July/August 1999
Tri-State Iron & Metal Co. has positioned itself near the border of three states–Arkansas, Texas, and Louisiana–and earned a reputation as a crossroads where one-on-one family-style service intersects big business.
By Eileen Zagone
Eileen Zagone is an associate editor of Scrap.
If variety truly is the spice of life, then Tri-State Iron & Metal Co. is one zesty scrap recycler.
A stroll around its Texarkana, Ark., processing operation reveals the variety of scrap it handles: In one corner, large pieces of ferrous scrap are being cut down to size by a LaBounty shear. In another corner, a baler churns out No. 1 ferrous bundles.
Elsewhere, bales of OCC and mixed office paper await shipment, UBCs are unloaded from the back of a station wagon, a load of mixed scrap including steel cans and glass arrives from curbside collection sources, bare bright copper wire chops from another scrap processor are being made into a mill-ready package ... and the list goes on, along with the plant’s flurry of activity.
You could say the firm’s specialty is, well, being a scrap generalist.
Processing varied scrap is nothing less than a company tradition, says Mordecai “Morde” Glick, who founded Tri-State in 1947. Back then, he was just trying to make a go of a new business and was willing to process just about anything. And it’s a good thing, he says, because Texarkana isn’t a big city, so being flexible and handling all types of scrap was necessary to survive.
While Texarkana has certainly grown in the past 50-odd years, it’s hardly a metropolis, which means it still makes sense for Tri-State to maintain a diversified scrap diet. And by the looks of it, the firm’s extensive scrap menu has just the right amount of “spice” to enable it to continue its success story well into the future.
From Windy City to Small Town
As with many scrap recycling companies, Tri-State’s origins go back to family connections.
Though Morde hails from Chicago, a big-time scrap town, no one in his family was involved in the business. It wasn’t until he had married and finished a stint in the military that he began his scrap career.
As the story goes, Morde and his wife Betty were visiting Shreveport, La., where her family operated a scrap recycling facility. Several of her siblings had also fanned out across the southeastern United States and established scrap operations of their own.
Though Morde and Betty had intended to stay in Chicago, the housing shortage there made the offer he got from his father-in-law too good to refuse: Move to Shreveport and work for the family business for a while. Morde decided to see if perhaps the scrap industry was his calling.
Sure enough, it was.
So after working at the family scrap plant for a few months, Morde decided to strike out on his own. But he couldn’t open a plant in Shreveport and several other locations in the region without competing with the family. To resolve this problem, Morde and his brother-in-law sat down at the kitchen table with a map and decided he could start his business in Texarkana. That way, he’d avoid competing with the family, but be close enough to family members for purposes other than business.
So, with only a few months of experience in the scrap industry, Morde started his business in Texarkana with a truck, a torch, one employee, and a small parcel of rented land near the current plant. Despite his inexperience, he had the determination to succeed, not to mention family members close enough to offer advice but far enough away not to compete. He was also motivated by the need to care for his young family, which included a daughter and, later, two sons. Plus, thanks to his previous experience selling clothes in Chicago, he had well-honed sales and service skills.
When Morde started his business, there were about a dozen other scrap firms in Texarkana. To drum up business, he went door-to-door looking for about any type of scrap. “There were times I wasn’t sure I’d make it, but I just kept right on working,” he says.
Fortunately, Morde did make it. One key to the company’s success, he says, is that he was joined by his two sons, Marshall and Howard, who now run the company following Morde’s retirement a few years ago. Like many others who grew up in the scrap industry, they worked at the plant after school and on weekends. Both say their father never pressured them to join the business after college. In fact, their parents encouraged them to pursue any career they wanted, Marshall says.
But after finishing college at the University of Texas at Austin, both Marshall and Howard came back to Texarkana and decided, like their father, to make the scrap business their calling too. They’ve been permanent installations ever since—Marshall for the past 26 years and Howard for the past 23.
Processing Variety
In its 52-year history, Tri-State has evolved into a comprehensive, medium-sized scrap processor, handling an array of scrap materials and serving a variety of consumers. Today, the firm continues to be open to adding new materials to its scrap roster. For example, just a few years ago it started recycling scrap paper in a small warehouse in its nonferrous processing area. Now, the Glicks see enough long-term potential in paper recycling that they’re planning on putting up a new paper recycling operation on some of the plant’s idle land. “We gave paper a try and it sure worked out,” Howard says.
While variety defines Tri-State, ferrous and nonferrous scrap are undeniably the company’s bread and butter.
A Selco two-ram baler is the heart of the nonferrous and nonmetallic processing equipment roster. Fed by front-end loaders and a knuckle-boom loader, the baler consumes a steady diet of UBCs to prompt aluminum scrap of all types to different grades of paper and, occasionally, plastic.
Tri-State also operates an aluminum smelting furnace and casts automotive-grade aluminum sows, though the furnace has been relatively idle since aluminum prices have been so low.
Difficult market conditions have affected the firm’s ferrous area, as can be seen in the considerable piles of ferrous scrap in its plant. Shipments certainly slowed in the past year, but it’s clear from the plant’s bustle of activity that things are looking up.
The workhorse of Tri-State’s ferrous operations is a 600-ton guillotine shear fed by a 66-inch magnet crane. A LaBounty shear reduces material that’s too large to go into the shear. The firm also has a car crusher that operates to feed material to one of the area’s automobile shredders.
One of the equipment areas the company is most proud of features a Harris TGS200 baler fed by a Barko 250 pedestal crane. The high pedestal gives the operator great visibility and flexibility in feeding the baler, points out Joe Dixon, operations supervisor. But the best aspect of the operation is it only takes one person to run the whole thing: From the cab of the crane, one employee loads material into the baler and then operates the baler by remote control from the cab. In this way, the operation requires only one employee instead of two, and the lone operator can run everything efficiently and quickly from the comfort of the cab.
J.C. Culver, Tri-State’s maintenance superintendent, oversaw the design and installation of the project. And though setting up this baling system took a good bit of work, it was worth the time and financial investment, says Howard.
He and Marshall hope to make similar efficiency improvements in other areas of the plant. Their goal isn’t to reduce the company’s work force, they note, but rather to make the plant more efficient so employees can be shifted to other areas that aren’t as automated.
Service With Integrity
One of the cornerstones of Tri-State—and one of the reasons for its long-time success—is the integrity with which the Glicks approach every aspect of their business, from paying even the smallest hauler quickly and fairly to negotiating prices with an industrial account to understanding the human side of employee management.
Such integrity is responsible for building the legacy of trust the company enjoys with its customers. “We try to treat everyone fairly and be responsive and responsible,” Howard says. After all, Morde notes, there’s a lot to lose if you don’t run your business with integrity. “You can spend a lifetime building up your reputation and ruin it in just one day,” he states.
Being so devoted to the demands of service means that every day brings new surprises and challenges to Marshall, Howard, and their staff. If there’s one truth in the scrap business, it’s that every day can be expected to bring the unexpected. That’s certainly true at Tri-State. One minute, a customer calls asking for an emergency pickup of a full container. Without missing a beat, Marshall shuffles truck schedules to accommodate the customer’s request. The next minute, perhaps one of the firm’s pieces of equipment goes down unexpectedly and J.C. Culver and his crew are called on to quickly get it back in operation. So it’s good the Glicks and their staff have the flexibility to deal with the changeable nature of their business. In fact, Marshall says that one of the things he likes most about his work is that “every day brings something different.”
The big payoff for the Glicks’ devotion to service, of course, is devotion from their customers. “I don’t think we’ve ever lost a customer that we didn’t ultimately get back,” Howard says. On occasion, he notes, a customer has left because another processor offered them a better price, but seldom can any competitor meet the Glicks’ high service standards. So, after a while, the customer comes back to Tri-State with a renewed appreciation that good service may not be free, but it’s worth the cost.
Howard and Marshall are quick to point out that Tri-State delivers the same high service not only to its big customers, but to its small and medium ones as well. “We try to treat all of our customers the same, whether from an industrial account or a hauler who comes across the scale,” says Howard. “We pay promptly, offer good service, and pay fair prices—it’s how we keep our customers happy.”
The needs of over-the-scale and industrial customers are considerably different, and Tri-State understands this. To a hauler, for instance, time is critical—the quicker they can weigh in, unload, weigh out, get paid, and hit the road again, the sooner they collect more scrap to sell. Industrial suppliers, on the other hand, are more focused on the timely pickup of material from their plants.
You can see how the Glicks’ penchant for service extends to its employees who work directly with incoming suppliers. And it’s no easy task to provide great service given the dizzying pace of the firm’s drive-in trade. Though a steady stream of cars and trucks enters the plant to drop off material, there’s seldom a waiting vehicle. Tri-State’s employees quickly unload material onto one of three scales, then call the load’s particulars into the office and pneumatically send the information too.
Even though the office is busy nearly all the time, by the time customers drive around to the office, their payment is waiting for them. Plus, despite the hectic pace, the office staff take the time to give each customer personalized service and attention. Such prompt and friendly service is more than mere courtesy for Tri-State given that over-the-scale trade accounts for about half of its business, Howard notes.
To reduce its risk of buying stolen merchandise as scrap, Tri-State records the license plate and driver’s license numbers of all incoming suppliers. This practice is not only Arkansas law, it’s also just good sense—for all scrap processors, Howard asserts. “Other states are now considering asking scrap processors to take license information, and it’s got some processors up in arms,” he says. “But it’s really not that big of a deal and, in general, I think it helps to deter criminals from taking advantage of your business.”
Taking Care of What’s Important
A lot of employers say their employees are the backbone of the business, but at Tri-State that sentiment has been raised to an elevated level. And the company’s employees prove the statement’s truth in their low turnover and job dedication.
Tri-State boasts a spate of employees who have been with it 10 or 20 years. And despite last year’s downturn in business caused by poor market conditions, the company is proud to note that it hasn’t had any layoffs—more proof of its dedication to its employees.
Such dedication, the Glicks say, is the result of how its employees are treated as well as the firm’s benefits package, which includes not only health coverage and vacation time, but also a 401(k) plan and a profit-sharing program. The employee incentive program, based on production and shipments of material, shows up weekly as a paycheck bonus. “Everyone has a stake and everyone gets the reward when the material is shipped,” says Howard.
Promotion from within is also a part of business as usual at Tri-State. Beth Wortham came to work as the lone office employee more than 15 years ago and has risen through the ranks to her position today as an account executive, calling on industrial accounts. She has become “one of our most valuable assets,” says Howard. Likewise, Amy Ward, Tri-State’s controller and overseer of its office operations, health insurance, and 401(k) plan, started at the company more than five years ago as a temporary worker in the scale area and worked her way up.
Doing Things Right
In addition to building loyalty by treating its customers and employees right, Tri-State tries to run other portions of its operations in a similarly responsible, forward-thinking manner.
With regard to safety, for instance, Howard explains that the company has a very low insurance experience modifier, which lightens the burden of its workers’ compensation premiums.
To encourage employees to work safely, Tri-State has found success through an incentive program: Every employee who works a full year without a lost-time accident receives a bonus savings bond. “We want them to go to the doctor, but not lose time,” Howard says, noting that the firm also conducts safety training meetings to drive the safety message home.
Tri-State likewise takes environmental compliance seriously. For instance, all of the plant’s operating surfaces are paved, storm water management practices are in place, and all incoming and outgoing material goes through a radiation detection system.
As for the “burden” of environmental compliance, Howard says that, in his opinion, some of the environmental legislation is misguided while some of it is necessary. Superfund is a prime example of “good intentions but bad execution,” he says, explaining that when the law was conceived it wasn’t intended to hinder recycling.
To correct the problem, recyclers must get involved by talking with their elected representatives on Capitol Hill, he says.
Overall, Howard believes that such laws help weed out less environmentally sound processors. But while he stresses the need to invest in environmental compliance, he also notes that “it’s hard to compete against scrap firms that aren’t as compliant.”
Surviving Turbulent Times
Poor market conditions in the past year or so undoubtedly created a challenging environment for scrap processors around the country—and the world. But the scrap business has always been subject to the ups and downs of the markets, and established recyclers like Tri-State have long since learned how to stay buoyant in turbulent times.
One of the ways Tri-State stays competitive despite the ever-changing business climate, says Howard, is by continually examining its costs. Whether tracking equipment maintenance costs or how much labor is involved in processing a specific type and quality of scrap material, Howard and Marshall try to always know the costs associated with every particular cost center of the business.
Armed with this information, explains Howard, they can investigate ways to reduce these costs and make changes to alter the cost equations in different areas of the plant. For instance, he explains, the company keeps track of the maintenance costs for every piece of equipment it operates. At the end of the year, the data is examined and they can determine if perhaps it would be more cost-effective to replace a particular machine rather than continue maintaining it.
And, of course, another way to manage through the rough times is to invest appropriately in the good times.
“Our father has always said, ‘When times are good, you better put some of your acorns away,’” Howard recalls. That sound advice helps explain how the company has thrived through market ups and downs and other changes in the recycling industry, including consolidation.
Though the consolidation trend has certainly added some unwanted excitement to the Glicks’ day-to-day business lives, they've maintained their composure, believing that integrity, customer service, appropriate pricing, and its tried-and-true approach of handling a variety of scrap will enable their company to continue to grow into the next century.
After all, Howard says, the forces that affect the recycling industry haven’t really changed, noting, “It has always been a cyclical business, with valleys and peaks in the markets.” •
Tri-State Iron & Metal Co. has positioned itself near the border of three states–Arkansas, Texas, and Louisiana–and earned a reputation as a crossroads where one-on-one family-style service intersects big business.