DAVE BING GAINED FAME AS A guard in professional basketball. Now he is seeking fortune as a middleman in an unlikely place: the depressed steel industry.
Battered by imports, the steel industry has been a graveyard in recent years. But at Bing Steel Inc., a steel-service company in Detroit, sales are expected to reach around $45 million this year, up from $1.7 million in 1980. The company buys domestic steel and then cuts, bends, and reshapes it before delivering it to customers, who fabricate the steel into products. About 80% of Bing's customers are auto companies.
Bing laced up his sneakers for the last time in 1978, and worked for Paragon Steel Inc. Two years later, before Paragon failed, he started Bing Steel with his savings and a $250,000 line of credit from a bank that had employed him during off-seasons. Bing lost $90,000 in his first six months. "When you're black, an exathlete, and you're dealing with big bucks, there aren't many people who want to work with you," he says. That began to change when he won a small contract with General Motors Corp.
While many competitors struggled to survive, Bing relentlessly squeezed his operating costs. He bought cheap inner-city buildings, and then helped out with the paintbrush. He hired nonunion workers, each of whom performs many different jobs in the plant. And he followed the "Just-in-Time" method of manufacturing, turning over inventory more than twice as often as his competitors.
Bing Steel, which is still wholly owned by Bing, eventually benefited from being minority-owned. Some customers, Bing says, actively support minority businesses. But because many are in the auto industry, they could take him on a bumpy trip in the next recession. So Bing is diversifying his customer base. He also started a building contracting company and a fiberglass insulation distributorship. "My ambitions," he says, "don't stop with Bing Steel."