Joseph T. Ryerson & Son, Inc. Business Information, Profile, and History
Chicago, Illinois 60680
History of Joseph T. Ryerson & Son, Inc.
Under the parentage of Inland Steel since 1935, Joseph T. Ryerson & Son, Inc. is a Chicago-based steel concern, with plants in 29 U.S. cities. As a part of Inland's Materials Distribution Group, the company processes and distributes carbon, stainless and alloy steels through its "service centers."
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. Two years later, 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 lake 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.
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 America, 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.
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 totalled over $116 million. Edward L. Ryerson, Jr., who had taken over the reins of the company in 1929, continued to lead Ryerson under the parentage of Inland Steel, until his retirement in 1953.
While war time 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 channelling 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, and the War Production Board agreed.
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 April 1967; the Vance Iron & Steel Co. in June 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.
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 ten percent cut in salaried work force, 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.
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