Ryerson Tull, Inc. History
Telephone: (773) 762-2121
Fax: (773) 788-4212
Incorporated: 1842 as Joseph T. Ryerson & Son, Inc.
Sales: $2.86 billion (2000)
Stock Exchanges: New York
Ticker Symbol: RT
NAIC: 331221 Rolled Steel Shape Manufacturing; 42151 Metals Service Centers and Offices; 42269 Other Chemical and Allied Products Wholesalers
Combining Resources, Creating Solutions. For Ryerson Tull this means integrating the company's extensive network of facilities, broad product line, and diverse end market experience in ways that maximize the benefits to customers. It means being the first with new technology and offering the fullest array of value-added services. It means joining resources with customers to establish strong partnerships that solve problems. And it means providing supply chain management that addresses the highly specialized needs of the customers. Key Dates:
- Joseph Ryerson opens up shop in Chicago as an agent for steelmakers.
- Ryerson rebuilds after the Great Fire.
- Inland Steel Company (later subsumed under holding company Inland Steel Industries) acquires Joseph T. Ryerson & Son, Inc.
- Ryerson subsidiary is combined with J.M. Tull Metals.
- Ryerson Tull lists on the New York Stock Exchange in a partial public offering.
- Ispat International N.V. buys Inland Steel Company; corporate parent Inland Steel Industries merges with Ryerson, renaming itself Ryerson Tull, Inc.
Ryerson Tull, Inc. sells three million tons of metal a year, making it North America's leading distributor and processor of metals. Formerly known as Inland Steel Industries, the company merged with and took the name of its main operating unit after selling off the Inland Steel Company business to Ispat International N.V. in 1998. Ryerson now has 70 facilities in the United States and Canada, as well as joint ventures in low-cost steel producing countries such as China and India.
Windy City Origins
Joseph T. Ryerson, the founder of the company, arrived in Chicago in the early 1840s. Working as an agent for a firm of Pennsylvania iron masters, he leased a shop along the Chicago River and advertised for sale such wares as sheet iron, English and German steel, buggy springs, axles, nails, and wrought iron spikes, among other products. With his inventory expanding, Ryerson acquired property and built an iron store in the city's downtown business district. By 1852, Ryerson's operation had again outgrown its space and moved to larger and more convenient facilities alongside the river, where a new dock allowed ships to deliver iron right to the Ryerson store.
In 1871 the company experienced a setback as the Great Chicago Fire devastated Ryerson's warehouse. The founder reopened in temporary quarters, however, and rebuilt his iron store on the same site. In a notice to his customers, Ryerson expressed his determination: 'I shall do everything in my power to serve my customers as usual, in my line of goods. I still live, and intend to do business, not withstanding the awful calamity that has befallen our city, and the citizens generally. I am ready for the fight against misfortune, and I trust my old friends and customers will stand by me.'
Ryerson remained owner and head of the company until 1883, when another family member, Edward L. Ryerson, Sr., took over as owner, president, and chairperson. The founder's son, Joseph T. Ryerson, II, was also an active part of the operation. During this time, the company had pared its offerings to focus on serving boilermakers, which, at the time, were Chicago's primary users of iron and steel. Ryerson also was offering corrugated furnaces for boilers and a variety of boilermaker tools. Indeed, the company would later name its newsletter, established in 1892, the Boilermaker. By the end of the decade, as railroads rapidly carved their paths throughout the country, the boiler shops and flue shops that serviced steam locomotives became increasingly important customers to Ryerson. To make room for an increasing demand and inventory, the Ryerson plant expanded several times during this period.
Expanding in the 1900s
In the early 1900s increasing industrialization allowed Ryerson to expand its product lines in serving Chicago's metal users. Specifically, the company supplied rails to a large number of steel consumers in the railroad industry, iron and steel products for farm implement makers, and the steel used in the construction of skyscrapers. In 1908 the entire operation of Ryerson moved to facilities at 16th and Rockwell in Chicago, a plant that would continue in use into the 1990s. In 1909, Ryerson moved for the first time outside of Chicago, opening a plant in New York.
As steel became more popular, so did its derivative 'alloy steel' materials. The research and applications of alloy had begun in the late 18th century, and as the Industrial Revolution spread throughout the United States, the demand for the stronger, more resilient alloy steels increased. Experiments with chromium and nickel brought the realization that a combination of elements produced a metal superior in many respects to steels alloyed with only one. The toughness and strength of nickel lengthened the service and dependability of gears, crank shafts, and other vital parts of machines used in transportation. Vanadium steel was introduced in 1907 to the U.S. automotive industry by Henry Ford. It was also used for structural steel and high-speed tool steels. Ryerson was a part of this growing trend, and in 1911 made its first offering of alloy stocks, including four grades of nickel, chrome, and vanadium steels, which were well suited for railroad, automotive, and machinery needs.
Another industry development that Ryerson was able to take advantage of was that of stainless steel. In fact, in 1926 Ryerson's stocks of the new stainless steel were among the first available anywhere. The use of stainless steel spread throughout the chemical and drug industries and to other industrial applications because of its ability to stand up against corrosive properties. In 1929 stainless steel trim first appeared on cars and became increasingly popular in the auto industry for its beautiful finish and non-tarnishing quality. Stainless also proved remarkably strong, suggesting structural possibilities and weight-saving economy. In 1934, for instance, the first streamlined train using stainless steel made its appearance in the United States; it was lighter in weight and, thus, capable of greater speeds. Other product introductions by Ryerson at this time included a line of Ryertex thermosetting plastic laminates.
Taken Inland in 1935
The acquisition of Joseph T. Ryerson & Son by Inland Steel began a relationship that would remain in effect into the 1990s. In 1935 it was announced that Inland Steel Company and Ryerson had approved a plan to merge. Inland Steel was a well-established Chicago-based steel producer, engaged in the manufacture of bars, shapes, plates, sheets, strips, rails, track accessories, and tin plate. In fact, the company ranked seventh in size in the steel industry at the time. The acquisition of Ryerson gave Inland an outlet for its products milled at Indiana Harbor and Chicago Heights. Ryerson, with ten plants in midwestern and eastern cities including Detroit, Cleveland, Buffalo, Cincinnati, Boston, New York, and Philadelphia, continued to operate as a wholly owned subsidiary. The combined assets of the two companies at the time of the merger totaled over $116 million. Edward L. Ryerson, Jr., who had taken the reins of the company in 1929, continued to lead Ryerson under the parentage of Inland Steel, until his retirement in 1953.
While wartime was a period of significant expansion for most steel companies, Ryerson, being a distributor, did not initially share such growth during World War II. The War Production Board gave low priority to shipments for service centers, reasoning that channeling steel through middlemen was unnecessary and costly. However, as government contractors began to complain when their materials were not delivered in a timely manner, Ryerson soon proved that its services were essential.
Diversified Product Lines After World War II
The postwar period was marked by expansion, both of the Ryerson product line and of its geographic scope. By 1946 Ryerson had established its first West Coast plant in Los Angeles, bringing the company's total number of service centers to 12. By 1955 the company was offering full stocks of aluminum and polyvinyl chloride (PVC) sheets, pipe, and fittings. The company's new plastics division was further supplemented by the addition of fiberglass structural shapes, pipe, tubing, bars, and sheet in 1963. During the 1970s Ryerson began converting stainless and aluminum coils into flat sheets to service special customer orders. Later, a stainless plate center and new plate processing facility were established in Chicago. Also during this time, Ryerson went through a period of acquisitions to increase its geographic presence, acquiring the Federal Steel Corp. in 1967 and, later, the Vance Iron & Steel Co. in 1975.
However, the country's steel industry began to experience serious problems in the 1960s and 1970s. Factors such as high labor costs, slowing growth in domestic markets, and declining world market share contributed to this downturn. Moreover, foreign competition intensified as did the popularity of such steel substitutes as plastic and aluminum. The decline continued, and between 1982 and 1986, the steel industry suffered a severe depression. Although certainly affected by the adverse conditions, Ryerson seemed to survive these years better than many in the industry. While other service center companies were forced to cut back during this time, Ryerson even experienced some moderate expansion, opening new facilities in Nebraska and Iowa while upgrading its headquarters and plants in Houston, Kansas City, and Milwaukee. According to an April 1984 article in American Metal Market, Ryerson reported a 1983 operating profit of $22.5 million, triple that of the previous year, while sales had increased 11.6 percent to $792.5 million. Moreover, in 1984 the company achieved its first billion-dollar sales year.
Restructuring in the 1980s and 1990s
However, to offset the declining U.S. steel market, parent company Inland Steel was forced to restructure. In its service center division, Inland combined subsidiary J.M. Tull Metals with Ryerson's service center networks to create four regional distribution units: Joseph T. Ryerson East, Joseph T. Ryerson West, Joseph T. Ryerson Central, and J.M. Tull Metals. The reorganization called for a 10 percent cut in salaried workforce, but was estimated to save the company about $10 million in 1991. Moreover, according to company officials, the reorganization allowed the units to operate closer to their markets, respond better to the needs of their customers, and be more acutely aware of competition.
In the mid-1990s Ryerson went through additional restructuring actions, seeking to consolidate some of its far-flung operations. The company announced in May 1994 that it would close its Boston outlet and move all inventory and processing to its more modern facility in Wallingford, Connecticut. According to company officials, the closing occurred because the Boston facility was inefficient and additional investment in the unit was not justified. In addition, current business volume and projected market growth did not support two Ryerson service centers in the New England market. Further analysis of business volume and projected growth prompted the 1995 closing of Ryerson's Jersey City service center, the operations of which were consolidated in the Philadelphia plant.
Despite necessary closings and the consolidation of operations, Ryerson did witness a growth in demand at its Minneapolis service center. In response the company called for an addition to that plant in 1995, resulting in a 300,000-square-foot facility with new metal processing and distribution equipment. The Minneapolis center received a laser cutting machine and another multi-torch flame-cutting machine, as well as a new overhead crane and an increase in its truck fleet.
The future of the steel industry remained uncertain. In Inland Steel's 1994 annual report, management addressed the issue of whether superior steel and a thriving distribution business would enable the company to remain profitable in a recession. Suggesting that the answer was perhaps 'no,' management looked toward redefining their business by diversification. As Joseph T. Ryerson & Son also faced such challenges, its reputation for sound leadership and service would no doubt be a valuable asset.
Despite earlier hints of diversification, ultimately Inland's management chose a strategy of consolidation and divestiture, allowing the company to focus on its strongest holding, Ryerson Tull. This unit's global sourcing capacity--a key to survival in the cost competitive industry--was enhanced by joint venture operations in India, China, and Mexico. (The Mexican venture soon boasted 18 locations. Nevertheless, by March 2000 Ryerson was planning to sell its stake to its partner, Altos Hornos de Mexico, S.A. de C.V.) While the U.S. remained the prime market for the steel industry, its higher costs for labor and raw material had many global mill companies setting up operations in Latin America and Asia.
Ryerson Tull had sales of $2.45 billion and net income of $73 million in 1995. It was described as the largest metals service center in the United States, with a market share of 9 percent. It completed an initial public offering of 13 percent of its stock in June 1996. Before this time, the company had been a wholly owned subsidiary of Inland Steel Industries (the holding company for Inland Steel Company), which now owned 87 percent of its shares.
In July 1998, Inland Steel Industries, Inc. sold its Inland Steel Company operating unit to Ispat International N.V. for $1.1 billion. By the end of the year, Ryerson Tull had agreed to merge with Inland Steel Industries. At the same time, Inland Steel Industries changed its name to Ryerson Tull, Inc. (The Inland Steel name continued to be used in those operations earlier acquired by Ispat.) Neil S. Novich became chairman, president, and CEO of the company.
The new Ryerson Tull soon made its first acquisition, buying Washington Specialty Metals from Bethlehem Steel for $70 million in February 1999. Ryerson Tull made the unit the base of its new Specialty Metals Group. The acquisition made stainless steel and aluminum Ryerson Tull's largest product group. By this time, the company was selling almost $3 billion of metals a year from more than 70 facilities in North America.
The Wall Street Journal reported that a rise in short-term interest rates in the spring of 2000 hit the steel industry hard. Ryerson Tull's sales volume fell precipitously as demand for construction equipment fell.
To survive in the coming few years, Novich told investors the company was aiming to help customers reduce their total costs through refinements in information and metal processing technologies. It participated in manufacturers' early involvement programs that allowed it a role in designing parts and processes. Ryerson's market of choice was comprised of medium to large original equipment manufacturers (OEMs), which tended to switch suppliers less frequently and to develop deeper relationships with them. They were also most likely to choose Ryerson's value-added services. These strategies helped keep revenues climbing during difficult years, reported Metal Center News, but they could do little to prevent falling metal prices from eating away at Ryerson Tull's margins.
In the last six months of 2000, Ryerson restructured, aiming to lower costs. Two regional offices and six service centers were closed. Certain corporate functions were centralized. More than 300 employees were terminated. Total cost savings were estimated to be $30 million a year. Nevertheless, profits continued to slip into the first quarter of 2001.
Principal Subsidiaries: Ryerson Tull Mexico (50%); Tata Ryerson Ltd. (India; 50%); Shanghai Ryerson Ltd. (China; 50%); IMF Steel International Ltd. (Hong Kong; 50%).
Principal Operating Units: Ryerson Tull North; Ryerson Tull South; Ryerson Tull West; Ryerson Tull Coil Processing; Ryerson Tull Procurement Corporation.
Principal Competitors: Reliance Steel and Aluminum Co.; Sumitomo Metal Industries, Ltd.; Worthington Industries, Inc.
- Beirne, Mike, 'Joseph T. Ryerson Closing Another East Coast Location,' American Metal Market, July 7, 1995, p. 4.
- ------, 'Ryerson Eyeing New Niche?,' American Metal Market, July 16, 1991, p. 5.
- ------, 'Ryerson Revamp Seen Clashing with Its Computers,' American Metal Market, November 13, 1990, p. 4.
- ------, 'Ryerson to Quit Boston,' American Metal Market, May 9, 1994, p. 2.
- Berry, Bryan, 'Inland Steel Redefines Itself,' Iron Age New Steel, August 1995, pp. 18ff.
- Bettner, Jill, 'Who's Done Better Diversifying?,' Forbes, June 4, 1984.
- Burgert, Philip, 'Ryerson to Continue Service Expansion,' American Metal Market, March 17, 1983, p. 1.
- Cochran, Thomas N., 'Offerings in the Offing: Ryerson Tull,' Barron's, June 17, 1996, p. 48.
- Fisher, Douglas Alan, The Epic of Steel, New York: Harper & Row Publishers, 1963.
- Hohl, Paul, 'Ryerson and Tull Buoy Inland's Net,' American Metal Market, January 26, 1988, p. 3.
- Kafka, Peter, 'Steel Steal,' Forbes, April 20, 1998, p. 486.
- Keefe, Lisa M., 'Reassembling Ryerson,' Crain's Chicago Business, September 3, 1990, p. 1.
Ryerson: Celebrating the First 150 Years, Chicago: Joseph T. Ryerson & Son, Inc., 1992.
- Matthews, Robert Guy, 'Rate Increases Slow Steel Industry More Than Forecast,' Wall Street Journal, June 5, 2000, p. B4.
- Mehta, Manik, 'Steel's Still-Growing Giant,' Industry Week, January 18, 1999, pp. 120-23.
- 'Merger Complete; Officers Named,' Metal Center News, April 1999, pp. 13-14.
- 'Metal Center CEOs Stress Continued Growth,' Metal Center News, July 2000, pp. 12-24.
- 'Metals Distributor Supplies Expertise As Well As Product,' Purchasing, November 19, 1998, p. 74.
- 'Ryerson Helps Pole Maker Tower over Competitors,' Metal Center News, May 2000, p. 14.
- 'Ryerson Tull Buys Washington Specialty Metals,' Purchasing, February 11, 1999, p. B31.
- Sheridan, John H., 'A Global Future?,' Industry Week, January 18, 1999, pp. 124-28.
- 'When Honeywell Swapped a Pack of Suppliers for One Close Partnership,' Purchasing, November 21, 1996, p. 50.
Source: International Directory of Company Histories, Vol. 40. St. James Press, 2001.