Metal Center News

JAN 2018

Metal Center services the metal center and toll processor industry.

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N All: People, people, people. N Heneveld: It's the No. 1 limiting factor of growth. N Prine: It's even a problem when you're talking about acquisitions. In our case, it's a people problem. You can't go too fast, because you don't have the people to change the culture or whatever you need to do to grow. It's always a culture change. It's al- ways a different approach. It's hard to get enough people to do something like that. At least for smaller companies. N Kennon: If you listen to the pre- vious administration, there weren't enough jobs. Everybody in all parts of the country have had a problem with employment. There are a lot of jobs out there for people who want to work and are willing to work and have the gumption. As Keith said, most want to sit on their butt and play with their iPhone. N Heneveld: I think I speak for ev- eryone here. We probably have 5-10 positions right now that we need to fill throughout our company. N Sennett: The other part is, I think there's a bit of overcapacity. When you look at the market finally starting to get going again. There's a bit of over- capacity, when it starts to pick up. It's driving margins down because people are trying to fill up their equipment. It's not healthy. N Sabel: I was very surprised when the bubble popped in '08. We had a very bad year in '09. '15 for us was bad. But nobody went out of business. It was remarkable. There has been a little bit of consolidation in my area, where Siskin and Chatham both had a warehouse in Birmingham, owned by Reliance that made no sense to have double inventories, double employees. Each one could have taken all of the business. Finally, they consolidated in Birmingham. I imagine overall, that's a drop in the Reliance bucket, but I hope we see more of that. Duplication of ser- vices is a killer. MCN: That hasn't been a big el- ement of service center consoli- dation, reducing excess capacity. N Sabel: No. MCN: What is the likelihood of it changing in the future? N Sabel: I guess it depends on how much pain people are willing to suffer. If you have overlapping service centers that were accumulated due to buying different chains, how long are you go- ing to operate where your capacity lev- els are not at the level you need to be to make money, and competing against each other internal to their own family? It doesn't make good sense. But frank- ly, I don't know how much good sense there is in our industry. N Prine: Kloeckner had 3 locations within 100 miles, now they have one. Reliance not so much. They don't seem to be closing any of theirs. They tend to buy somebody a little bigger in size. MCN: What do you expect out of Washington, and are your thoughts the same today as they were on Nov. 9? N Sazama: I think anything that takes a consensus from the GOP is going to be as dead as healthcare reform. You're going to have a handful of righteous senators who aren't going to go along. I don't care if it's tax reform, health care reform. Fortunately, I don't think the senate has to vote on the trade thing. That will probably happen, but any other significant change, I'm very pessimistic. N Prine: You don't expect anything, and hopefully something will happen. You read about 232, it could be six months at least. N Sabel: Will the Democrats get over their Trump derangement syndrome to do something for the rest of the coun- try? It's very depressing. Next year, when senators running for re-election in Trump-carrying states, are they go- ing to fall on their swords or are they going to try to save their jobs. So far, they haven't spent any campaign mon- ey. When push comes to shove, what are they going to do? Most politicians are 100 percent self-serving. That's my glimmer of hope. N Bernstein: In the upper Midwest, things have been pretty steady. I don't share the view that politics in Wash- ington has a lot of bearing. Things like crop prices coming back and ag com- ing back are more important. It's been solidly mediocre. They were better a few years ago. If ag comes back, we'll be pretty good. N Heneveld: I think we're fortunate to have an economic system that's fairly resilient, that Washington can't impact it. Obviously, we have decent growth, the economy is fairly good, and there hasn't been anything done substantially out of Washington. To that point, maybe less is more. N " It's even a problem when you're talking about acquisitions. In our case, it's a people problem. You can't go too fast, because you don't have the people to change the culture or whatever you need to do to grow. " Fred Prine, Westfield Steel www.metalcenternews.com Metal Center News — January 2018 ❘ 21 NASA Roundtable

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