Management: A Bath in Steel

As a collector and rebuilder of limp companies, California Industrialist Norton Simon owns an unrivaled record of success. From the tomato-paste base of his Hunt Foods, he has strung together an empire of two dozen corporations from publishing (McCall Corp.) to soft drinks (Canada Dry) to containers (Knox Glass). Almost every company that Simon has bought into has prospered and he has hung on to all of his major acquisitions.

Except for one. Last week Simon conceded a resounding defeat in his effort to master steelmaking. At a loss of some $654,000, Simon gave up 60% of his holdings in...