Moving Metal

ten years later. The location closed in the 1980s. Ironically, it was later purchased by Earle M. Jorgensen Company, which later became a Reliance subsidiary, and so it went full circle. As Reliance was getting into Houston, it also made its first move east of the Mississippi River, purchasing the Steel Products Company in Atlanta for $2.5 million in 1975. Reliance hoped to use this Atlanta division as a base fromwhich to move into the Southeastern states, a growing market as industries moved from the recently dubbed “rustbelt” to the more prom- ising “sunbelt.” But Atlanta also proved to be a mistake. The operation there was riddled with problems and never profit- able; Reliance eventually sold it in 1987. Moreover, it was soon evident that the Atlanta base was just too small to use as a beachhead. “We learned a lesson in Atlanta,” Gimbel reported. “If we’re going to go further east, that probably means the Chicago area. And you don’t move into Chicago on a shoestring.” Another element of Reliance’s strategic plan for the 1970s was entry into the specialty metals business. Reliance was already selling low-grade structural tubing—it was, in fact, the company’s highest-margin product. Gimbel wanted to develop the ability to produce even higher-quality specialty tubing that would command even higher prices. Reliance began looking for a company in the high-quality specialty tubing business that it could acquire to meet that goal. The first talks were with Kilsby Tubesupply in 1967 and 1968. Reliance negotiated with two other companies, but each time the deal fell through. Then, in early 1976, a second chance appeared when the manager of Kilsby’s Los Angeles operation, Donald M. Hollar, contacted Gimbel. He proposed heading up a new Reliance-backed high-quality tubing company. Hollar was an expert in the field, but wanted a fresh

Joe Crider and Bill Gimbel, described by Metal Center News as “the best known management team in the service center industry.”

size of the operation and began planning to expand its terri- tory into Mexico. One of Gimbel’s priorities during the mid-1970s was to strengthen the company’s position in Texas, where high petroleum prices were fueling industrial growth in the oil patch. “We had spent probably two years trying to buy out somebody,” Gimbel reported, “but at the time there was a big boom there, and everyone felt the streets of Houston were paved with gold. Finally, in January 1975, Reliance opened its own 56,000-square-foot metals service center. Although the venture began with high hopes, the Texas site ultimately failed to meet expectations. Houston’s economy went up with oil prices in the 1970s, but came down along with them

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