Siskin Steel & Supply Company
Address:
1901 Riverfront Parkway
Chattanooga, Tennessee 37408
U.S.A.
Telephone: (423) 756-3671
Toll Free: 800-756-3671
Fax: (423) 756-9641
http:///www.siskin.com
Statistics:
Wholly Owned Subsidiary of Reliance Steel & Aluminum Co.
Founded: 1900
Employees: NA
Sales: $159.2 million (2003 est.)
NAIC: 423510 Metal Service Centers and Other Metal Merchant Wholesalers
Company Perspectives:
Our reputation for quality and service is as strong as the products we've been supplying since 1900.
Key Dates:
1900: Rubin and Siskin Iron and Metal is formed to deal in scrap.
1910: Robert Siskin buys out his partner.
1926: Siskin dies and is succeeded by sons Mose and Garrison.
1949: A new steel distribution business is launched.
1978: Mose Siskin dies, and the third generation takes over.
1990: The original scrap business is sold.
1996: Reliance Steel acquires Siskin.
2000: Siskin celebrates its 100th anniversary.
Company History:
A subsidiary of Reliance Steel & Aluminum Company, Siskin Steel & Supply Company is a Chattanooga, Tennessee-based company that processes and distributes steel and aluminum products. Siskin serves customers throughout the southeastern United States from four service centers located in Chattanooga and Nashville, Tennessee; Spartanburg, South Carolina; and Birmingham, Alabama. Siskin is also responsible for two other Reliance subsidiaries: Georgia Steel Supply Company, located in Atlanta, and East Tennessee Steel Supply Inc., located in Morristown, Tennessee. Aluminum products include angles, cast plates, sheets, channels, handrail pipe, square tubing, and tread plate. Stainless steel products include angles, plates, sheets, rounds, flats, and squares. Carbon steel products include hot-rolled angles, round pipe, hot-rolled tees, a variety of tubing, cold-finished products, and hot-rolled products. Siskin employs integrated computers to offer value-added processing services, such as smooth, fast oxyfuel, plasma and laser cutting; the ability to shear up to three-quarters of an inch thick and 20 feet long; and sawing capabilities for beams as wide as 36 inches.
Company Roots: The Dawn of the 20th Century
The history of Siskin Steel was typical of America a century ago, essentially the immigrant success story of Robert Hyman Siskin. Born in Lithuania he came to America in a cattle ship in 1890, and like so many others, he was fleeing religious persecution. He knew little about America and after passing through Ellis Island in New York harbor he moved to Chattanooga, Tennessee, because someone on the cattle boat who was bound for the city convinced Siskin to be his travel companion. Siskin took up one of the few trades open to the newly arrived. He became an itinerant peddler. Unable to afford a horse and wagon, he carried his wares on his back and hiked to outlying rural communities in a 75-mile radius west of Chattanooga to sell his goods, only returning when his pack was empty. Like many immigrants, he saved his money until he could send for his family. In 1900 Siskin was then able to set up a business and put his peripatetic days behind him. With just $6 he and a partner launched a scrap metal business--Rubin and Siskin Iron and Metal--on a rented lot in Chattanooga.
Siskin bought out Rubin in 1910 and changed the name of the business to R.H. Siskin and Sons, although his eldest boy, Mose, was just ten years old, and Mose's brother Garrison was seven. But the boys already had contributed to the family's finances by selling milk from the family cow and hawking newspapers. The extra money was welcome, given that the 20-man scrap business operated out of a small dirt-floor shack and could not afford to buy any equipment until 1924, when Siskin bought the first company truck. Mose and Garrison did what they could, fashioning a wagon out of a soap box, and scouring the neighborhoods for scraps of metal as well as bottles, rags, and other salvageable junk.
Money may have been tight, but Robert Siskin always kept a cigar box for spare change, which he then shared with anyone in need. Just as the business was beginning to prosper, however, Siskin died in 1926, leaving the scrap metal operation in the hands of his now grown-up sons. It was Mose and Garrison Siskin who would begin to reap what their father had sewn, as the company began to experience steady growth. By the mid-1930s, despite the Great Depression, the company was doing well enough to build a new office, although in the meantime it operated out of a converted street car. With the advent of World War II came a great need for scrap metal services, as the country was desperate for supplies to convert into armaments.
It was also during the war, in 1942, that an incident took place that would alter the lives of the Siskin brothers. Garrison injured himself during a train trip when he stepped out to stretch his legs at a stop. But as he was about to reboard, the train lurched, and a steel platform cover struck his leg, causing a blood clot that became life-threatening. Given little chance to survive, Garrison was told that if he was to have any chance to live his leg would have to be amputated. Deeply religious, he spent a night in prayer, and according to family lore he asked that his life and his leg be spared in exchange for devoting the rest of his life to helping others. After he made a complete recovery, Garrison kept his word and was joined by his brother, who declared, "If it's your promise, it's my promise, and we will keep it together." Like their father they had a cigar box where they kept petty cash, and over the next few years they often drew on those funds to help people in need, to pay for groceries or to meet a doctor's bill. They also helped many people by employing them at Siskin Steel. In one case, the company installed a Braille switchboard to facilitate the hiring of a blind person. In 1950 they formalized their philanthropy by establishing the Siskin Memorial Foundation, in memory of their parents. Over the years, the foundation funded college scholarships, built wheelchair ramps to public buildings, donated playground equipment, and paid for the construction of a number of buildings close to the University of Tennessee at Chattanooga, which in addition to housing the foundation's offices was home to an outpatient clinic, a school for special children, a religious museum, and other charitable institutions. Because of Garrison Siskin's experience, the foundation placed a great deal of emphasis on physical rehabilitation. The downtown buildings eventually became the University of Tennessee Chattanooga Physical Therapy School, and in 1959 the foundation launched the 365 Club, which raised money to provide physical rehabilitation services to both children and adults. The program asked residents to donate money for 365 days of the year, even if it was just a penny. People of all ages in Chattanooga participated in what became an area institution. In 1986 a separate nonprofit corporation was established by the foundation to develop a rehabilitation hospital. The Siskin family's efforts of nearly half a century came to fruition in 1990 with the opening of the Siskin Hospital for Physical Rehabilitation in Chattanooga.
Post-World War II Move into Distribution
Following World War II, with the economy humming following a brief postwar lull, Siskin Steel continued to grow at a rapid clip. In 1949 the brothers moved beyond the scrap metal business by launching Chattanooga Steel and Supply Company to distribute new steel and related products. In time the two companies were merged, forming Siskin Steel and Supply.
Siskin expanded beyond Chattanooga during the 1960s, opening a sales office in Atlanta in 1963. It was around this time that the company was forced to relocate its scrap yard to make way for a new highway. As a result, Siskin moved to a new 40-acre lot where it kept 100 people employed. To keep pace with the company's growing distribution business, Siskin expanded and modernized its Chattanooga warehouses in the 1970s, so that they encompassed more than 400,000 square feet. Having outgrown its headquarters, the company in addition built a new office building, which opened in 1978. It was also during this period that a third generation took charge of Siskin Steel. Mose's son Robert Siskin and Garrison's son-in-law Mervin Pregulman. In 1978 Pregulman was named president and chief executive officer, the same year that Mose Siskin died. A year later, Garrison died as well.
By 1980 Siskin was generating about $50 million in annual revenues. Over the next 15 years that amount would triple, due to an effort launched in the mid-1980s to expand the company throughout the Southeast. In 1985 Siskin bought Birmingham, Alabama-based Steel Supply Company, which subsequently took on the Siskin name and became the company's first branch operation. Next, Siskin built a 100,000-square-foot steel service center from scratch in Nashville in 1989 to cut transportation costs and accommodate Nissan and Saturn auto plants in the area. Altogether the company now served seven southern states. To better focus on the steel service center industry, Siskin elected in 1990 to exit the original business, selling its ferrous and nonferrous scrap-processing assets to Commercial Metals Co.
With its attention and resources now fully committed to the distribution of new steel products, Siskin quickly moved to fill out its product offerings, adding a wide range of new sizes and grades. The company then sought to continue its geographic expansion, in particular eyeing Charlotte, North Carolina, and nearby markets. At that same time, Southern Steel Company, located in Greenville, South Carolina, was looking to be acquired. A medium-sized company, it lacked the resources necessary to grow to the next level, falling uncomfortably between the cracks--not specialized enough to compete with niche operations, and too small to go up against larger companies that could take advantage of economies of scale to offer lower prices. Although it was not certain which party first approached the other, Siskin and Southern Steel were a good fit, and a purchase price was agreed to in December 1991. Southern Steel adopted the Siskin name and began serving the North Carolina and South Carolina markets. The Greenville operation was primarily a hot-rolled sheet distributor, but under Siskin it greatly expanded its product offerings. As a result Greenville outgrew its facility, leading to the construction of a new state-of-the-art 91,000-square-foot plant in Spartanburg, South Carolina, which opened as a replacement in 1995.
A Successful Marketing Program in the Early 1990s
In the meantime, Siskin also looked to upgrade one of its Chattanooga plants, made necessary because an aggressive marketing program launched in the early 1990s proved highly successful. Sales increased significantly in such product lines as tubing, and hot-rolled, cold-rolled, stainless, aluminum, and alloy bars. As a result the company needed to expand its inventory levels. But because of the plant's location, sandwiched between a highway and tracks of the Norfolk & Southern Railroad, expansion was a challenge. Fortunately the railroad agreed to move some of the tracks, which were seldom used, allowing Siskin to find enough room to add about 20,000 square feet to its plate and structural bays on the north side of the facility. On the other side, however, where tubing and bar products were stored, there was no hope of moving the highway. Siskin solved this problem by tearing down the 45-year-old tubing warehouse and replacing it with a more efficient warehouse, thus expanding the tubing storage area by 20,000 square feet. The company still had a problem storing bar products, with no easy solutions available until it learned about a new automated, bar-code driven storage and retrieval system offered by a German company. Siskin became the first U.S. service center to purchase the new system. All told, Siskin spent about $8 million expanding the Chattanooga plant.
In fiscal 1995 Siskin posted sales of approximately $151 million. The company now reached a crossroads. The steel industry was undergoing a period of consolidation and in order to remain competitive and continue to grow, Siskin needed to join forces with a larger company. Like Southern Steel, it found itself in the difficult position of being too big to be small but not big enough to get bigger. Over the years, Siskin had been courted by a number of suitors. Then in 1996 it found a company that appeared to be a good fit, Reliance Steel & Aluminum, which it approached about an acquisition. In October 1996 Reliance agreed to buy Siskin for $71 million.
Reliance was 40 years younger than Siskin, founded in Los Angeles in 1939 by Thomas J. Neilan as Reliance Steel Products Co. It originally produced steel reinforcing bars for the construction industry, then in 1948 added aluminum and magnesium products. The company adopted the Reliance Steel & Aluminum name in 1956 and launched an expansion program, relying primarily on acquisitions. In 1966 Reliance moved into Texas and in 1975 attempted to enter the southeastern United States, but an Atlanta operation did not work out and was sold in 1987. Other acquisitions in the 1980s proved more successful, as Reliance bought companies located throughout California, as well as Utah, Arizona, New Mexico, and Kansas. In 1994 the company went public, using the proceeds and its stock to fuel further acquisitions. A major part of Reliance's bid to expand beyond the western half of the United States was the purchase of Siskin, which was the company's largest acquisition, by far eclipsing the $25 million purchase of CCC Steel Corp. several months earlier.
Reliance was more than happy to allow Siskin to continue under its current management. Reliance President David Hannah told the Chattanooga Times, "Siskin is a well-managed company and we're going to try to stay out of their way and let them continue to grow." A fourth generation of the founding family stayed on to run the company in the form of John Pregulman, Mervin Pregulman's son, who was named president and chief operating officer. In 2000 Siskin reached its 100-year anniversary still under family management having grown from two employees to 600. With its new corporate parent, the company had the resources to continue growing. In 2000 it acquired East Tennessee Steel Supply Inc., a Morristown, Tennessee-based company that processed and distributed carbon steel plate, bar, and structurals.
With the economy struggling in the early years of the new century, Reliance and Siskin did not enjoy the best of times. Nevertheless, they fared better than many in their industry, remaining profitable and continuing to grow market share. In 2002 John Pregulman left Siskin, replaced as CEO by Jerry Pearson, leaving only one member of the founding family involved in the business: Assistant Vice-President in Accounting David Binder, grandson of Mose Siskin.
Principal Subsidiaries: Georgia Steel Supply Company; East Tennessee Steel Supply Inc.
Principal Competitors: Olympic Steel, Inc.; O'Neal Steel, Inc.; Shiloh Industries, Inc.
Further Reading:
- Anderson, Lee, "Siskin--'Only in America,'" Chattanooga Time Free Press, October 1, 1996.
- Flessner, Dave, "California Firm Buys Siskin Steel," Chattanooga Times, October 1, 1996.
- Haflich, Frank, "Reliance Steel Set to Purchase Siskin," American Metal Market, October 3, 1996, p. 2.
- Regan, James G., and Michael Marley, "CMC to Buy Siskin Units," American Metal Market, August 7,1990, p. 1.
- "Siskin Celebrates Its Centennial," Metal Center News, April 2000, p. 20.
Source: International Directory of Company Histories, Vol. 70. St. James Press, 2005.
