Moving Metal

in 1981 and participating in the acquisition of theCoeur D’Alene Steel Service Center (CDA) in Salt Lake City, Utah, the next year. CDA was a carbon steel processing facility for bar, structural, plate, and sheet products. Serving Nevada, Idaho, Wyoming, and Colorado, it netted between $150,000 and $200,000 but lost about $20,000 per month. The CDA acquisition made sense: Reliance had long been considering a move into Salt Lake City, and it appeared that the oil industry would soon be expanding in the area. If Reliance could fix CDA it would be a good investment. “The market is small, but the potential is great,” Gimbel insisted. Joe Crider and Don Hollar were enthu- siastic about the potential of a small plant in Salt Lake City, and so Gimbel and Hannah made the deal. The purchase price was $1.12 million and the transaction included the 20,000-square- foot facility, all of CDA’s inventory, and a 2.5-acre plot. AGGRESSIVE GROWTH In April 1983, with Dave Hannah now performing the financial analysis, Reliance continued its aggressive growth through acquisition strategy. Circle Metals, owned by George Heuser, was a distributor of aluminum and stainless steel products based in Carson, California, with another facility in Phoenix. Reliance closed the deal to acquire Circle Metals for $8.5 million. The Phoenix location was merged into Reliance’s existing operations. The Carson plant, meanwhile, was con- solidated into MetalCenter in Cerritos to create the largest flat-rolled aluminum distributor on the West Coast. Heuser became Division Manager at MetalCenter. Heuser had some trepidation about selling his company, but he was pleasantly surprised to learn that the Reliance management did not merely allow him to maintain the autonomy that he was accustomed to—they encouraged

to help with that year’s audit and soon afterward resigned, leaving Hannah to step up and finish it. Gimbel and Crider appreciated the high quality of his work. “Dave was the best young auditor we had ever seen,” Crider recalled, “and we were getting big enough where we needed a CFO.” With the Mitsui joint venture veering toward collapse, the demand had become critical. Gimbel offered Hannah the CFO position. Hannah demurred. He was happy at Ernst & Ernst, was going to be a partner soon, and had no real interest working in the metals service center industry. He promised to help Gimbel find somebody else. But Gimbel was not so easily rebuffed. He undertook a subtle campaign to change Hannah’s mind. “He kept asking me different questions about what I liked and why I liked what I was doing,” Hannah later remembered. “Even- tually he allowed me to convince myself that I’d be better off coming to work for him.” This difficult decision was made easier by simple internal demographics. A look at Reliance’s management roster indicated that Hannah was twenty-two years younger than the next oldest officer, Joe Crider. “So I thought that if I don’t screw up too badly I could have some opportunity here,” Hannah said. He told Gimbel that he did not intend to be CFO forever. “Bill, if I come to work here, I’d like to think that I could sit in your chair someday,” he said. Gimbel replied, “Well, that’s going to be up to you, isn’t it?” That was enough for Hannah, who became Reliance’s first CFO in May 1981. Hannah was soon immersed not only in finances but also in operations, working shoulder to shoulder with Joe Crider. “I got involved in everything that there was to be involved in,” Hannah said. That included closing out the Mitsui joint venture

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