Off to the Creek Bank

Tacked to bulletin boards in the sprawling Lone Star Steel plant near Daingerfield in East Texas was a folksy message to the company's 4,600 employees: "I've got a can full of worms, a bucket of minnows and a cane pole, and I'm headed for the creek bank." Thus last week did white-haired, Stetson-hatted E. B. (for Eugene Benjamin) Germany, 69, announce his retirement after 15 years as president of one of Texas' most remarkable and controversial corporations. Continuing as chairman, Germany will be replaced as Lone Star's chief executive officer by tough, taciturn George A. Wilson, 52, who headed Dallas' TXL Oil Corp. until it was sold two months ago to Texaco for $200 million.

Chosen after a five-month search by Lone Star's board, Wilson is chipped from the same block as Gene Germany. Born in the Louisiana oilfields, Wilson got a law degree at Tulane. taught oil and gas law there until he was lured away to run a se ries of small oil companies. An avid collector of hunting rifles, Wilson relaxes by taking potshots at Texas' innumerable jack rabbits. "He must shoot thousands of them every year," says a friend. "He does it to keep his eye in practice."

"We Were Dead." Wilson's eye from now on will be mostly upon the amazing steel mill that sprang like a jack rabbit from the East Texas piney woods. Built by the Government during World War II to produce pig iron. Lone Star had yet to pour any metal when V-J day arrived. Soon after the war, the unpromising one-furnace mill was sold for $7,500,000 to an optimistic group of Texas businessmen. To run it, they chose Germany, a onetime schoolteacher and salt packer who had grown wealthy as an oilfield wildcatter. Borrowing from the Reconstruction Finance Agency, Germany added open-hearth furnaces, manufactured steel pipe and sold it to oil drillers on the promise that he could ship cheaper than Eastern mills and on 24 hours' notice. Using low-grade local iron ore to save on transportation costs, Germany made good on his promise, and before long Lone Star was one of the top suppliers of pipe in the Southwestern oilfields. With more borrowed money. Germany then launched a $40 million expansion program and broadened his product line until it ranged from reinforcing rods to air raid shelters. Last year Lone Star earned $3,559,000 on sales of $71.2 million, ran at 68% capacity compared with an industry average of 60%.

To a region that had subsisted on corn and cotton, Lone Star was a godsend. "I grew up in this town," said one Daingerfield resident. "I can remember when maybe one or two mule-drawn wagons would come to town a day. We were dead before E. B. Germany and Lone Star." Along with booming payrolls. Lone Star sponsored baton-twirling classes for girls, baseball clinics for boys, professional workshops for teachers and ministers. Employees were married and buried from a chapel at the plant.

Fire in the Ashes. Like many another Texas tycoon. Germany is politically an ultraconservative and an implacable enemy of unions. His battles against the United Steelworkers Union undid most of the good will from baseball and baton twirling. In 1957 Lone Star was hit by a 23-day strike. While Germany and 770 workers slept, ate and poured steel inside, 2,600 other employees--summarily fired by Germany--picketed outside. Pipelines were cut, bombs thrown, and nonstrikers attacked until the Texas Rangers had to be called in to end the violence. Since then, labor relations have been at least quiet. But, says one local minister, "Mr. Germany keeps stirring the ashes of the past."

Earlier this month, Germany informed his employees that since President Kennedy had blocked any increase in steel prices. Lone Star could not afford to grant the increases in fringe benefits that the rest of the steel industry agreed to in last March's labor negotiations. The union, which now boasts more members at Lone Star (2,000) than ever before in its history, is considering another strike. If that happens. E. B. Germany will not need to seek out a creek bank to find himself with a can of worms.

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