May/June 2012
The Leibov family is beginning a new chapter in its four-generation scrap story by bringing Metropolitan Steel and Lorbec Metals together under one name, MetroBec, and one vision.
By Diana Mota
Richard Leibov enjoys challenging the status quo. “I’m always looking for better and more efficient ways to do business,” he says. “I’m not always looking inside the box.”
That might mean purchasing a new piece of equipment, developing a new process, or investing in employees. Most notably, that way of thinking has led to the merger of two companies the Leibov family has owned and operated separately for 35 years—Metropolitan Steel and Lorbec Metals—into a single company, MetroBec, which will begin operating in the Montréal suburb of Saint-Hubert in June.
For many family-run businesses, separate companies mean that at some point along the way, certain family members wanted to blaze their own paths. That isn’t the case here, however, the Leibovs say. The two companies have always been across the street from one another. Richard, now president of MetroBec, was president of Lorbec, which processes nonferrous metals, and operations manager of Metropolitan Steel, which processes ferrous. Richard’s father, Mark Leibov, was secretary and treasurer of Metropolitan Steel and vice president of Lorbec; his uncle, Larry Leibov, was president of Metropolitan and secretary and treasurer of Lorbec. (Larry, who was ill when interviewed for this story in March, died April 11.) The family launched Lorbec with an outside minority partner in 1977, Richard says, and with that partner no longer part of the business, “it just didn’t make sense to run [the two] independently.” Merging will increase efficiency, reduce redundancy, and build a single strong, growing, customer-focused company, he says.
Deep Scrap Roots
Richard Leibov is a fourth-generation recycler. Larry Leibov remembers spending his evenings as a young boy sorting metal in his paternal grandparents’ basement in Montréal. “It instilled [in me] a liking of handling metal,” he says. That grandfather and the brothers’ maternal grandfather, who lived in Ottawa, were horse-and-buggy peddlers who bought and sold a wide variety of scrap to provide for their families. The Leibovs trace MetroBec’s origins to the company Larry and Mark’s father, Hy Leibov, founded in 1957, H. Leibov Scrap Iron & Metals. The company collected metals and textiles, which their father processed by hand out of a 4,000-square-foot building on Marquette Street in Montréal. “It was very primitive, but it served as the seed” of today’s company, Larry Leibov says.
When Hy Leibov died in 1964, Larry was 24 and working for another recycler. He used the experience he had garnered there to take the reins of his father’s business and provide for his mother and five younger siblings. He was not alone for long, however. His brother Bernie joined him two weeks later, at age 20. Larry recalls the exact moment Bernie joined the business: He and another worker were struggling to put a manhole cover on a scale, he says, when his brother appeared. “Bernie dropped his [school] books on the sidewalk to help us, and he never touched them again.” When their two younger brothers, Mark and Howie, each reached age 16, they joined their older brothers in the business. Their mother, Sara, ran the scale and later kept the books until she had a stroke in 1996. Together, “we were invincible,” Larry says.
As the company grew and acquired more equipment and employees, it also required more space. “We moved about four times” in Montréal, always keeping the original location as a feeder yard, Mark says. In 1969, the company changed its name to Metropolitan Steel (in French, Acier Metropolitan) and settled in its current location outside the city limits on 10 acres of farmland.
The brothers built a 5,000-square-foot building that housed a small office they shared, a lunchroom, a bathroom, and a scale room. The close quarters made it an adventure, Larry says. “We did a lot of scrapping and yelling, and then we went to lunch,” he laughs. “It was so much fun.” Friends from outside the industry often would join them early in the morning to enjoy the banter before they went to work. There weren’t any ground rules, Larry says. “We didn’t squabble about who did what. Titles meant nothing.” At one time or another, “we were all crane operators, truck drivers, torch men, [and] bulldozer drivers,” Mark says. “We did whatever we had to.”
Bernie Leibov left the company in 1977 and moved to Florida to start a scrap business there. Though the timing was not related to Bernie’s departure, 1977 was also the year Mark, Larry, and Howie decided to start Lorbec Metals with an outside partner. Howie died in 1993, at age 41, from Hodgkin’s lymphoma, which had been diagnosed when he was 18. “He was the best and brightest,” Larry says. “He had such good instincts” about people. “In 10 minutes, he knew if he would ever talk to you again.”
Metropolitan Steel continued to grow and acquire neighboring buildings and land until it reached its current size, about 20 acres. The company had to give up the original Marquette Street location in 1990, when the city government claimed the land to redevelop the neighborhood, but MetroBec has two other feeder yards in the Montréal area that employ 25 workers who sort and shred metal for transporting directly to customers or to MetroBec for further processing.
Metropolitan Steel and Lorbec Metals were Richard Leibov’s playground starting around age 8, he says. While other boys his age were playing with toy trucks and loaders, he hung around the real things. “It was fun,” he says. “I think any kid would have a blast here.” His father began teaching him to use some of the equipment when he was 10, and by age 13, he was operating it on his own. He and his older brother, David, worked various jobs at the two companies when they were not in school. While Richard’s love for the scrap business grew, David chose to take another path and became an engineer for Boeing.
After Richard completed a college business program in 2001, he began working for Metropolitan Steel full time as foreman, but he left three years later to become an inventory control manager at a business supply company. He had some “issues” working in the shadow of his father and uncle, he says, and he questioned what kind of future he might have in the family businesses. “I was young. I wanted everything now. I always had the dream of returning and running the company one day.” That day came when his father called and said he and Larry needed him. “I needed them, too,” Richard says. He never looked back. He began spending less time in the yard and more time in the office, learning from Mark and Larry how to run the business.
Improving Efficiency
MetroBec processes ferrous and nonferrous materials into commodity-grade metals. The company has a nonferrous shredder, four hydraulic balers, alligator and mobile shears, and other equipment for processing scrap for delivery to foundries and mills within Canada and abroad. About half of the material it purchases comes from industrial accounts; the other half comes from over-the-scale traffic. The company has a fleet of 10 vehicles and drivers that picks up and delivers materials primarily within one day’s drive. It uses transportation companies for moving scrap across longer distances as well as for further customer support.
The company had been cautious about investing in new equipment over the years, Richard says. It started with a couple of forklifts and a used crane, he recalls, and his father and uncles would pick up older, used equipment that often broke down and needed repairs. He’s a firm believer in technology’s benefits, however. “I’m a tech guy,” he says. “I think there’s a place for it here,” such as for testing and sorting materials. With X-ray fluorescence equipment, “you really know what you have today” when you purchase materials, he says.
Still, when Richard approached Mark and Larry in 2005 about spending $300,000 on a new Sennebogen crane, he met resistance. “They thought I was nuts for a long time,” he says. Larry concurs. “I didn’t think spending that kind of money was a good idea.” At the time, “our costs were lower … but our volume was lower, too,” he acknowledges. That first hydraulic crane was a hard sell—but the next five were not, Richard says, once the older generation saw how much time and money the company saved. “There were fewer mechanical problems and breakdowns,” he says. “Trucks were loaded quicker and more efficiently.” Richard also convinced Mark and Larry to switch to trucks with automatic transmissions. Manual transmissions might use less fuel, but they’re more difficult to drive, he says. “The drivers are the face of our business. I was more interested in happy drivers.” The drivers were resistant at first, he says. “Now they say they wouldn’t drive anything else.”
Richard is particularly proud of finding a wheel loader that met the company’s needs. He didn’t need a big loader, he explains, but with most small loaders, the operator has to drive up a ramp to load a truck, which means everything revolves around the location of the ramp. After much research, he discovered the Sennebogen 305 multihandler, which has a telescoping boom that gives it a long and high reach. It can load a truck without a ramp, he says. At the time, he had to go to Europe to purchase it, he adds, but now the company sells them in North America.
MetroBec’s latest equipment purchase is a 240-hp ATM-Recyclingsystems baler. The company is installing it in a pit, which allows workers to load it with a variety of equipment and eliminates the need for a conveyor, Richard says.
Success Across Generations
The secret to their success, the Leibovs say, is that they give each other room—even to make mistakes—and they trust each other. Richard recalls an instance when he first began working full time for Metropolitan Steel and he purchased “amazing” paint for the company’s roll-off containers. When the paint arrived, the $1,000 purchase was no more than a 5-gallon bucket. Though he beat himself up over the incident, Mark and Larry told him to forget about it and move on. “They didn’t hound me [about] it,” Richard says. Over time, Richard has “proven himself,” Mark says. “We’ve all grown and learned from each other,” Larry adds. In part, this strong relationship has come from “me becoming more mature and learning,” Richard says—and also from “me becoming more mature and learning,” his father, Mark, adds with a laugh.
The Leibovs say they’re content with the company’s rate of growth. “It’s a healthy, steady growth,” Richard says, which they attribute to their continued reinvestment in the business through new equipment and technology, training, and being able to accommodate a greater volume of material.
Their success also comes from hard work, perseverance, and a good reputation, the trio says, and they emphasize the latter. “We have never reneged on a deal,” Larry says. Some customers have been with the company for more than 35 years, Richard adds. “We’ve had customers leave for a better price,” Larry says, but when their service suffered, they would come back. “They realized they were getting a fair deal.” Mark says he tries to emulate ethicist Michael Josephson, who has spoken at several ReMA conferences. “I enjoy the way he treats people, and I try and give that back to other people,” he says.
They credit the people and teams that work for them for their success and good reputation as well. “We’ve grown from being good people—[from] being a good business,” Larry says. From 17 employees when the company first moved to Saint Hubert, the company now has about 120 employees, including several father-and-son teams and employees with 15 to 20 years of service. They build loyalty by investing in their staff, using consultants to develop the skills of their work force, especially the sales team, Richard says. By empowering employees to make decisions, “they work harder and care more,” he explains. For example, when the company is ready to purchase a new piece of equipment, the Leibovs say they call together the workers who’ll use it and let them make the final decision. Each month, the company tries to plan a special event or outing for its employees, sometimes with their families. “In the early years, we did it on a smaller scale,” such as by having a barbecue in the yard, Larry says. More recent outings have included playing an ice hockey game at a local rink, paintball, and a family trip to an area zoo.
As the company has grown, it has added to its administrative staff, allowing each of the Leibovs to wear fewer hats. Larry’s daughter Jenny serves as the company’s receptionist, and the company hired a human resources manager six years ago. Before that, “all the employees would go straight to Mark and Larry” for HR issues, Richard says. “This helps free up time for other things. … We have time to look at the bigger picture.”
Challenges and Change
The company has faced a few challenges over the years. The most notable, perhaps, was an ice storm that hit the region in 1998. About 80 hours of freezing rain deposited nearly four inches of ice on Montréal, and the damage extended across hundreds of thousands of miles into other provinces and U.S. states. In Québec, an estimated 24,000 electrical poles, 4,000 transformers, and 1,000 steel pylons belonging to provincial electric company Hydro-Québec (Montréal) experienced damage, and that company called on Metropolitan Steel to clean up 38 kilometers’ worth of downed transmission lines and towers. “We got the first call to do the cleanup,” Larry says. At times, they weren’t sure if they could meet the challenge, given the extreme weather conditions, Mark recalls. Working nearly around the clock “with our employees as one team, we completed the job in approximately
13 days,” he says.
Through the years, getting people to realize they get what they pay for is another challenge, Richard says. “You try to give a fair price, where you can make a living and it’s fair [to the customers]. Once they know us, they believe us. They understand the honesty and quality of service involved—what they’re paying for.” Further, the Leibovs would like to change how people view the scrap recycling industry. “Getting people to understand how important it is” for the environment is one of the industry’s greatest challenges, Mark says. They plan to raise the newly merged company’s profile by marketing and branding themselves—and not just to potential buyers and sellers. They plan to interact more with their local community by holding collection events as fundraisers for local charities, by visiting schools to talk about recycling, and by opening their doors for tours. Richard also tries to have an active presence in the local business community—something he learned from Mark and Larry, he says. Scrap is “not just a money game. It’s about relationships,” he says.
In the long term, Richard envisions turning MetroBec into a full-service recycling center that accepts all types of recyclables, including plastics, paper, and electronics. But for the most part, the Leibovs don’t worry about the future. “We are in a business that will always be here,” Richard says. “We’re always going to be recycling something. We change as it changes. … We do more nonferrous today because more nonferrous is used today. If more aluminum is being used, we recycle more aluminum. We follow the trend.” Keeping on top of markets and technology, “it’s really what the future is,” he adds. “We’re always looking to improve or be different. That’s why we’ve grown. That’s why we’re successful.”
The Leibovs define success as being able to go to work and not look over their shoulders because they took advantage of someone, having a smooth-running business, and treating people as they themselves would like to be treated. Larry says he has no regrets about taking over the family business after his father’s death. “I wouldn’t have chosen any other path. I love what we do.”
Diana Mota is associate editor of Scrap.
The Leibov family is beginning a new chapter in its four-generation scrap story by bringing Metropolitan Steel and Lorbec Metals together under one name, MetroBec, and one vision.