Moving Metal

Jack Roe had agreed with Neilan that management respon- sibilities and obligations should “be passed on to younger men before actual necessity made it a compelling urgency.” He therefore promised to assist Gimbel with his advice and counsel as they worked together to accomplish Neilan’s objectives. PROFITS AND PROBLEMS In 1955, Reliance began distributing stainless steel products and arranged for a salesman named Jack Moore, compensated strictly on a percentage basis, to extend its market. The initiative paid off with both profits and problems. Due in part to the expansion into stainless steel, by the end of 1955 both the leased warehouse on 37th Street and the new 26th Street facility were swamped. It was apparent to all on the Board that a new warehouse was needed, but capital was again lacking. After much deliberation Neilan authorized construc- tion of another bay at the 26th Street property to provide some short-term relief. It was completed in March 1956. The year 1956 proved to be an important one for Reliance in other matters, too. Previously, the company had rewarded employees with annual Christmas bonuses, but Reliance now began offering them profit sharing, life and health care insur- ance, a retirement plan, and a savings plan that allowed them to invest part of their wages into company-managed accounts. In September, Neilan also brought Glidden executive Henry F. Thomas aboard as a new Vice President. Thomas’ task was to take over Gimbel’s old job of internal operations, and to assist in the forthcoming transition. An even bigger change was in the company’s name. Henry Kaiser had long since diversified beyond steel. In 1956, his Kaiser Aluminum Company contacted Neilan and

to be final.” Jack Roe took on the title of Vice President in charge of external affairs, which included sales management and strategies, customer contacts, and credit affairs. Neilan also rewarded Gimbel and longtime outside counsel Bernard Hiemenz by making them Reliance Directors, bringing the total number to five. For 1952, sales topped $4.2million, with a gross profit of $1 million. In September 1953, the Board authorized the private issue of 10,000 shares of stock. As Reliance’s performance rose so did Gimbel’s star. That December, Gimbel informed his uncle that he wanted to use his Christmas bonus check to buy some of the new common stock. Neilan was overjoyed, writing back on Christmas Eve, “In pleasant memories of our very interesting conversations about acquiring ownership of an interest in the company, I am pleased to tell you that I will receive, in all graciousness, the enclosed bonus check with your signature on the back constituting endorsement of the amount of money indicated to the Reliance Steel Company as a part payment of your stock subscription. I am just as happy as you are about this,” Neilan continued, “for I know yours will be long lasting and genuine happiness in the years that future holds for you.” Gimbel now owned 120 shares of Reliance. Roe and Hiemenz each held 50. But Neilan was still firmly in control—N.J. Thomas owned 3,120 shares of Reliance as of January 19, 1954. On October 29, 1954, Neilan formally named Gimbel as his successor. In a letter addressed to all Reliance employees, Neilan wrote that “It is a pleasure to announce the elevation of Mr. Bill Gimbel to the position of Executive Vice President. For a long time we have been looking forward to the develop- ment of a line of succession in management” he continued, “and this initial step brings us somewhat nearer to our goal.”

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