May/June 1989
"The strength and energy of ReMA have begun to make an impact on the recycling industry in particular and the national business community as a whole."
--David Serls, first vice president of the Institute of Scrap Recycling Industries
"It has come to be a fact that when ReMA speaks on an issue, people listen."
--James A. Fisher, secretary
"As we are called to testify and to represent our industry to the public, to the regulators and to the press, we have the financial capability to do so."
--D. Cap Grossman, treasurer
"Recycling has become a popular word, a rallying cry for politicians and environmental groups. But ReMA will continue to underscore the fact that while others talk about recycling, our industry has been doing it for more than a century."
--Richard E. Abrams, president
"It's part of ReMA's plan to make us all stronger and smarter and a lot better off for the future."
--Arnold Gachman, second vice president
President’s Breakfast
State of the Association Reported, “From Dialogue to Decision” Introduced
At the largest national convention of not just the Institute of Scrap Recycling Industries but also its predecessor organizations, more than 2,700 ReMA members and guests spent four days and nights finding out the latest on issues challenging the recycling industry, working together to formulate solutions, learning new practices for improving business, and enjoying the convention setting, Los Angeles. Following are highlights of the March 15-18 event.
In a succession of positive, motivating addresses, ReMA's national officers and executive director at the President's Breakfast reported on the state of the association.
Convention Chairman Tom Salome, M. Lipsitz and Co., Inc., Waco, Texas, opened the meeting of 1, 1 00 attendees by acknowledging in the crowd the past presidents of ISRI, ISIS, and NARI as well as the leaders of recycling associations around the world. He then began the introductions of "men who are ready to look forward as well as to review our last year."
Acknowledging the governmental issues ReMA has contended with over the past 12 months, Executive Director Herschel Cutler emphasized the need for good public relations. He said, "We have committed major resources to expanding and making far more effective the federal and state legislative regulatory programs provided by your association. … Because of your support, we can continue to promote and protect this industry."
ISRI Secretary James A. Fisher, Fisher Steel & Supply Co., Muskegon, Michigan, reported a membership count of 1,792. He urged members to help increase that number, saying, "Recruitment can be as simple as informing your chapter membership chairman of any nonaffiliated firms that you know exist. With those leads, we can easily inform companies of the benefits and opportunities ahead of them if they join their voices with the 1,792 of us who already present a strong, unified voice on industry issues."
The financial position of ReMA was presented by association treasurer, D. Cap Grossman, Grossman Iron & Steel Co., St. Louis. "We can certainly expect some serious challenges to our industry that will require major financial commitments," he said; "fortunately, ReMA is poised to meet these challenges from a position of strength." Grossman reported that in 1988 the association operated at a surplus and that its reserves continue to grow, then forecast "a 1989 with the same--if not better--good--if not great--financial news."
Arnold Gachman, Gachman Metals Co., Fort Worth, Texas, highlighted ReMA's program services. The second vice president extolled the education and training program, saying that seminar attendees develop not only a practical understanding of operations but a better appreciation of the industry. Gachman also pointed out the success of the ISRI-sponsored CNA insurance program. Noting the $50 million-plus premium totals from strong member participation, he said, "The insurance program continues to offer first-rate protection with a solid safety education base."
"The strength and energy of ReMA have begun to make an impact on the recycling industry in particular and the national business community as a whole," said ReMA First Vice President David Serls, Colonial Metals Co., Columbia, Pennsylvania, in his address. "We are a source of information as well as a force to contend with." Serls credited ReMA publications with heightening the association's visibility and positioning members as experts in recycling. Tracing the association's expansion into publishing, he said, "As ReMA has grown, so has our ability to communicate what this industry is all about. I'm pleased to report that our delivery of information ... is strong and accurate and continues to project a positive image for all ReMA members."
Following the report on ReMA publications was an award presentation by Serls and ReMA President Richard E. Abrams, B. Abrams & Sons Inc., Harrisburg, Pennsylvania, to ReMA consultant Si Wakesberg. Recognized by the officers as a pioneer in the recycling business, Wakesberg's writing credits include the founding 30 years ago of NARI's "Green Sheet," now continued as ReMA's "Commodities" newsletter, plus regular contributions to the association's magazine, Scrap Processing and Recycling. "Si is one of the treasures of this industry and our association," Abrams said, "a man whose opinions are sought out, whose insights are respected, and whose leadership has meant a great deal." Serls presented Wakesberg with a brass lamp and a brass plaque inscribed: "With sincere appreciation for his dedicated service and for his singular contribution of knowledge, which have immeasurably benefited the industry."
In reviewing the 1988 activities of the association, President Abrams described "the ReMA marriage" of former ISIS and NARI members as "one that truly works." He said, "We have had our problems--the disappointments and disagreements that need to be talked through and resolved, the frustrations in trying to include our entire membership in the mainstream of our programs and goals. But when we stop and consider where we came from as two separate groups--how we've gotten to this point through volunteer effort and personal dedication--then I believe that we can all see how we will be able to withstand the challenges that will confront us in the future."
Abrams acknowledged the "longest continuous period of good business in recent memory ... there are many reasons for the optimism that we feel." But, he said, members of the industry "cannot afford to be intoxicated with current levels of success and fail to look forward, to anticipate some serious and dramatic issues that face us and will continue to be with us for the forseeable future."
The president discussed the current environmental issues, which have created for private recyclers a poor public image. He then introduced a program designed to formulate the message ReMA members want the public to hear. "From Dialogue to Decision," Abrams announced, will send national officers, board members, and key staff members to the chapters to "bring the important issues confronting us to your attention; to listen to your thoughts, concerns, dreams, and desires; then to draw all the information, all the conversation, together in a common, unified message that we can send to our various publics."
Abrams ended his presentation with a recently produced videotape promoting ISRI. The 60-second advertisement, copies of which Abrams encouraged members to buy and pay to run on their local television stations (it ran on the "CBS Morning News" in Los Angeles the following morning), is "a positive statement about you and me, about our dedication and love for our country--its people, its resources, and its future," he said. "While around us we hear a jumble of voices talking about recycling for America, we in the industry are doing something about it."
Keynote Breakfast
Ronald Reagan Addresses Recycling Industry Issues
Former President Ronald Reagan, telling ReMA members, "You represent the backbone of American industry," discussed issues being faced by the recycling industry during a Keynote Breakfast presentation at the national convention.
ISRI President Richard E. Abrams introduced Reagan, crediting him with responsibility for "the longest peacetime economic expansion in our history" and with making the American people "believe in themselves again."
Revealing that "one of the greatest things about being an ex-president is that I can now say what I want," Reagan delivered prepared comments, then took questions from the floor.
During his dialogue period, Reagan indicated that he recognizes the inequity of burdening the recycling industry with the sole responsibility for safe disposition of manufactured goods containing hazardous materials. Such responsibilities should be borne by all parties involved in the chain of manufacture, use, and eventual disposal of such goods, he suggested. Asked his view on the role of manufacturers in providing safely recyclable products, Reagan said that "basically, yes, it should be the responsibility of the manufacturer." There may be "some areas," he continued, where government assistance might be required to solve the problem.
The former president also indicated support for industry plans to seek changes in Superfund, especially in the area of financial liability for site cleanups, by introducing fairness concepts. Asked to comment on a pragmatic approach to Congress to gain changes in Superfund, Reagan noted that the scrap processing and recycling industry is "one that is helping relieve the problem" of waste reduction, and said, "This should be pointed out to Congress." He indicated that he favored action by Congress to make appropriate changes in Superfund "to correct any unfairness and inequity."
Regulations Update
EPA’s Halper and Keehner Address ReMA Members
Officials from the Environmental Protection Agency's Office of Pesticides and Toxic Substances Denise Keehner, chief of the chemical regulation branch, and Martin P Halper, director of the exposure evaluation division, gave ReMA members an update on the agency's efforts to resolve the "white goods" (obsolete small appliances) problem.
Although EPA’s view of the history of the controversy differs from ReMA's, the government representatives were eager to point out that ReMA and EPA have "turned the corner" in their working relationship, with the agency having a better understanding of and respect for the industry position. Keehner focused on the need for mutual trust and good faith dealings as a vital ingredient in developing a solution.
Another essential component, they said, is quality data. To augment its knowledge concerning the use of small capacitors containing polychlorinated biphenyls (PCBs), EPA obtained information from appliance manufacturers and electrical engineers. It is this information that led EPA to characterize ReMA's recommendations concerning "white goods" processing as reaching far more broadly than was necessary. However, at this same meeting, EPA also said PCBs are in a wide range of pre-1979 products.
A major amount of EPA effort, according to Keehner and Halper, has focused on developing an appropriate sampling and testing methodology for analyzing the possible concentration of PCBs in shredder residue. Results from testing done by the states was so inconsistent that EPA decided to initiate its own studies. With ReMA assistance, a team of field investigators collected fluff and soil samples from seven sites. These samples will be analyzed in the near future using the new testing methodology.
The speakers said EPA intends to use the assembled data as the basis for a proposed regulation. If the agency proceeds under the authority of the Toxic Substances and Control Act (TSCA), it will, they said, be able to balance the risks posed by metal recycling operations and sanitary landfilling of fluff against the benefits of recycling and the costs of regulatory controls to alleviate environmental risks.
If EPA concludes the shredding risks are not unreasonable, the officials noted, it could amend its regulations to allow the shredding of materials lawfully containing PCBs and can exempt fluff from the 50-parts-per-million (ppm) TSCA disposal requirements. If, however, EPA finds the shredding risks to be unreasonable, it might adopt cost-effective regulatory controls such as processing restrictions, storage requirements, and treatment technologies to protect against those risks. If the agency decides to proceed under TSCA, it is 30 months away from a rulemaking. However, Keehner and Halper cautioned, if the investigation addresses an issue like lead concentrations that are regulated under another statute, the Resource Conservation and Recovery Act, both the timetable and the legal criteria are less favorable.
During the period of investigation, the regulatory branch hopes the threat of federal enforcement against industry firms can be minimized. In a very strict interpretation of the PCB ban rule, EPA views the processing of "white goods" (or other materials that may be PCB sources) and sale of the resulting prepared recyclables as potentially involving up to four potential violations of existing law.
Under EPA’s interpretation, one violation is the disposal of PCB wastes over 50 ppm anywhere except at an approved PCB landfill. The second violation is processing PCBS, including PCBs found in a plastic matrix. (According to the EPA officials, PCB was used extensively as a plasticizer.) The third violation is treatment: the regulation does not allow the dilution of PCBs to lower the concentration by facilities lacking treatment permits. The last violation is distribution in commerce. If metal shipped as prepared scrap is itself contaminated with PCBs, the technical requirements of prohibited distribution have been met, contends EPA.
Keehner and Halper indicated that the first three potential violations could be dealt with in the planned rulemaking, while the last can be handled less formally in an agency policy statement.
The officials said EPA will continue to coordinate its efforts with state actions concerning alleged instances of PCB-contaminated fluff. The federal environmental authorities already have conducted one informational meeting for state officials. They will soon make available to the states a newly developed sampling and testing methodology.
Nickel and Stainless
Continued High Prices Can Lead to Substitution
While the outlook for both nickel and stainless in 1989 shows continued good demand, speakers at the Spotlight on Nickel and Stainless cautioned that higher prices might result in substitutions for both commodities. It was demand for stainless steel (the biggest user of nickel at 56 percent of total consumption) that gave impetus to the nickel market's uptrend in 1988 and early 1989, Johannes P Schade, president of the Nickel Development Institute,
Toronto, Ontario, told a packed meeting. Experts predict, he said, that stainless steel will grow at a rate of 2-1/2 to 3-1/2 percent until the year 2000. "As a consequence, the demand for nickel will increase some 30-50 percent," he said. But he cautioned that more nickel production will be coming into the market in the near future and that this could result in a market correction for nickel. He added: "There are also indications that the heat is coming off the stainless steel business."
In 1988, Schade declared, world nickel became scarce; this "shortage syndrome" still exists. Will high prices bring on substitutions? Schade believes "there will be no notable substitution at nickel prices below $5.00 a pound." Above that price, however, substitutions in price-sensitive markets may be triggered, he declared. He observed that stainless steel has been an "underpriced commodity for more than a decade," while aluminum and plastics were being priced at higher levels. He said that currently stainless is "reasonably priced" and added that stainless steel "has not yet reached its growth potential." The possibility of "scrap shortages" in the 1990s cannot be overlooked in assessing the nickel and stainless markets, Schade cautioned.
Why is the stainless steel market experiencing such a phenomenal demand? Robert A. Hageman, senior vice president, Kidder, Peabody & Co., Inc., New York City, gave two reasons: the timely and positive adjustment that occurred in the second half of 1988 at the distributor and service-center level, and the continuation of economic activity. Hageman said that though orders are building and lead times have picked up, "there do not yet appear to be ... huge accumulations such as occurred last year." He said 1989 is expected to be "the second-best year ever in shipments and apparent consumption."
In 1988, Hageman noted, shipments of stainless steel soared to another record, jumping to 1.6 million short tons (mst), or 12.1 percent above the previous record of 1.4 mst set in 1987. Production approximated 2.0 mst, against 1.8 mst the previous year. Imports jumped to 314,000 short tons and exports remained at 84,000 short tons. Hageman pointed out that "imports as a percentage of apparent consumption have dropped steadily, from 20.4 percent in 1986, to 18.3 percent in 1987, to 17.3 percent in 1988."
Will substitutions affect the stainless industry? The use of stainless steels, Hageman cautioned, is not insensitive to price changes: "The higher the price is relative to its competition, the more questionable its prospects for growth and penetration into existing and future markets." In fact, he said, there is already evidence of a small shift and producers must carefully watch price changes if they want to continue the strong gains and inroads they have made in the past six years.
When buying stainless steel scrap at the processor level, the formula is to "know your markets," said Saul Gordon, L. Gordon Iron & Metal Co., Statesville, North Carolina. He said "prices we are seeing are fantasy prices ... most of us would like to see stable markets." Gordon described stainless scrap handling, the equipment used, how it is purchased, safety aspects, and shipping.
Arnold I. Plant, Samuel G. Keywell Co., Plant Div., Baltimore, and chairman of the ReMA Stainless and Alloys Committee, introduced the speakers and presided at the meeting.
Scrap Metals Workshop: Wire Chopping
Sorting Plus Preparation Equals Higher Profits
Jointly presented by Daniel C. Gascoyne, Jr., Frank H. Nott, Inc., Richmond, Virginia, and Michael J. Casey, Metal Processors, Inc., Jackson, Mississippi, the wire chopping workshop focused on preparing copper and aluminum insulated wire. Gascoyne, chairman of ReMA's Wire Chopping Committee, discussed copper and Casey handled aluminum.
Through slides and actual samples, both speakers examined the various types of wire likely to be encountered by scrap processors and explained why careful segregation is key. In addition to identifying the unique kinds of wire and cable that wire choppers process, the speakers discussed packaging requirements and lot sizes. Gascoyne reminded scrap suppliers to send samples for an estimate of yields on insulated wire.
Scrap Metals Workshop: UBCs
Building UBC Quality … Together
Jointly sponsored by 16 companies, the used beverage cans (UBC) workshop featured a multimedia presentation on can recycling in the U.S.
David R. Smith, Continental Resource Recovery, Oak Brook, Illinois, and Linda Peotter, Golden Aluminum, Lakewood, Colorado, opened the workshop with a video on how aluminum UBC is melted down to make new ingot for can sheet. Both speakers emphasized scrap quality-essential in the manufacture of new cans. Smith traced the growth of the aluminum can and the amounts being recycled each year.
Edward A. Pchola, Alcan Aluminum Corp., Cleveland, Ohio, and Paul Strickland, Reynolds Metals Company, Richmond, Virginia, elaborated on UBC scrap quality by pointing out specific negative effects of contamination. The primary offenders include moisture, non-UBC metallics and heavy metals, combustibles, and dirt. They offered suggestions to processors on coping with contaminants. A display of metallic contaminants was set up to illustrate their points.
George Cobb, Alcoa, Pittsburgh, Pennsylvania, and Cliff Klotz, American National Can, Chicago, discussed the programs now in place to promote nationwide UBC recycling. Klotz reminded attendees that if recycling rates are to increase in the future, there must be a change in the behavior of those not recycling today. Several new programs were highlighted that will benefit everyone in the UBC recycling chain.
Aluminum
Maintaining Strength in World Market
A world market with extremely low producer inventories, with output levels stretched to the limit, vulnerable to unexpected shocks, and with little new capacity coming onstream before 1992 was the global aluminum picture envisioned by Ian Rugeroni, president of Alcan Ingot and Recycling, Montreal, Canada, at the Spotlight on Aluminum. A jam-packed room attested to the interest in the aluminum market's movements.
Rugeroni said 1988 was a record year for Alcan and indicated that the market's strength could be attributed to the longevity of the business cycle on the demand side and the cautious addition of smelter capacity on the supply side. In 1988, he noted, aluminum consumption achieved a 5-percent growth, only slightly less than in 1987. He emphasized the global nature of aluminum demand. In 1988, he said, "producers finally emptied their inventories and shipments were limited to new production." He indicated that "if we had additional inventory to draw down or more metal produced, we would have shipped it--and, of course, we might not have seen the midyear price spike that occurred on the LME."
Recent producer inventories are very low, Rugeroni pointed out, and production is stretched to the limit. He noted that "price is a great stimulator of market response and production was pushed to 100 percent of capacity by the end of 1988."
The aluminum market is vulnerable to sudden shocks, such as power breakdowns, droughts, and labor disruptions, the Alcan executive said. On the other hand, he indicated, "producer shipments will be limited to the growth in new capacity as long as demand holds up." There isn't much new capacity coming onstream before 1992, he stated. One of Rugeroni's charts showed a 2.7-percent change in capacity in 1988 but only a 1.2-percent change in 1989, a 1.3-percent change in 1990, and a 1.8-percent change in 1991.
Data on world end-uses of aluminum in 1988 showed that transportation, at 7.8-percent growth, was the best sector, followed by can sheet at 6.4 percent. Construction showed only a 1.6-percent growth figure.
Rugeroni indicated that aluminum growth will continue but at a slower pace than last year. "These kinds of conditions will keep the aluminum market fully stretched," he said.
Turning to recycling, he declared that it was Alcan's desire to increase its metal supply, "to add metal units by developing further our recycling activities, rather than building new smelters." Rugeroni graphically pointed out that a world-scale alumina refinery and primary smelter today would cost a billion dollars each, plus generating-system and other costs. "All this comes to roughly $12,000 per annual ton, or $6.00 a pound, of new smelting capacity. … Recycling," he emphasized, "is the right thing to do."
Stanton A. Moss, Stanton A. Moss, Inc., Bryn Mawr, Pennsylvania, and chairman of the Nonferrous Metals Committee, introduced Rugeroni and chaired the meeting.
Precious Metals
Potential Recovery Problems
Four representatives from the secondary refining sector analyzed precious metals in a program designed to initiate dialogue on the problems most often faced by sellers and buyers of precious metal scrap. More importantly, the workshop explored how the small, multimaterial processor can find a niche in today's precious metals business.
M. El Guindy, Gemini Industries, Santa Ana, California, and Craig Baron, Walmax Processing, Tottenham, England, discussed the recovery of precious metals from discarded computers, electronic circuit boards, and spent petroleum catalysts. Both Baron and El Guindy emphasized careful scrap segregation and sampling in order to maximize the return to processors. They also discussed several environmental problems associated with handling mercury-containing relay switches, lead oxides from cathode ray tubes, and capacitors containing polychlorinated biphenyls. In addition, panel members covered special financial considerations associated with accumulating and consuming these types of scrap.
Griff Martin, Martin Metals Inc., Los Angeles, opened the session with ReMA's slide presentation on recycling precious-metal-containing scrap. Ronald Rosenson, Behr Precious Metals, Inc., Rockford, Illinois, moderated the session.
Zinc and Lead
Secondary Lead Use and Zinc Consumption Growing
A new, higher price plateau for lead could be established in the future, according to Edward M. Yates, Cominco Ltd., Toronto, Ontario, speaking at the ReMA Spotlight on Zinc and Lead.
He predicted that battery lead consumption will continue to be the only significant growth area for lead, moving from 78 percent of total U.S. consumption in 1988 to 85 percent in 1995.
Yates added, "While having all our eggs in one basket is risky, the good news is that there is no substitute on the horizon for the lead-acid battery." He said secondary lead consumption accounted for about 56 percent of total consumption in 1988 and forecast its share rising to some 65 percent in 1995. "All the growth is in secondary, and primary lead consumption remains essentially flat," he said.
The lead recycling rate has increased significantly in the last two years as a result of higher lead prices, Yates said. However, he added, since lead is a cyclical business, incentives and/or regulations are needed to maintain a high recycle rate. He believes these will be forthcoming and cited recent steps along these lines in some Scandinavian countries.
Zinc metal consumption has grown steadily during the past five years, according to Edward J. Schmidt, Big River Zinc, Sauget, Illinois, who projects that "1989 will continue to be a strong economic year" and that zinc usage will increase by 3 percent over 1988. He believes zinc's growth rate will slow slightly from 1990 to 1992.
Japan, the U.S., and Europe have been the driving forces behind the increased use of zinc. In the U.S. and Japan, the automobile industry and government-funded construction projects have been the major consumers.
He said Big River Zinc projects that, even with the increases in world production that have been announced or rumored in the trade, zinc production will lag behind consumption. This projection assumes that zinc will be able to hold its own against substitution by other materials.
Yates said the U.S. will need more than 900,000 tons of zinc from foreign sources during 1989, and he called on secondary producers to improve their recoveries and become major industry suppliers.
The session was moderated by Lee Raymond, Roth Bros. Smelting Corp., East Syracuse, New York, and chairman of the ReMA Metals Committee Subcommittee on Lead and Zinc.
Copper
Strong Market for 1989; Softer Demand Afterward
Copper demand and prices will remain strong for the rest of 1989, said F. Steven Mooney, president of Cyprus Copper Co., Englewood, Colorado, to a large audience at the Spotlight on Copper. After 1989, however, as the current strong economy begins to weaken, the scenario will change. Increasing levels of supply and softening demand "will create a physical surplus and copper prices will drop rather sharply," predicts Mooney. He said prices would not recover "until demand growth again catches up with supply-perhaps two years." But he cautioned that these price scenarios include assumptions that may or may not prove true.
Looking at supply, the Cyprus executive noted that U.S. production increased almost 15 percent in 1988; however, Chilean producer Codelco did not meet its projections for last year, the Peruvian situation is unpredictable, and Africa is having problems. "It will be a problem for the worldwide industry to maintain the present level of production if only a few things go wrong," said Mooney, adding that last year's experience shows that "there are lots of things 'that can go wrong."
As for demand, he said forecasters believe the strong growth rate of the last few years will flatten as the economic growth slows. Much of the present growth comes from the developing countries, he indicated; China alone could cause dramatic growth in consumption.
Mooney pointed out that copper stocks have been very tight, "hovering around four weeks' supply or less for some time now--and prices have responded accordingly." He said he expects this "clear relationship between price and availability to continue." In 1987, he recalled, "we could barely visualize 80-cent copper," but now Commodities Research has found prospects for the next two years "extremely bullish ... a peak in cash prices during this period of close to $2.00 a pound is not out of the question." Mooney refused to predict prices but said he expects volatility "and perhaps some wide wings in price."
Mooney discussed Cyprus's recent acquisition of Warrenton Refining, a secondary copper smelter. "We purchase and toll copper scrap and convert it into high-purity copper ingot and bar. We plan to produce something over 70 million pounds this year," he noted.
A graphic description of copper scrap handling at AT&T Nassau Metals, one of the world's most comprehensive secondary copper refiners, was given by John J. Taylor, Sr., account executive with the company in Gaston, South Carolina. He told of the firm's state-of-the-art technology in scrap reclamation and environmental controls. The company reclaims and refines copper, precious metals, lead, and other by-products from obsolete electronic and telecommunication equipment and cable. In its tolling service it converts scrap cable, wire, and copper-bearing materials. Taylor also discussed how AT&T Nassau handles materials that contain PCBs and lead.
Ronald Peek, Southwire Co., Carrollton, Georgia, and chairman of the Copper Subcommittee, chaired the meeting.
Fire Safety
Good Housekeeping Critical
At the Safety-Committee-sponsored workshop, "Protecting Your Assets: A Fire Investigator's Recommendations," David Diedrich, a certified fire investigator from Norgem Investigations in DeKalb, Illinois, emphasized that most fires are caused not by spectacular failures and mistakes but by ordinary conditions that escape detection and ultimately create the potential for disaster.
Three things are necessary for a fire to occur: fuel, heat, and oxygen. Diedrich expanded on this concept to describe how everyday conditions can lead to fires. For example, a common misconception is that high temperatures are necessary for a fire to occur. Actually, according to Diedrich, commonly occurring temperatures can cause chemical changes in materials that ultimately may lead to fire. As an example, he explained that a 2-inch by 12-inch wooden beam, if kept in contact with a relatively low-temperature heat source such as a steam pipe, will undergo a chemical change and will eventually ignite at a temperature of 150 degrees F or less. This process, called pyrolysis, can occur in any combustible material such as wood or paper, and may be a major factor in many fires.
Pursuing this thought, Diedrich explained why good housekeeping is a critical element in any company's fire safety program. Combustible materials, such as cardboard boxes or paper, which are stored near a source of heat, can become unexpected fire hazards. He cited as examples of "fires waiting to happen" storing cardboard boxes adjacent to boilers and paper trash on the floor near a parts grinder. In the former case, the heat from the boiler could eventually ignite the cardboard causing a potentially severe fire. In the latter case, sparks from the grinder could ignite bits of paper on the floor and result in a major loss.
Another area of extreme importance for fire safety is respect for electrical systems. Diedrich explained that the insulation on electrical cords is designed to protect the wiring against damage as well as to dissipate the heat that builds up because of electrical flow. However, if combustible materials are stored on or around the wiring, the heat may not be dissipated and could create the conditions for a fire. More importantly, insulation damage caused by storing materials directly on the wiring could lead to a short circuit, igniting the adjacent combustible materials.
Another practical suggestion was to assure that protective covers on electrical panels are made of metal, not wood. Diedrich urged that workshop participants survey their operations, note any potential problems, and take immediate corrective actions.
He also urged participants to inspect their operations for proper protection of liquefied petroleum gas tanks and bulk systems, natural gas regulators and piping, and bulk oxygen systems. Because of the potentially catastrophic losses that could occur if gas or oxygen systems are ruptured, Diedrich advised that substantial barriers or other methods be used to prevent accidental contact.
His simple explanations for common fire problems and his familiarity with scrap processing operations provided valuable insights to the workshop participants. While expressing sympathy for the industry's problems, he urged processors to help themselves by implementing effective inspection procedures to identify and correct the obvious sources of damage.
Substance Abuse Programs
Employers Join the Fight Against Drugs
The controversial subject of establishing an employee drug and alcohol program was the subject of the ReMA Transportation Committee's convention workshop, moderated by the committee's chairman, Frank J. Cozzi, Cozzi Iron & Metal, Inc., Chicago. Panelists included member companies that already have implemented programs--well in advance of mandatory requirements that apply to ReMA members with interstate truck drivers or with certain government procurement contracts over $25,000 or federal assistance grants.
The proper approaches to implementing a company program were debated by Mark Cohen, Central Metals Co., Atlanta; Joel Denbo, Denbo Iron & Metal Co., Inc., Decatur, Alabama; and Joseph Kovacich, Miller Compressing Co., Milwaukee. In addition to benefiting from the experience of others, attendees received written copies of sample company drug and alcohol programs and U.S. Department of Transportation (DOT) driver drug testing requirements.
Panelists agreed that the toil drugs and alcohol take on worker safety and productivity is high. An honest assessment of these costs often more than justifies the investment in a company program.
Primary steps in designing a company program were analyzed. The first step is to recognize and understand the substance abuse problem from the abuser's standpoint. A program can be designed to end substance abuse in the workplace by using drug education to prevent abuse, by allowing employees an opportunity to participate in a rehabilitation program, or by terminating employees. Panelists disagreed on whether the company should give employees a rehabilitation opportunity. However, for those companies that offer rehabilitation via an employee assistance program or via company health insurance coverage, panelists agreed a sound company policy places a limit on the number of rehabilitation opportunities, provides close monitoring of employee participation in treatment and aftercare drug-free status, and communicates clearly what consequences follow a relapse.
Speakers encouraged consultation with attorneys, drug testing laboratories, providers of employee assistance programs, rehabilitation centers, recovering addicts and alcoholics, and other companies with drug and alcohol programs.
Another recommendation was to prepare and publish a company policy. The policy should set out clearly who is covered as well as employer and employee rights regarding testing, rehabilitation, and continuing employment status. ReMA members were urged to be especially careful about making provision for transportation to the test site and back to work or home for those employees sent from work for testing based on reasonable suspicion of drug use.
The last step is to design a strategy to inform employees of the details of the program. Along with careful planning, this step is the key to smooth implementation.
Public Relations
“Never Say ‘No Comment’”
"You're entitled to tell the best story you can about yourself," said ]SRI public relations consultant Dean Reed during "Public Relations and Your Company: From ABC to Crisis Management," a workshop sponsored by ReMA's Public Relations Committee. Barry Hunter, Samuel G. Keywell Co., Plant Div., Baltimore, and committee chairman, moderated the session. Although public relations can seem complicated to some, Reed defined it as simply communicating to an audience to give them the best possible understanding of your company.
"You can gain the most by dealing directly and straightforwardly with facts and honest beliefs," he continued. In dealing with the media, he advised company representatives never to say "no comment": state the facts thoroughly and simply. If you don't have an answer, say so and promise to find one-then follow up. "Deal with the media the same way you handle your business relationships and your trading partners," he advised.
The media perspective was provided by Steve La Rue, environmental reporter for the San Diego Union. He advised learning whom to contact with industry news at your local newspaper and radio and television stations, and suggested appointing a person at your firm for reporters to contact. "It's critical for you to have experts you can put at [the media's] disposal."
This is in part due to the time constraints on news professionals, La Rue said. They don't have time to do a major study of every issue they're going to cover. He believes there is a generalized perception that reporters are anti-industry or hostile to business. "Don't assume a reporter is out to bankrupt your business or discredit you" when an error appears in print, he explained. "Not having enough time is the main villain in most errors newspapers make."
If an error does appear, he suggested first ensuring your facts are correct and support your position, then calling the reporter--he may have made an honest mistake and should be willing to correct it in print. Contacting the newspaper’s reader representative (ombudsman) is the next step.
Manager of public affairs at ARCO, Los Angeles, William E. Duke told attendees that public relations is three-pronged, involving media relations, risk reduction, and crisis management. He advised finding out who in your community is willing to support your firm. Once a support network is built, he said, you are in a better position in the event of a crisis.
He also suggested hiring a public relations professional and telling him or her your situation and what you want accomplished. Request proposals from two or three public relations firms and compare, Duke said. Reed added that you should check references by contacting other companies for which the public relations firms have worked.
Community involvement is emphasized in the public relations efforts of Louis Padnos Iron & Metal Co., Holland, Michigan, according to Shelley E. Padnos, the firm's executive vice president and chief administrative officer. But, she said, the company's public relations include many other elements. Padnos mentioned hiring a public relations professional, increasing press coverage by getting to know local editors and reporters, and sending press releases. In addition, the firm has increased its political involvement--for example, Padnos explained, rather than mailing checks to legislators in support of various fundraising activities, company representatives now visit legislators. She acknowledged that "I haven't said anything you don't already know," but it's making the effort that counts.
Answering a question on how beneficial it would be to have "canned" press releases on current issues distributed by ReMA to member firms, La Rue said the releases would have to relate the issue to the member's local area for it to be useful to the media.
Padnos discussed the value of a pamphlet explaining her company's operations: "People won't sit still for a video or a slide show, but they'll sit there long enough to go through the pamphlet." Reaction has been positive to her company brochure, she said, especially by those who had no idea what scrap recycling is all about.
Part of the Solution
Husbands and Wives Must Communicate
If Arnold Gachman practices just half of what he preaches, his wife, Harriette, must regularly hear an earful. Addressing the convention session "Challenges Facing the Scrap Recycling Industry," the ReMA second vice president's loud and clear message to members was: Talk to your significant other.
Although this was a spouse program, Gachman's message was not off-target; his audience included several husbands among the wives. Janet and Ken Cohen, Marilynn and Richard Abrams, and Marilyn and David Serls, along with others, listened as he covered the current challenges to the recycling industry, including Superfund and mandatory source separation. But rather than describing the environmental issues in depth, Gachman spent most of his podium time discussing family issues challenging the scrap business, encouraging husbands to share with wives business and industry information and problems, and encouraging wives to ask questions.
"If we're going to be successful as an industry, then we have to make our families knowledgeable about what we do," he said, extending the need for communication with spouses to the need for openness with children about business operations.
Gachman covered such sensitive family-corporation issues as considering your child's qualifications for a managerial role in the business, and what to do when men and women marry into--and get involved in--the family business. He also discussed the need for strategic planning and tied it to the family by urging "each of you to sit down with your husbands and your wives and talk about your plans ... what your goals are ... where you want to be 5 years from today, 10 years from today."
Gachman acknowledged the stereotypical scrapman's hesitance to let his wife know when business is going well. "There are a lot of husbands who are afraid to talk about it ... they say, 'if I tell my wife what we made last year, she's going to want a new house.' So as a result, we keep it within ourselves ... there's never such a thing as a good deal. We didn't make a good deal; we made a deal."
Gachman advised wives left in the dark--whether intentionally or not--regarding not just challenges to the industry but its successes, to approach their husbands "and say, 'I want to know what's going on ... there may be some way that I can support and help you ... I want to be a part of this too.'"
Production Incentive Plans
Goals, Praise, and Measurement Are Key
Retaining good employees, improving product quality, and increasing productivity are among the benefits gained by scrap processing industry managers who implement a production incentive plan, according to speakers at "Setting up a Production Incentive Plan for the Scrap Recycling Industry," a workshop sponsored by ReMA's Education and Training Committee. Kenneth Cohen, Cohen Brothers, Inc., Middletown, Ohio, and chairman of the committee, opened the workshop.
Central Metals Co., Atlanta, has just such a plan in place, explained Martin Kogon. His firm's incentive plan focuses on individual and group objectives, pay increases, and employee recognition. It emphasizes sharing the benefits of increased productivity, respecting people's knowledge, management interest in employee activity, and feedback mechanisms for monitoring progress. Kogon added that accurate, timely feedback is the ultimate tool for maintaining the program s success.
He said praising good work helps create results. Company victories and successes should be celebrated, he continued, and managers should let people know they are part of a winning team.
The results at Central Metals, Kogon went on, have included making more products with fewer defects, decreasing employee turnover, providing more competitive wages, and raising productivity levels a great deal.
Measuring the results of your incentive plan was discussed by Barry Schuchman, Kasle Recycling Metallic Resources Corp., Indianapolis. He reviewed a plan used by his firm called Improshare. The goals of Improshare (which stands for Improved Productivity through Sharing) are to raise productivity, reduce costs, improve product quality, and reduce scrap and rework through efforts of employees and the company as a whole. Basically a cash bonus system linked to goals, Improshare is based on a team concept.
Various formulas are used to measure existing productivity against improved productivity. As it takes less time to make a higher quality product, employees are paid bonuses; savings are shared equally by employees and the company. Schuchman said ongoing effort is needed to sustain the program.
Political Luncheons
Recyclers Need to Get Their Message Out
At a round of regional political luncheons, legislators briefed convention attendees on the current issues facing the 101st Congress, then offered their views on the recycling industry's most pressing concerns.
Congressman Lawrence Smith, D-Fla., stated that manufacturers must be forced to find alternatives to hazardous materials use, or else risk a ban against their products. With regard to the recycling or disposal of unsafe or hard-to-recycle items, he said, "You did not create the problems ... and you should not bear the sole responsibility." He emphasized that manufacturers and consumers need to share the responsibility, and recognized that recyclers are providing a valuable service.
Congressman Smith commended the recycling industry for its recent "white goods" recommendation, and indicated that he would talk to his Capitol Hill colleagues regarding the issue of joint and several liability. He urged ReMA members to talk with their federal and state legislators on issues of mutual concern.
Congressman Dan Schaefer, R-Colo., a member of the House Energy and Commerce Committee, emphasized that states and localities should be left free to tailor disposal methods to fit local needs. He summarized what he viewed as the major obstacles to expanded recycling: the lack of markets, the high costs involved in material separation, the convenience of disposal materials, and the public's general resistance to change. He also said that the Resource Conservation and Recovery Act (RCRA) reauthorization would be a difficult process, and that recycling issues will be a key consideration under the RCRA deliberations.
In response to a question regarding the best way to work with legislators, Congressman Schaefer stated that few legislators have direct business experience; he encouraged recycling industry members to continue efforts to better educate legislators about business operations and the adverse effects some regulations can have on business.
The important contribution of the recycling industry was acknowledged by Congressman Gerry Sikorsky, D-Minn.
When asked his views on the retroactive responsibility for hazardous waste cleanup that Superfund imposes, the congressman, a member of the subcommittee with jurisdiction over Superfund, began from the premise that the polluter must pay and that we cannot have a liability framework that gives people an economic incentive to pollute. The challenge for the industry and for lawmakers, he said, is to design a better approach that allows the good work of legitimate recycling to continue with minimal environmental damage, while cleaning up past problems.
In a wide-ranging presentation concerning trade and environmental issues, Congressman Sam Gejdensen, D-Conn., reviewed the history of problems and successes under the Export Administration Act and discussed many environmental issues involved with RCRA, TSCA, and Superfund. The congressman provided a unique insight into the development of a fair short-supply provision dealing with metallic scrap. He expressed great interest in, and a commitment to, addressing issues negatively affecting the ability of the industry to recycle.
Environmental Risk Update
Stay Informed, Follow Regulations, Keep Records
"Protect yourself" was the key message at the general session on environmental risk led by ReMA staff members Duane A. Siler, assistant executive director and counsel; Debra R. Levin, director of environment, trade, and transportation and assistant counsel; and David M. Wassum, director of risk management. Considering the scope of environmental regulations and proposals affecting recyclers, the team advised being aware of legislative details, developing and implementing procedures for handling various materials, and keeping thorough records.
Because of new, detailed rules issued last year on underground storage tanks, said Wassum, tank owners must be sure that new tanks meet certain stringent requirements and that old ones are upgraded within 10 years. All tanks must be tested for leaks within five years. Wassum encouraged owners of old tanks to begin testing as soon as possible.
Wassum said the regulations covering used oil "are among the most imprecise I've seen in a long time." He said ReMA suggests testing used oil for contaminants before it leaves a facility, and he recommended documenting the amount of oil shipped, its destination, and its source. He added that it is imperative to test first any used oil burned on the premises in a space heater. Regulations forbid burning used oil in a space heater containing any detectable level (two parts per billion) of PCBs.
Electrical equipment, transformers, and large capacitors used by the scrap processor should be checked for PCBs, Wassum said. New regulations will require removal or upgrading of this equipment. This equipment is now subject to proper marking, quarterly leak inspections, and extensive recordkeeping by the owner. "These rather mundane requirements are important because, if you don't follow them, you are potentially subject to a fine of $25,000 per day," Wassum warned. Although most scrap processors would not be affected, he said certain types of oil in hydraulic equipment contain PCBs as well, and noted that it is illegal to operate hydraulic equipment with PCB concentrations of more than 50 parts per million.
Recyclers should identify every form in which water leaves their facility, said Siler. In some cases, a permit is required. He suggested the processor review any service agreements he has with a local sewage treatment plant to determine the plant's requirements concerning controlling toxics.
In 1987 the Environmental Protection Agency began developing regulations requiring permits for storm water discharges. Siler said scrap salvage and recycling operations likely will be covered by the rules, and compliance probably will be required by January 1991. ReMA has suggested that EPA either suspend the requirements for recycling operations or delay compliance until at least October 1992. He cautioned, however, that some states may already have storm water regulations in place that affect recyclers.
Levin discussed lead-acid battery intake, storage, and shipping precautions. She said affected parties should watch for leaking acid and lead contamination, and should be aware of state restrictions. Batteries taken into a facility should be separated from other forms of scrap, she advised, to avoid the potential for contamination and to allow them to be checked. Processors should have programs in place for dealing with leaking batteries, either on acceptance or in storage.
Pulling People Together
ISRI Officers Discuss Plans for Facing Industry Challenges
Neutralizing chemicals should be readily available, and ideally prepositioned. The Department of Transportation has rules governing lead-acid battery shipment with which shippers should familiarize themselves, Levin said.
Because all material received as scrap or shipped as scrap or waste is considered "solid waste," Siler told the group, processors are required to determine whether each incoming and outgoing material is a hazardous waste. If it is, they should know whether it is subject to regulations and ensure it is properly managed. He emphasized that an important step is to keep complete records on these materials.
"There is no quicker way to bring down the wrath of EPA than to illegally handle PCB-containing materials," Wassum stated; he listed materials including small-appliance capacitors, shredder fluff, and transformers. He called transformers "time bombs waiting to go off" because in certain cases they may be legally sent to scrap processors while containing potentially hazardous fluid. Wassum mentioned the EPA pilot program to determine the extent of PCBs in shredder fluff and urged processors to be extremely cautious in this area in the meantime.
At an end-of-convention press conference, the national officers of ReMA discussed the current challenges in recycling and the present and future ability o their association to meet the challenges head-on.
Noting the interest Ronald Reagan displayed in the "Design for Recycling" concept during his convention keynote address, ReMA President Richard E. Abrams stated, "We're getting more of a response from the political sector [than from the manufacturing sector] ... we're getting a lot of people in government-elected and appointed-who see some real merit in the position."
Arnold Gachman, ReMA second vice president, agreed: "I think it's interesting that other people are beginning to pick up on the idea of design for recycling. We've been professing this for a number of years, but it seems to be in vogue now." Still, he pointed out, while more and more people are acknowledging the ReMA position as the right approach, few manufacturers are "taking a real look at products and starting to make design moves that will benefit our environment."
A way to motivate manufacturers to make appropriate design moves was proposed by ReMA's Public Relations Committee, noted David Serls, first vice president of the association. He said the recommendation called for a "Design for Recycling" sticker that would go on consumer goods and other items that were manufactured in accordance with the concept.
But, as ReMA Executive Director Herschel Cutler mentioned, "The sticker only has value if people think it's valuable. Society at large [must be] willing to look for that [label] and not buy products unless they have it ... like with the Good Housekeeping seal."
Gachman said that while ReMA thinks design for recycling is a credible solution to future environmental problems, the approach cannot address the problem of recycling existing products that contain hazardous materials.
That problem, presently underscored most by the United States Environmental Protection Agency's investigation into PCBs in shredder fluff, packed the room for a convention session featuring EPA’s Martin P Halper and Denise Keehner, both of the Office of Pesticides and Toxic Substances. Commenting on the session, Abrams said, "It's been a rocky road for the last eight months or so between that particular segment of the EPA and ReMA ... but I'd like to think that this visit [by Halper and Keehner] was the continuation of our current better, more fruitful relationship. If nothing else, it showed them that our members understand the problem, and it showed us that they have jobs to do and within certain parameters--they have a law to follow and they have to do it carefully. I think at this point we're in a much better position to work together."
In addition to better working relations with EPA as part of the solution to the recycling industry's problems, Abrams mentioned a problem-solving plan launched earlier in the convention week by ISRI: "From Dialogue to Decision." It's the 1989 extension of the association's 1988 "One Voice" effort, which was designed to start pulling ReMA members together. Said Abrams, "We've done better than we expected to do in a year, but we're not there yet." The "Dialogue to Decision" program will send ReMA national officers and some members of the Board of Directors and staff out to chapters to discuss industry issues. The result, Abrams said, will be "a three- to five-year plan to focus our members' message and get it to the public."
The message ReMA Treasurer D. Cap Grossman delivered to members at the convention's President's Breakfast was positive; at the press conference he expanded on his financial report: "Any time you can go before that large a percentage of your membership and be able to avoid the statement 'We're going to raise your dues,' you've got good news. We did not have to raise dues going into '88 and going into '89, and that's the biggest percentage of our revenues." He pointed out that because of members' reevaluation of their dues category based on the amount of their sales and because of the general success of the industry over the past couple of years, dues are coming in strong and ReMA has a positive operating budget as a result.
Grossman also noted the organization's "substantial" reserves, which are the net result of the combined reserves of ISIS and NARI (ReMA's predecessor organizations). "We feel very confident that we're going to be able to fund the programs that we're going to need, not only this year but over the next four to five years."
The association treasurer attributed part of the good financial news to the volunteer "labor" of ISRI. "We're seeing great resources coming together," Grossman said, "and that's not a very easy thing to find."
Abrams agreed, saying, "Most of our good ideas come out of our quarterly meetings, where we're fortunate--we've been getting 300, 400, 500 people at the meetings, just about all of them traveling at their own companies' expense. A lot of brainpower is collected in one area four times a year, and I don't think there are a lot of associations that can say that."
Aside from pulling existing members together, attracting additional members into ReMA is a goal of the national officers. James A. Fisher, ReMA's secretary, who oversees membership, discussed the recruitment efforts he encouraged at the President's Breakfast: "It is only through our members' knowledge of companies that fit the criteria of membership but are not affiliated that we can increase membership."
The recruitment push, according to Fisher, stems from the purpose of the ReMA merger: "It was to broaden the base of the industry and to coalesce industry members. It's a case of the more, the merrier. … Whether on the Hill or at the state and local level, the more members contributing to ReMA's legislative and regulatory efforts, the more credibility we have." •