Moving Metal

ultra-modern,” insisted Crider, “we would lose market share, and we don’t intend to have that happen.” By then, however, every metals distributor in Southern California was losing business, as their chief customer— the aerospace industry—was experiencing an extended downturn. Some might have taken this as a sign that it was time to retrench, but Reliance determined that it was all the more important to grow and diversify. It was necessary, as Crider put it, “to judge companies based on their custom- ers. We can’t have exposure to one industry.” But gaining access to new markets through expansion would be fruitless if Reliance could not compete effectively in them, and Reliance had long ago learned that the best way to do that was to keep operations lean and independent. “We’ve found over time that the bigger operations get, the less efficient they become,” Bill Gimbel told Metal Center News . The goal, therefore, was to “combine the flexibility and efficiency found in a small operation with the financial stability of a large one.” Flexibility was safeguarded by the Reliance practice of having a manager in charge of a plant and making sixty the magic number for employees working at a given oper- ational unit. “Managerial responsibilities become greater than one person can competently address beyond this point,” Crider explained, “and you start building layers of management.” As Reliance redoubled its efforts to diversify through acquisition it resisted the temptation to centralize. Instead, Reliance top management maintained a light touch, delegating authority to the separate business units so that they could serve their local markets as efficiently and with as much flexibility as possible. In 1990, Reliance acquired the Phoenix operations of Heflin Steel, along with operations in both Phoenix and Los Angeles belonging to Mollins’ former employer, Lusk Metals.

By the early 1990s, Reliance had learned that the key to success, as Bill Gimbel (left) put it, was to “combine the flexibility and efficiency found in a small operation with the financial stability of a large one.” That was behind the acquisition strategy implemented by Joe Crider (right) after 1994.

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