Moving Metal

MetalCenter, Inc. in Cerritos. It had moved into a new state- of-the-art, 142,000-square-foot facility in Santa Fe Springs that same year, just as a nationwide recession set in. Shipped tonnages dropped by eleven percent, profits fell, costs rose, and the employee-owners could not cover them. Bankruptcy and liquidation were on the horizon. Reliance acted fast to save MCI, buying out the shareholders and returning it to the Reliance fold first as a subsidiary and eventually as a division. Within a few years MCI had recovered and had begun to expand, integrating the fixed assets and inventory of Eureka Metals Inc., which specialized in aluminum aerospace compo- nents, in 1993. As the decade approached its midpoint, there remained plenty of opportunity for Reliance to continue its acquisition drive. A large number of metals service centers had been established in the postwar years, some quite large, and those founders who had not yet sold out and retired were increas- ingly eager to do so. This presented opportunities for further national expansion by acquiring well-run, profitable busi- nesses. Strong management was in place, with solid customer relationships allowing the businesses to generally continue to operate as they had prior to being a part of Reliance. All Reliance required was the financial wherewithal to make these more sizeable acquisitions. That was becoming harder to obtain, however, because debt financing was increasingly risky in the volatile global marketplace and Reliance, as a private company, could never obtain much new equity. Reliance management, therefore, began seriously con- sidering making an initial public offering of stock. This meant selling a large number of shares to investors to raise the new capital and transforming Reliance from a private company owned by a few into a publicly traded company owned by

Reliancemerged the Lusk operations into Bralco’s Los Angeles and Phoenix metals service centers. In 1991, Reliance bought Smith Pipe & Steel in Albuquerque, and merged it into the existing Reliance Metalcenter in that city. Early the follow- ing year, Reliance and Feralloy West Company created a new joint venture by consolidating Reliance’s Los Angeles division and the Tricon Steel Service division in Fremont with Feralloy’s steel processing centers in Pittsburg, California, and Fontana, California. The joint venture was named Feralloy Reliance Company, LP, and the Fontana and Pittsburg facilities were integrated into Reliance’s Los Angeles and Fremont divisions. Reliance entered into yet another joint venture in Sep- tember 1992, this time with American Industries, forming American Metals Corporation to serve California’s Central Valley. Reliance contributed its Fresno division and $1.4million cash to American Metals, while American Industries contrib- uted operations in Redding, Oakland, and Sacramento. Each partner took a fifty percent interest in American Metals. The joint venture went operational the next summer, at its heart a $10 million, 110,000-square-foot, newly-built metals service center in West Sacramento. Also in 1992, Reliance made its first foray into the Midwest by purchasing the National Aero- space Division of National Steel Service Center in Wichita, Kansas, which stocked aluminum plate, sheet, and coil for the aerospace industry. It was renamed Reliance Metalcenter Wichita. The next year, Reliance acquired the fixed assets of the eighty-year-old Colorado firm, Supperstein Steel, which became Reliance Metalcenter Colorado Springs. Even as these promising new acquisitions were made there were disappointments as well, some small, some large. Among the former was Arnold Technologies in Anaheim, which had to be closed in 1990. And among the latter was

99