Clark Memorandum: Fall 1988 J

Brigham Young University Law School BYU Law Digital Commons The lC ark Memorandum Law School Archives Fall 1988 Clark Memorandum: Fall 1988 J. Reuben Clark Law Society of the J. Reuben Clark Law School Follow this and additional works at: https://digitalcommons.law.byu.edu/clarkmemorandum Part of the Entrepreneurial and Small Business Operations Commons, Legal Education Commons, and the Religious Thought, Theology and Philosophy of Religion Commons Recommended Citation J. Reuben Clark Law Society of the J. Reuben Clark Law School, "Clark Memorandum: Fall 1988" (1988). The Clark Memorandum. 6. https://digitalcommons.law.byu.edu/clarkmemorandum/6 This Article is brought to you for free and open access by the Law School Archives at BYU Law Digital Commons. It has been accepted for inclusion in The lC ark Memorandum by an authorized administrator of BYU Law Digital Commons. For more information, please contact [email protected]. CLARK BNceC Hafen CONTENTS Dean Claude E. Zobell, Jr Editor Rescue Mission Susan Adams Vincent S. Moreland Associate Editor Bridges Charles D Cranney Elder Dallin H. Oaks 10 ProductionlCopy Editor The Study and Practice of the Laws of Men Light of the Laws of God Linda A Sullivan in Bruce Patrick Elder James E. Faust 16 Garin Ipsen Designers Letter from the Dean 21 John Snyder Memoranda 22 Photo Editor I Update Faculty Notes 34 Class Notes 38 Fall 1988 The CIicrk Memorunduiii IS published by the J Reuben Clark Society of the J Reuben Clark Law School, Brigham Young University. The articles do not necessarily reflect the opinions of these organizations Copyright by Brigham Young University, 1988 All Rights Reserved Cover photograph courtesy of Geneva Steel Works. James J. Tissot painting used by permission CLARK MEMORANDUM As recently as July 3 1 of head the air division. In peak capacity the plant USX executives was Phillip [last year] Geneva Works 1985 he moved to Pillsbury’s provided 5,000 of the most Masciantonio, a vice- and the jobs of some 1,500 growing, forty-lawyer highly paid hourly wage president in the company’s rehired workers looked to be environmental group. jobs in the state-plus at environmental affairs dead in the water. Amid His years in the capital least that many positions in division Looking for advice ultimatums and deadlines, a did nothing to dampen allied industries. But From someone who had ties tense drama of delicate Joe Cannon’s American Geneva was an economic to both Washington and negotiations was played out, heartland style or weaken anomaly: What was a Utah-and to Geneva- reaching a climax that his strong ties to his full-fledged steel mill doing Masciantonio thought of Joe involved Utah Senator Orrin Mormon faith. He belonged in Utah, far from major Cannon, whom he had come Hatch, USX corporate chief to one of Washington’s waterways and supply to know during Cannon’s David Roderick, and scores Mormon networks, a group sources? tenure at EPA. In February of lawyers, executives, of government officials and Built in the early 1930s 1986 Masciantonio put in a bankers, and accountants professionals who main- by the U S. government to call to the Washington lawyer Joe Cannon doesn’t fit tained a community of supply steel to West Coast Cannon immediately the part of the big-time fellowship far from the defense industries, the plant understood the potentially leveraged-buyout deal- religion’s natural center in had been located in the Utah devastating effect Geneva’s maker. Plump and cheerful, Salt Lake City He was a mountains to place it closing would have on his he peppers his conversations member of a Mormon beyond the range of home state. He volunteered with “golly” and “jeepers” congregation in Vienna, Japanese bombers. In 1946 to tap his Mormon business and projects a casual, Virginia, the same one USX-then called U.S network. Says Cannon: disarming style not usually Orrin Hatch belongs to (In Steel-bought Geneva “What I thought is, I’ll call associated with the fact, Cannon substituted for Works but never bothered to up some entrepreneurial mastermind of a risky, the senator when he was modernize the aging types out in Utah, they’ll high-stakes takeover unavailable to teach his equipment. Still, the mill buy the steel plant, and I’ll Cannon says he never usual gospel doctrine class.) was well maintained and the be their lawyer ” dreamed of becoming a Cannon kept up his close work force was among the But Cannon’s solicita- businessman, let alone the ties to Utah, too, where company’s most productive. tions to potential buyers met head of a steel mill. The he’d been born into an old Over time, though, the plant with instant rejection They limits of his ambitions were family of Mormon leaders evolved into a steel-industry refused even to consider always confined to the law (His great-grandfather was dinosaur. investing in Geneva. Recalling when he became a the state’s territorial By the mid- 1980s, the “Everybody said they Pillsbury partner in 1985, he delegate to Washington.) He mill’s future looked thought it was the most says, “My whole life-since knew Utah’s economy was particularly bleak. Hurt by idiotic idea they’d ever I was young-I’d always faltering and that thousands the influx of foreign steel, heard,” Cannon recalls with wanted to be a partner at a of workers, many of them Geneva’s profits declined a chuckle. But he received a major-league law firm ” fellow Mormons, were out along with those of the rest more optimistic response A 1977 graduate of of work Among the of the American steel from several steel industry Utah’s Brigham Young businesses and industries in industry The main buyer of consultants he knew through University Law School, trouble was Geneva Works. Geneva steel was another his work at the EPA. If Cannon decided to practice As an EPA regulator, USX plant in California, but managed properly, they told in Washington, D C “1 Cannon had once toured the that market was scheduled him, the plant had the really like Washington- mill in Orem, a small city 50 to dry up In 1985 USX had potential to make money. power, fame, and glory,” he miles south of Salt Lake entered into a joint venture Joe Cannon turned to his says. After stints in the City Orem is near Brigham with a Korean concern to brother Christopher, then an D C offices of Philadelphia’s Young University, where he modernize the California associate solicitor at the Morgan, Lewis and Bockius had spent seven years as an facility. Geneva’s steel Department of the Interior and then Houston’s Andrews undergraduate and as a law wouldn’t be needed after the Only fifteen months apart in & Kurth, Cannon in 1981 student There was a closer project was completed in age, the two have always joined the Environmental connection as well While 1989 But closing the Utah been close, though they Protection Agency, where he was at school, his wife plant would mean massive offer a sharp contrast in he worked his way up to had worked as a secretary at cleanup costs-stimates attitudes and styles While Geneva “The plant,” ran as high as $30 million- Joe had headed straight into Susan Adams is a writer for Cannon likes to joke, and considerable political a legal career, Chris instead THEAMERICANLAWYER This “actually put me through damage for USX at a time had attended a year at article is republished withper- law school.” when it was struggling and Harvard’s business school, mission from the December 1987 Over the years, Geneva needed a sympathetic ear in then tried buying and issue of THE AMERICAN LAWYER Works had played a strong Congress. running a trucking company 0 1987THEAMERICANLAWYER role in Utah’s economy. At One of the concerned before becoming a lawyer CLARK MEMORANDUM Chris was a frustrated entrepreneur at heart, and as he talked with his brother he recognized in Geneva Works another chance to make it in business. He urged Joe to acquire the plant himself, volunteering to form a team with him. Even if they couldn’t make a go of Geneva, Chris was convinced that purchasing the mill for its real estate value, scrap metal, and machinery would be a wise business move. At first the idea seemed outrageous to Joe. He was no businessman. In nine years as a lawyer, he had gained only the most rudimentary experience in transactional work. But if he didn’t act to save Orem’s steel mill, who would? Using the information they had gathered from consultants, Joe and Chris mapped out rough financial projections on a chalkboard. “It was a decision on two levels ,” Joe recalls “There was a heavy emotional component here . [but] I don’t believe you can do a deal just for charity The deal has to make sense ” The more Joe and Chris thought about it, the more the deal did make sense intended to cut costs across Joe Cannon’s uncertainty JOSEPH CANNON There were several ways the board-mainly by nego- about his role at the firm Geneva could become a tiating a new union agree- was to continue for many profitable enterprise ment and lower-cost con- months. Meantime he took One way was to remove tracts with local suppliers. decisive action: At a meet- on the deal and bill it to the corporate restrictions. USX The projections looked ing in Pittsburgh in June new corporation as partner- distributes its overhead promising, but Joe hesi- 1986, the Cannon brothers hours.

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