Moving Metal

PNA companies and gently began to remedy these problems. “I had to convert all their cultures into buying American and increasing their inventory turns,” he recounted. Then, events beyond anyone’s control intervened to force the PNA group to adhere to the Reliance model. In September 2008, only six weeks after the PNA acquisi- tion, the U.S. economy suddenly nosedived when the housing bubble, which had been inflating for years, finally burst. Several large and well-known financial institutions collapsed and others were badly damaged. The entire global economy felt the impact, as credit and liquidity dried up virtually over- night and trillions of dollars in wealth evaporated. Stock markets tumbled, businesses closed, over 2.8 million homes were foreclosed, and millions of people were thrown out of work. The Great Recession, as it came to be known, was the worst financial crisis since the Great Depression of the 1930s. Reliance’s leaders were no more certain than anyone else about the depth of the crisis when it first hit. Dave Hannah was optimistic during an October 16 conference call. “It’s not as bad out there as you probably think, given nothing but non-stop negative news about ‘buyer’s strikes’ and ‘demand destruction’ and all the other things that could go wrong with the economy,” he assured analysts. He did admit, “We do not know if we are in a recession or not, or just what the real economic environment will be over the next couple of quarters,” but he assured the analysts that “we have worked through more difficult times than this before and we expect to be able to do so again.” Mollins agreed. “My view of industrial America is not nearly as pessimistic as what I read in the papers or see in the news,” he said. “We have navigated our way through much more difficult markets than the one we are in now.”

Tom Gimbel

locations, EMJ had only one corporate culture. Every PNA location, on the other hand, seemed to have its own way of doing things. And while EMJ and Reliance agreed upon the fundamentals, PNA did things very differently. PNA, for example, bought most of its steel offshore. Reliance, in contrast, obtained ninety-five percent of its supply from North America, and had been purchasing more and more steel at home since the rise of the U.S. “mini-mills.” PNA was very slow in turning over its inventory; Reliance kept its stock moving as quickly as possible. Mollins took over direct oversight of the

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