March/April 1992
How does a scrap company make it to its 100th birthday? This South Carolina firm proves it's through committed leadership, strong customer relations, and concern for employees.
BY KENT KISER
Kent Kiser is associate editor of Scrap Processing and Recycling.
One hundred years and four generations—that's how long Charleston Steel & Metal Co. has been in the scrap business. The company that Samuel Steinberg founded in the last century has grown from a backyard operation to the largest scrap processor in lower South Carolina . The firm—now run by first cousins Samuel and Bernard Steinberg, the founder's grandsons—is a full-service scrap establishment that processes ferrous and nonferrous scrap, sells usables, runs a dismantling operation, and dabbles in residential recyclables.
Charleston Steel has always been a company "on the move" in more ways than one. The firm has literally uprooted twice, once in 1940 and again in 1988. The latter move came after Charleston Steel purchased N. Goldberg Co., a competing firm that had two things the Steinbergs wanted: a 17-acre plant in downtown Charleston, S.C., and 40 percent of the area's scrap market. Buying N. Goldberg gave the firm space to grow and approximately 95 percent of the area's business, says Bernard, the firm's vice president who oversees the downtown plant. Arthur Kurtz, former president of N. Goldberg, now works as Charleston Steel's general manager.
In 1980, Charleston Steel made another business "move" by opening its second plant on a 32-acre tract in Mt. Holly, 22 miles outside of Charleston "in the middle of nowhere," says the company's president, Samuel, who manages the Mt. Holly plant. About 90 percent of the plant's material is industrial ferrous scrap, but it also sells usables and has a nonferrous warehouse.
Last year, the firm made its latest corporate move by purchasing Garfinkel & Co., a 6-acre salvage operation that has become Charleston Steel's usable and salvage division, offering a spectrum of ferrous and nonferrous products. The Steinbergs bought the 75-year-old business primarily for safety reasons: They worried about customers strolling around the downtown processing plant, seeking usables amidst the busy machinery. They wanted a safe, convenient, central place to sell the usables away from the hubbub. "Otherwise, I just knew that sooner or later we were going to get a customer killed," Bernard explains.
These various moves have enabled Charleston Steel to establish a commanding hold on the scrap business in its part of the state. This doesn't mean the company has become complacent. Although the firm's only local processing competitors are small recycling centers, Charleston Steel has responded by opening four recycling "substations"—basically trailers—in the last two years, all in strategic areas around Charleston . The substations accept nonferrous scrap and help the company "reach the public easier," Samuel says. "If you wait for the public to come to you, you might starve to death, so we've tried to get out where the public flows."
A Company of Contrasts
If you ask the Steinbergs to describe Charleston Steel, they use adjectives like honest, vibrant, demanding, and realistic. They also say the company is conservative yet aggressive and ambitious, which points out the contrasting nature of the business and its leaders. Samuel and Bernard could affectionately be called the Odd Couple of Scrap. Samuel drives a Cadillac Sedan de Ville while Bernard drives a 1979 Buick Le Sabre—an old company car. Samuel wears a coat and tie, dress slacks, and leather shoes while Bernard wears a plaid shirt, Dickies work pants, and muddy high-top work boots. Samuel even has a less-pronounced Southern accent than Bernard, who claims to speak "Charlestonese." Yet their partnership works. (Samuel says their relationship is similar to the one between their fathers, who ran the business together through the early 1970s.)
In the beginning, neither Steinberg planned on managing a scrap business. Samuel graduated from the Citadel with an engineering degree and was undecided about joining the family business. "A family business can either be paradise or hell," he remarks. The advantages, he learned, were that you're your own boss and you have a very secure job with a special kind of intimacy and tradition. Over the years, he's discovered even more benefits: "I get a great feeling of satisfaction seeing our equipment running properly, seeing our employees doing a good job and being rewarded to their expectations, and seeing a good profit sheet at the end of the month." Even in today's difficult economy, Samuel says he enjoys the challenge of figuring out how to improve operations to keep the business healthy.
Bernard was likewise no shoe-in as a scrap executive. At one time, he was a self-proclaimed preppie, wearing Gant shirts and Gold Cup socks while earning an engineering degree from Georgia Tech. He entered the business when his father became ill. "At first, I didn't know if I liked it or not," he says, "but now I don't know what else I could do."
Inevitably, Charleston Steel's two processing plants reflect the different characters of Samuel and Bernard. The Mt. Holly plant is spacious, rural, and calm, reflecting Samuel's reserved, laissez-faire nature. He prefers to let his plant manager and 26 employees run the operation. "If there are no problems, it runs under their direction," he says. The bustling downtown plant, on the other hand, is abuzz with noise and activity that matches Bernard's active management style. "I work with my hands every day," he proclaims. The downtown operation, which has 47 employees, handles up to 300 customers a day and processes the bulk of the company's ferrous and nonferrous scrap.
Weathering Tough Times
Charleston Steel has not always enjoyed smooth sailing. While the firm reportedly managed to make money even in the Depression, it almost succumbed during the recession of 1981 to 1983. "There wasn't anything worse for us," Bernard says. "Everything that could go wrong did go wrong. It was Murphy's Law at its fullest." Business fell off 50 percent, two of the firm's largest scrap customers—accounting for 20 percent of its business—closed, interest rates ballooned to 21 percent, and site-preparation costs at the Mt. Holly plant were seven times what was expected. The company was also a steel service center at the time, selling new steel products, and was struggling to keep that operation afloat. (The firm sold the service center in 1984.)
Charleston Steel could easily have gone Chapter 11, but the Steinbergs weathered the storm by cutting their own salaries by a third, reducing employees' pay, and trimming their work force. Looking back, the cousins are obviously proud of their perseverence and the sacrifices everyone made to help the company survive. The experience prompted them to resolve never to get into debt again. "Today, at this minute, this company owes nothing," Bernard says. "We haven't borrowed money for any purchase of anything—any crane, any truck, any forklift—in five years."
The firm is now fanatically conscientious about its financial health, running its accounts payable every Monday and never letting any bills pile up. The reward of such fastidiousness is peace of mind. "I can't tell you what it's worth to go home at night and not have to worry," Bernard says.
The company credits its lack of debt for helping it through the current recession. "Last year wasn't what you'd call a banner year," Bernard says, "but we've held our own like everybody else." Rather than cut employee salaries as they did in 1981, the Steinbergs reduced their work force last year from 110 to approximately 80, cut employee overtime, and improved the firm's equipment maintenance program. The Mt. Holly plant, for example, has a service garage on-site to expedite equipment repairs, and employees inspect the plant's 12-year-old shear three times a day, tightening bolts and making adjustments when necessary.
Taking these cost-saving steps has not always been easy for the Steinbergs, but as Samuel explains, "My father used to tell me, `You never learn until you go through hard times,' and I used to say, `I hope I'm smart enough to avoid them.' But it's impossible, and it's true, you do learn from them."
Secrets of Success
Charleston Steel may be financially conservative, but that hasn't stopped it from being growth-oriented, as its various acquisitions and expansions in the past few years prove. The company is particularly willing to invest in equipment to increase its productivity. For example, after buying N. Goldberg, the firm spent two-and-a-half times the purchase price of the business on new equipment, including the company's first hydraulic cranes, new trucks, and forklifts.
The Steinbergs attribute their success to hard work, common sense, and—especially—service, which has enabled Charleston Steel to maintain long-term relationships with many of its customers and consumers. "Our customer retention, even before we bought out our competitors, was close to 99 percent," Bernard notes. Among the company's long-standing customers are South Carolina Electric & Gas, from which it has purchased scrap since 1904; Exxon, which has sold all of its scrap in the Carolinas to Charleston Steel since 1920; and a number of large Charleston corporations such as General Dynamics, General Electric, Cummins, and the area's many military bases.
"We seriously break our backs to service our customers," Samuel remarks. "We'll do ridiculous things to help them out." The company draws its scrap within a 70-mile radius of its operations, with a few select accounts as far as 140 miles away.
On the consumer side, Charleston Steel sends most of its ferrous scrap to Georgetown Steel Corp. (Georgetown, S.C.), Nucor Corp. (Darlington, S.C.), and ITT Grinnell (Statesboro, S.C.), all within 75 miles. The firm ships four main grades of ferrous—No. 1, No. 2, 3-foot plate, and 2-foot plate—and has one specialty consumer that takes 1-foot plate. Its three grades of cast iron—wash cast, porcelain-free cast, and mixed cast—go to consumers such as U.S. Pipe (Birmingham, Ala.) and Charlotte Pipe (Charlotte, N.C.).
Copper and brass scrap is often sent to Southwire Co. (Carrollton, Ga.), Halstead Metal Products Group (Pine Hole, N.C.), Colonial Metals Co. (Columbia, Pa.), American Brass (Headland, Ala.), and others in the Connecticut Valley. Charleston Steel also sells aluminum to Reynolds Metals Co. (Richmond, Va.), J.W. Metals (Charleston), and Commonwealth Aluminum Corp. (Lewisport, Ky.), among others, with used beverage cans going to Alcoa, Alcan, and Anheuser-Busch. The company, in fact, serves as the recycling representative for Anheuser-Busch Recycling Corp. (St. Louis) in lower South Carolina .
With Charleston being one of the largest ports on the East Coast, and with the Atlantic Ocean occupying 50 percent of Charleston Steel's potential market area, the company is in a perfect position to export. The firm sells ferrous and nonferrous scrap overseas whenever the market is strong, Bernard says.
Taking Care of People
Charleston Steel's sense of service and responsibility isn't just focused externally. The Steinbergs consider their employees to be "a great portion of our assets," and they work closely with them to gauge their satisfaction and improve their performance. At the Mt. Holly plant, for example, the employees are assigned to one of four "departments"—shear crew, nonferrous crew, shop crew, and drivers. Samuel meets regularly with each department for a "little skull session" to talk about safety and production issues. "It's easier to talk at ease in nice surroundings, rather than waiting until something breaks," he says. The purpose of these meetings is to keep the communication lines open between management and employees. "The mistakes people make on a daily basis are often because they're not communicating with each other," Samuel explains. "I spend a fair amount of my time trying to improve my communications with people."
As proof of their commitment to their employees, the Steinbergs recently retained the services of the Berkeley County Alcohol and Drug Rehabilitation Program, which offers employees a chance to receive anonymous counseling on personal problems. "We're giving them a choice," Samuel says. "We're offering to work with them and assist them with their problems, but if they don't attempt to help themselves, then they can't work here. I've got to look out for my people." The Steinbergs must be on the right track—several of their employees have been with the firm 15, 25, even 30 years. "They like the work," Samuel observes. "We try to be fair with them and treat them like human beings."
The company extends its concern for people into the community. Charleston Steel is the largest supporter of the Tri-County Fire Chiefs Association, which includes sponsoring a float in the group's Christmas parade and holding a luncheon for firefighters during Fire Prevention Week. And for seven years, the firm has collected cans from local fire stations and donated the proceeds—approximately $6,000 per year—to the children's burn unit of the Medical University of South Carolina. "That's our favorite charity," Bernard says.
In addition, the firm supports the Citadel by contributing $100 every time the school's football team "recycles" a football by recovering a fumble or intercepting a pass. "Some afternoons it becomes expensive," Samuel muses. Half the money goes to the school's Brigadier Club, while the other half goes to the Medical University 's burn unit. Charleston Steel also sponsors Earth Day activities, offers tours to students, and gives recycling presentations to local schools. "I try to give, whether it's time or money," Samuel says. "It's a good feeling to do that. I've gotten a fair amount out of the community, and I think you have to give something back."
On the national level, the company was a 50-year member of the Institute of Scrap Iron and Steel (ISIS), a predecessor organization of the Institute of Scrap Recycling Industries (ISRI) (Washington, D.C.), and continues to be an ReMA member. Samuel served as an ISIS board member, and Bernard still serves on the board of ReMA's Southern Chapter.
The Next 100
Charleston Steel has no intention of resting as it embarks on its second century. "We're trying to keep our finger on the pulse of what's going on around us and trying to be involved," Samuel says. Bernard asserts that "the 1990s offer unparalleled opportunities, moreso than the 1980s." They predict that Charleston will continue to grow, and they'll grow with it. They also see opportunities in the Third World and former Eastern Bloc countries, which are "in dire need of our supplies and services," Bernard says, adding, "Where opportunity arises, we'll be there."
Household recyclables could also be a part of Charleston Steel's future. The firm currently accepts glass and plastic containers from one county and one town, but only on a no-payment basis because it has found the materials to be unprofitable. "We've tried to be all things to all people," Bernard asserts, "but it hasn't worked. I think there's a future in plastic recycling somewhere down the road. I just don't think it's here yet."
Looking ahead, the Steinbergs are concerned about the potential effects of new environmental regulations—"It's frightening to think what the future holds," Samuel says—and they have discussed scrap recycling issues with their state representatives. "The key is educating them about our needs," Bernard says. The key to future business survival, he says, will be "to anticipate more regarding pollution control, technology, management, and communication."
For now, the company plans to enjoy its 100th birthday. In April, it will host a celebratory brunch at the Southern Chapter's meeting in Charleston , as well as release a booklet on the company's history and advertise in the local media. "We want more people to realize that we're a part of the community and we've been here for a long time," Samuel notes. Reflecting on reaching the milestone, he says, "It's a good feeling to know that you've been able to survive the long cold winters and the hot summers."
Despite Charleston Steel's obvious and long-term success, the Steinbergs maintain a decidedly unpretentious attitude. "We're not General Motors here," Bernard says. "But it's not how big you are, it's what's left over when you're finished." And no matter what the future brings—"We're always going to have our ups and downs," Bernard observes—Charleston Steel plans to make it to its bicentennial. "I know we'll be here," Samuel asserts, "and we'll be a definite influence on the market." •
How does a scrap company make it to its 100th birthday? This South Carolina firm proves it's through committed leadership, strong customer relations, and concern for employees.