January/February 1998
Frank Sherman Co. takes family values seriously, and that’s why this Ohio scrap processor points proudly to its four generations of family leadership and 100 years in the business.
By Kristina Rundquist
Kristina Rundquist is an associate editor of Scrap.
Jeff Klein was 12 when he started accompanying his grandfather to the family scrap business—Frank Sherman Co. in Youngstown, Ohio—which just so happened to be about the same age his grandfather started going with his father to the plant.
Every Saturday, Jeff would faithfully trail after his grandfather through the facility, and he soon came to realize that this was where he belonged—working in the family business.
While this age-old story of a boy following in his father’s—or, in this case, grandfather’s—footsteps is hardly unusual, the fact that Frank Sherman Co.’s family tradition has continued for 100 years through four generations is certainly worthy of mention.
Along the way, the firm has not only weathered difficult times—virtually restarting from scratch at one point—but in the process has evolved from a horse-and-wagon operation into a company encompassing three plants in Ohio and Pennsylvania that process more than 250,000 tons of ferrous and nonferrous scrap annually.
But that will change soon, as the company plans to consolidate its two Ohio operations into a larger, upgraded site. In other words, though the company has a long past defined by strong traditions, it also has a farsighted view of its future in the scrap industry.
A Family Affair
It’s a gray, cool November day in Youngstown outside Jeff Klein’s office, which looks out on the firm’s headquarters facility, the site where his great-grandfather—Frank Sherman, the company’s namesake—formally rooted the business in 1926.
But the family’s and the company’s scrap roots extend much further into the past, to 1898 to be exact, when Frank—a Lithuanian immigrant—began collecting rags and other scrap items, making the rounds through the streets of Youngstown in a horse-drawn wagon.
As he became increasingly successful, he set up a small scrap yard, eventually moving his business to its current Youngstown headquarters site. Frank initiated the firm’s family tradition by frequently bringing his two young sons—Seymour and Joseph—to the yard. As the boys grew, they helped at the company after school and during summer vacations from college.
When Frank died in 1941, his sons took the reins and ran the company until World War II called them to service, with Seymour enlisting in the Army and Joseph joining the Navy as a scrap procurement agent. During their service, they entrusted the management of the firm to their sister and a business partner.
When they returned five years later, the company was a far cry from the successful processing operation they had left. The firm, in fact, had lost 50 to 75 percent of its value and many of its accounts. It was like starting from scratch. But the brothers worked together and persevered, rebuilding the company’s scrap metal business and even venturing briefly into the scrap paper market.
Joseph and Seymour continued to rebuild and grow Frank Sherman Co. together until 1971, when they went their separate ways, with Joseph buying out his brother’s share of the firm and bringing in his son-in-law—Jack Klein, Jeff’s father—as a torchcutter. When Jack joined the firm, he was in effect trading one family business for another. He had previously worked for a health and beauty supply company run by his sister’s husband, and it was during that time that he met Joseph Sherman’s daughter—and his future wife—Susan.
Jack quickly learned the ropes of his new trade, however, and just as quickly ascended the company’s management ranks, being promoted to vice president in 1973 and becoming president six years later.
True to Frank Sherman Co.’s all-in-the-family ethic, Jeff’s mother, aunt, and grandmother were also involved in the family business through the years, operating a thrift store in the building where the company’s fleet of trucks is now repaired. From this site, assisted by her two daughters, Jeff’s grandmother sold a variety of goods, including toys, new and used clothing, and more.
With that kind of family tradition, it should come as no surprise that Jeff decided to join the business. Those Saturday trips to the yard with his grandfather, he says, cemented in him the idea that he would one day work there. “I’d spend Friday nights with my grandparents, and my grandfather would take me to breakfast Saturday mornings,” he recalls. “Then we’d come here. I’d play in the warehouse and sit around and watch him work. The high point would come when he’d take me for rides in the plant’s golf cart.”
When he turned 16, Jeff started working summers at the plant, learning to clean and sort metals. “I think that’s when I knew this was what I wanted to do,” he states. And through college, he adds, “every course I took was with the goal of eventually coming back here to work in the business.”
After graduating in 1991 from Babson College, Jeff officially joined the firm full-time as president of its Castle Iron & Metals Inc. division in New Castle, Pa., and vice president of Frank Sherman Co. Jeff also currently serves as treasurer of ISRI’s Northern Ohio Chapter.
Taking Care of People
Frank Sherman Co. has obviously been a family affair, taking care of four generations of Shermans and Kleins for more than a century. But the firm’s family tradition doesn’t stop there. According to Jack, the company tries to run a “family-type business,” meaning it strives to be “very good” to its employees. “My father is a very giving person,” Jeff asserts, noting that “he does things for our employees that he doesn’t have to do and that others might not do.”
In addition to providing full health benefits and “all the paid holidays,” Jack notes, the company gives its employees professional growth opportunities by actively promoting from within. Ken Greco, the firm’s executive vice president, started as a torchcutter, for example. Peter DeStasio, one of the company’s two plant supervisors, began as a welder and mechanic, while Dennis Tillis, the other supervisor, came on as a torchcutter and general laborer. The dispatch manager, Dominick “Butch” DeStasio—Peter’s nephew—started as a truck driver.
The company is equally dedicated to the professional development of its employees off the job, as Butch can testify. This spring, he’ll graduate from Youngstown State University with a degree in business administration, thanks to the firm’s tuition support.
By being loyal to its employees, Frank Sherman Co. has reaped rewards in the form of reciprocal loyalty from them, which is reflected in the length of service of many of its staff, some of whom have been with the firm more than 25 years. One—Marlene Hlinka, the office manager—has served almost 30 years. Dennis has been with the company 20 years, noting that “Jeff’s grandparents were always good to me. The whole family has always been very good to me. They take care of their people.” Ken concurs, noting that “our employees are great and we take them, their jobs, and their families very seriously.”
As he sees it, much of the company’s success can also be attributed to Jack’s leadership, especially his philosophy of encouraging input from his employees. “He’s very open to ideas and has allowed people to run with them,” says Ken. “If the idea doesn’t work, we’ll change things, but Jack certainly has said yes to the right things over the years. He’s the driving force behind the company.”
The firm also looks after its employees by striving to have a safe and environmentally sound workplace. “We hold weekly safety meetings and regular training sessions about health and safety issues in which the supervisors also participate,” Jeff says. “More than that, we send our supervisors to courses and attend all the ReMA seminars.”
In addition to having an environmental expert on retainer, the firm drills its employees on emergency cleanup procedures. “I think we’re lucky in that we have such conscientious employees,” Jeff says, noting that the second they see an unsafe working situation or a potentially worrisome environmental event such as a fluid spill, they immediately respond to fix the problem.
The firm has also addressed its storm water compliance requirements by participating in the ReMA storm water group.
It’s a Customer Thing
Another driving force behind Frank Sherman Co.’s longevity is its attention to its customers, with Ken noting that “like most successful companies, we’re very customer-oriented.”
Part of this service commitment can be seen in the company’s quality control procedures. All sorting and cleaning of scrap is done by hand, and material is double-checked for content and quality at every step of the preparation process. “We do an awful lot of testing,” says Jack, noting that “the business is becoming more sophisticated in that mills are requiring processors to be more knowledgeable about what they buy.”
To meet its consumers’ higher quality expectations, Frank Sherman Co. has purchased metal-analysis equipment such as a portable spectrographic analyzer from Arun Technology Inc. (Dearborn, Mich.). Among its benefits, this machine “has enabled us to buy certain types of scrap that we were afraid to handle before because we weren’t exactly sure what it would do to heats,” Jack says.
The firm’s service focus is also evident in its fleet of 30 trucks and more than 1,000 containers, which guarantee prompt service and the right kind of service for each scrap supplier and consumer. “We run 10 roll-off trucks a day, five luggers, three demolition trailers, and a couple of small dump trucks,” Jack says. “Some of our drivers are on-call seven days a week because their accounts require that level of service.”
As Ken notes, “Our drivers wear beepers so that if a plant needs them to make a pickup, they can be paged directly. The drivers develop a rapport with the plants they serve, and some plants even ask for specific drivers. In fact, in one of our recent negotiations, the supplier insisted that a certain driver would continue to service their facility. We want to be sure that we do the right thing every time we go into a plant.”
Also notable is Jack’s personal involvement in maintaining the firm’s long-standing relationships with many of the company’s suppliers and consumers. “One reason people call us is because they know that when they ask to speak with Jack Klein, they’re not going to get an account executive, they’re going to get Jack Klein,” Jeff notes.
This type of individualized customer service is obviously a point of pride for Frank Sherman Co.’s executives, as well as a significant key to its success. “I think we’re very attuned to our customers and that helps us maintain a loyal customer base,” Jack asserts.
Movin’ On
For its first 85 years, Frank Sherman Co. was a one-plant processor, operating exclusively from its 4-acre facility in Youngstown.
In 1983, however, the firm entered its acquisition mode and became a two-plant entity when it acquired Wilkoff Co., a crosstown Youngstown processor that the firm subsequently renamed Selsu Industries Inc. Soon thereafter, in 1987, the company upped its holdings to three plants by buying H. Wolfe Iron & Metal Co. (New Castle, Pa.), now its Castle Iron & Metals division.
In addition to expanding its scrap processing operations, Frank Sherman Co. has also branched out into the demolition business, establishing KGK Wrecking (KGK being an acronym for Klein, Greco, and Klein) about two years ago. This fledgling firm has spent most of its time thus far on a joint-venture project in Midland, Pa. “We also do demolition jobs around here and as far away as Baltimore,” Jeff explains. “We tear everything down, handle the environmental cleanup and disposal, if necessary, and then recover the scrap.”
While the company has expanded, it has purposely remained tight-knit and has maintained its community ties. Frank Sherman Co. supports many local charities, says Jack, noting that charities will often enlist the aid of one of his customers to help persuade his company to support their cause. “None of them will get turned down,” he says, laughing.
The firm’s strong ties to the Youngstown area were definitely a factor when it began thinking about consolidating its Frank Sherman and Selsu Industries plants into a new, larger site. To be sure, when the firm moves its operations this year, it won’t be moving far. It will exchange its two Youngstown facilities—which cover only 13 acres combined—for one 27-acre site in nearby Girard, Ohio.
Among its features, the new site will have a 6,000-square-foot office and dispatch station, as well as a newly refurbished 20,000-square-foot warehouse. The facility has 27 rail lines passing through it—a far cry from the single-rail access at the current Selsu Industries plant. Also, while the site already comes with 25,000 square feet of hard-surfaced operating area, the company is pouring an additional 15,000 square feet. Moreover, Jeff notes, “our time clocks, trucks, and scales will all be tied into the new computer system, and when we’re finished, our truck and rail scales will be fully automated to the books.”
In terms of operational advantages, the new plant’s larger operating space and additional cranes at the site will enable the company to go from handling about 50 trucks a day at its two Youngstown plants to more than twice that number, Jeff says.
These big plans are part of Frank Sherman Co.’s goal of keeping ahead of the scrap industry curve and remaining viable in the future. “My grandfather never had a vision of modernization,” says Jeff. “He believed in running a crane or a truck until it died and then using its spare parts for the equipment that would die next. But I believe that with today’s technology, you either get onboard or you get left behind. That’s why we’re in the process of modernizing our new site.”
Though Frank Sherman Co. hasn’t moved yet, it has already established a joint processing venture at the site with another Pennsylvania processor. The venture, named Interstate Processors Ltd., runs a 60/60 American Pulverizer Co. turnings crusher/ shredder on a corner of the Girard lot. “We process all kinds of sheet iron, turnings, clips, and slitter scrap from area industries and steel mills,” Jack notes.
As for what the future holds for Frank Sherman Co., its prospects clearly look promising—and ambitious. For one, the Kleins have their sights set on working toward ISO 9000 quality registration after getting settled at their new site.
The future could also find the company branching out into different scrap markets. But that depends on whether you ask Jack or Jeff. “I see a great opportunity to expand the business with the advent of the new operation and the joint venture,” says Jack. “But as for expanding out of ferrous and nonferrous, I think it would be too much diversification.”
Jeff—the new generation—sees things a little differently, however, and seems eager to push the envelope a little more. “I’d like to expand out of ferrous and nonferrous,” he says. “We tried glass and plastic for a while. It’s another area to explore, definitely.”
Could these materials be a new Frank Sherman Co. tradition in the making?
Only time will tell. •
Frank Sherman Co. takes family values seriously, and that’s why this Ohio scrap processor points proudly to its four generations of family leadership and 100 years in the business.