Steel: The Maverick Steps Out

Bristling at his reputation as a steel-industry maverick, Joseph L. Block recently protested that “we just do what everybody else does, but we try to do it better.” When Block, 65, steps down this week as chairman of Inland Steel Co., most people will admit that he has done pretty well. The nation’s seventh biggest steelmaker, Inland has consistently outperformed its larger rivals in such key areas as return on invested capital, and proved itself equal to withstanding economic recessions.

As the only major steel producer based in Chicago, Inland has long capitalized on the lucrative Midwest steel market. With all its production concentrated at its huge Indiana Harbor complex in nearby East Chicago, the company sells 70% of its output within a 200-mile radius. In recent years, however, other major steelmakers have rapidly expanded their Chicago-area operations—and Inland has lately been feeling the pinch.

Striking Addition. Suffering with the rest of the industry, Inland last week reported that earnings through the year’s first nine months had dropped 29% from 1966 levels. Among other things depressing profits is the cost of Inland’s ambitious modernization, including its first basic-oxygen furnace shop and a new computer-controlled hot-strip mill. His eyes turned toward the future, Joe Block has logged $250 million in capital expenditures over the past two years, huge outlays for a company with an annual sales level of about $1 billion.

The grandson of an Inland founder and son of a longtime chairman, Block worked at every end of the business from mill hand up. Elected president in 1953 (he became chairman in 1959), he strengthened Inland’s tradition as a civic-minded company by playing a prominent part in the fight for Illinois’ fair-employment law, pushing a redevelopment program for East Chicago and, in 1957, putting up Inland’s 19-story glass-and-steel headquarters, one of the most striking additions to Chicago’s Loop since the Depression.

Block made his major reputation as a maverick through his refusal to join the rest of the industry in raising steel prices during the abrasive 1962 confrontation with the Kennedy Administration. Block, an Eisenhower Republican, answered the grumbles of other steelmen by denying he was cozying up to the Administration, insisting simply that “it was the wrong time to raise prices.” Since then, he has repeatedly complained that Washington has made steel its “favorite whipping boy,” last year pointedly took the industry lead in raising steel prices.

Dominant Role. Inland is far from being a family company, but the Block clan, which owns less than 5% of the stock, has long played a dominant role in its fortunes. Chosen last week to succeed Joe Block was his cousin, Vice Chairman Philip D. Block Jr., 61, whose father was Inland’s first president. Having worked so long in Joe’s shadow, Phil is regarded as a chip off the old Block who will pretty much continue his predecessor’s policies.