steel company."

If Iverson does get stuck in big steel, he will have only himself to blame. When he took over Nucor Corp. in 1965, it was a small company, a battered miniconglomerate with steel-fabricating units as its only profitable divisions. But through technological innovation, a carefully targeted product strategy, and a lavish employee incentive plan, the 58-year-old industrialist has transformed Nucor into a whoppingly successful $540-million steel-maker and -fabricator.

Iverson's impact has gone far beyond his own Charlotte, N.C.-based company, however. Nucor is small by industry standards -- a mere 10th the size of United States Steel Corp. in steel revenues. But as a highly visible and successful champion of the new approach to the steel business, Iverson has played a key role in creating the minimill, a new and dynamic player in the generally moribund smokestack sector. From 1960 to 1982, undercut by low-price imports, America's integrated steelmakers saw their domestic market share drop from 92% to 60%. Over the same period, minimills, which now number some 60 plants among about 35 companies, have increased their market share from 3% to 18%. Iverson, a strident critic of import quotas, is happy to compete head-to-head with the Japanese and other foreign steelmakers, routinely undercutting them.

Nucor employs three main strategies that allow its minimills to cut costs. By using electric arc furnaces to melt scrap steel in its four plants, Nucor avoided the huge capital investment required to build a plant for making steel from iron ore. By producing a narrow range of products in each plant, Nucor gained the economies of specialization and the maximum benefit of up-to-date continuous casting techniques. And by offering hefty incentives to boost worker productivity, Nucor slashed the man-hours it needed to produce each ton of steel.

Ken Iverson's Nucor is not alone in the minimill steel revival. But he is the paladin of the trend, the inspiration to a new generation of fiercely competitive steelmakers. "He's the absolute leader," says James Mertz, president of Calumet Steel Co. a small mill south of Chicago that struggles to compete with Nucor. "In strategy, in philosophy, in plant location, in how to construct a plant, in motivating a work force, in meeting a market, he's the one to follow. He's a great operator."

"Iverson has changed the rules of the garae," agrees Donald F. Barnett, former chief economist for the American Iron and Steel Institute and co-author of the new book Steel-Upheaval in a Basic Industry (Ballinger Publishing Co., Cambridge, Mass.). Iverson and the other minimill operators, he says, are essentially reinventing the steel industry.

Iverson's first task was to reinvent Nucor. When the lank midwesterner was promoted to the presidency of Nuclear Corp. of America in 1965 -- after nearly 20 years in the metalworking industry -- he found a hodgepodge of unrelated, unprofitable operating units, from a leasing business to a construction company. Only the steel-joist division, the unit Iverson had been running, was a money-maker. So Iverson started selling, paring off everything but the fabricating divisions, a rare-earth producer, and a nuclear instruments maker, creating what was, in effect, a start-up company, with $900,000 in equity and a $6.5-million tax loss carry-forward.

With the joist business running a healthy profit, Iverson decided in 1968 that the company needed its own source of steel. "I don't remember it as a difficult decision," he recalls, although the risk was so great that he had to change banks to find the necessary $3 million in capital. "It just seemed like a logical thing to do.

"But once we had the fat in the fire, that's when we got a little scared," he admits, his flat midwestern voice tinged with a hint of southern drawl. "We had to bet the company, yessiree."

Iverson's new plant was modeled after those run by the Bresciani, a group of Northern Italian minimill operators who sprang up after World War II, using cheap scrap steel and honing the electric-arc technology to carve out a sizable slice of the European steel market. Nucor, serving as its own general contractor, broke ground for the rural South Carolina plant in September 1968; nine months later they were pouring steel. Local sharecroppers, carpenters, and teachers were hired to work the plant -- a work force, Iverson says, that would initially prove a mixed blessing. None had ever been in a steel mill before, so they were nonunion and in thrall to no outmoded procedures or work rules. But when the furnace was first tapped, they were so terrified at the sight of molten steel that they bolted from the building.

Today, 14 years later, Iverson has molded that work force into one of the most productive in the steel industry, producing almost twice the steel per man-hour as workers in the large companies. From the outset, Nucor workers have been motivated by a generous, and simple, plan: the more steel produced, the more money earned. Although technological improvements have boosted production levels dramatically, the base level on which the bogus is figured remains unchanged.

That same bonus policy extends to the executive suite. Members of the corporate staff, from Iverson on down, depend on productivity or profitability-based bonuses for as much as 50% of their income. Management is kept lean to ensure its responsiveness to workers, to manufacturing improvements, and to the marketplace. When Nucor was reconstituted in 1965, it had a corporate staff of 2; today it stands at just 16.

If Iverson ever did get his hands on a really big steel company, it would be management that he would want to awaken.

"I've thought about it," he admits. "I really have. The biggest hurdle would not be the union. The biggest hurdle would be the management, with its deeply ingrained methods of operating -- all those layers of management. You'd have to tear it all apart and start over."

Not that Iverson has any desire to work in big steel. The lesson he learned as a young metallurgy student -- and the lessons he has learned at Nucor -- have convinced him that his future and the future of the industry lie in the minimills he pioneered. Besides, he plans to stay at Nucor for some time yet: Mandatory retirement age there is 95, Iverson notes wryly.

"We're not overseeing the demise of the steel industry," he says. "We're seeing its transformation into a high-tech business."