May/June 2003
Modest scrap-export guru Peter Avagliano has seen it all in his 53-year career, yet he still says he never has a boring day.
By Si Wakesberg
Peter Avagliano takes a long-term view of the ferrous scrap market, which is what you’d expect from a man with 53 years in the business. That experience is impressive in its own right, but what’s equally astounding is that Avagliano has worked his entire career at the same company in the same location—Schiavone-Bonomo Corp. in Jersey City, N.J. (which in 1998 became Hugo Neu Schnitzer East, an affiliate of Hugo Neu Corp. and Schnitzer Steel Industries Inc.).
Avagliano’s vast experience has made him one of the scrap industry’s most knowledgeable executives, especially in the area of ferrous scrap exports. Now 71, he still exudes energy and enthusiasm as he discusses his career, sitting behind a desk covered with papers.
In the Beginning
Avagliano didn’t set out to have a lifelong career in the scrap industry. In 1949, he had just finished his first term at Saint Peter’s College in Jersey City when he felt the itch to enter the business world. His father had a friend who worked for Otis Elevator Co. (Harrison, N.J.), whose scrap was handled by Schiavone-Bonomo. This friend said a kind word about the young Peter to Schiavone-Bonomo’s management, and Peter soon found himself working in the scrap industry.
Prior to that job, Avagliano only knew of the scrap business through one of his uncles, who operated a salvage yard in Berkeley Heights, N.J. “I used to read the Waste Trade Journal at his house,” he recalls.
With this limited experience, Avagliano began his scrap career in 1950, starting out as an office assistant for the then-minimum wage of 75 cents an hour. His scrap career was interrupted in 1953 when he was drafted into the U.S. Army. That same year, the federal government finally lifted its World War II-era export ban on scrap, and three companies—Schiavone-Bonomo, Luria Brothers, and Western Steel—began shipping scrap to Europe.
After Avagliano completed basic training in Louisiana, he served out his duty at Fort Riley, Kansas, finishing as a sergeant with the 10th Mountain Division infantry unit. The most valuable lesson he learned from his military service was simply “how to work with and get along with people,” he says.
After his discharge in 1955, Avagliano returned to Schiavone-Bonomo, leaving his office position to work in the firm’s dockside operations, loading vessels for export. In 1956, he also resumed his college education by taking night classes at Seton Hall University’s Newark, N.J., campus, ultimately earning a degree in management in 1961.
A year later, in 1962, Emanuel Moskowitz, then president of Schiavone-Bonomo, called Avagliano in from the plant to work in the firm’s growing export department. He soon became knowledgeable in the field and has since “worked throughout my business career mostly with the export of U.S. scrap,” he says.
Tracking the Changes
In his career, Avagliano has witnessed massive shifts in the scrap industry, such as the baling press giving way to the shredder and the growth of electric-furnace steelmaking, which “resulted in better-quality scrap and increased scrap usage,” he says.
Smiling, Avagliano recalls a statement by the late Herman Moskowitz, a top executive at Schiavone-Bonomo and one of the deans of the scrap industry. In the statement, which dates to 1926, Moskowitz asserted that he saw no future for No. 2 bundles. That grade, in fact, became a big seller in the export trade, prompting Moskowitz to recall his statement ruefully. “So much for predictions,” Avagliano says.
Noting other changes, Avagliano observes that “there are fewer family businesses in the scrap industry. And, of course, mergers and consolidations have changed the face of the business.” In his view, there’s always opportunity for strategic mergers and acquisitions. The buying frenzy of the 1990s won’t happen again, however, given how some of the larger consolidations proved “ill-advised,” as he puts it. “We certainly won’t see Wall Street funding such consolidation the way it did a few years ago,” Avagliano says. “Despite all that, I have faith in the industry’s future and, in my opinion, scrap is still a terrific business.”
Another vast difference in the industry is what Avagliano calls “environmental consciousness,” noting that the environment along with safety requirements and insurance problems occupy a major portion of a scrap executive’s time today. “When I started in this business, we worried about supply and demand,” he says, “but now it’s all these other things that are causing anxiety.”
The Sept. 11 terrorist attacks brought about many changes as well. Looking out the windows of the Hugo Neu Schnitzer East offices, Avagliano says wistfully, “we saw the Twin Towers go up and we saw them come down.” The negative economic repercussions from the attacks have been obvious and undeniable, he says.
Domestically, another notable change is that relations between the scrap recycling industry and the steel industry have been improving, Avagliano says. In particular, he applauds current ReMA Chair Charles “Cricket” Williams for his focus on improving these relations.
Once again offering a long-term view, Avagliano notes that this relationship issue has persisted since the ferrous scrap industry’s first trade association—the Institute of Scrap Iron and Steel (ISIS)—was founded in 1928. “Even then, the founding fathers of ISIS knew they had to improve relations with their steel mill customers,” he notes. “Some of the horror stories involving scrap people and mills are part of anyone’s upbringing in the scrap industry.”
To illustrate his point, Avagliano pulls out a copy of a letter written by Michael Bonomo to the president of a large steel mill to complain about the mill’s cancellation of scrap orders. Bonomo’s letter is dated Nov. 26, 1942, a time when the scrap industry was working overtime to provide raw material for the war effort. At the end of the letter, Avagliano says, Bonomo wrote: “We have served your company for many years faithfully and energetically. We felt right along we had built a world of goodwill. Your attitude leads us to believe that we were very much mistaken.”
Though problems continue to exist between the scrap and steel sectors, recent efforts—such as ISRI’s industry-bridging “Steel Scrap 101” seminar in February—give hope for ongoing improvement. After all, Avagliano notes wisely, “there are two sides to every story. The scrapman has his view, the steel executive has his view, and somewhere in the middle is the truth.”
Global Shifts
As you’d expect, the export of scrap is a subject close to Peter Avagliano’s heart, and he has seen this market change hand-in-hand with the domestic situation. Overall, he observes, the flow of scrap from the East Coast has shifted from U.S.-to-Europe to U.S.-to-Asia. In the 1950s, 1960s, and 1970s, it was Europe—particularly Italy and Spain—that absorbed a tremendous tonnage of U.S. scrap, he says. The United States also shipped scrap to the United Kingdom until 1977, when that nation became an exporter itself. Italy stopped buying U.S. scrap in the early 1980s, only resuming its purchases this year.
“The big change,” Avagliano asserts, “has been in shipments to China, South Korea, Mexico, and, lately, Turkey.” (In 2002, for instance, China bought 2.4 million mt of U.S. ferrous scrap, while South Korea took almost 2 million mt and Mexico imported about 1.2 million mt.) Meanwhile, Japan—once a big importer of U.S. ferrous scrap—has become a net exporter.
Currently, Avagliano says, supplies of ferrous scrap have become tight for several reasons, including stronger export demand, the “charged political situation” in Venezuela, which has reduced DRI production, and Ukraine’s tax on exported scrap, which has reduced that flow. Taken together, these factors have “resulted in a sharper demand for scrap globally,” says Avagliano, who expects demand to hold through this year.
Teachers and Mentors
In his long career, Avagliano says he has been privileged to know many leading figures in the scrap industry—individuals such as Richard Bonomo and Herman Moskowitz. Others served as invaluable teachers and mentors to him. In Schiavone-Bonomo alone, Emanuel Moskowitz, Alfred Sforza, Gerard Bonomo, and Joseph Laraja all influenced Avagliano in his career, and he still mentions them gratefully and respectfully.
In 1967, when Schiavone-Bonomo entered into a joint shredding venture with Hugo Neu Corp. and Proler Steel Corp., Avagliano also came to know Hugo Neu, whom he ranks as “one of the finest teachers in the industry.” In particular, he recalls Neu’s early advice to learn something new every day. Also, on his first visit to Neu’s office, Avagliano noticed the following framed quote by President Calvin Coolidge—a quote that influenced Peter in his scrap career:
Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent.
Avagliano also expresses his respect for the current senior management of Hugo Neu Schnitzer East, saying that its leaders are among the outstanding industrialists he has known. And even after more than half a century in the business, Avagliano finds he can still learn from younger scrap professionals such as Robert Kelman, the firm’s general manager.
Through his career as well as his involvement in ISIS and ISRI, Avagliano has also accumulated a host of friends in the industry—including many overseas acquaintances—with whom he keeps in close contact. Recently, for instance, a retired Japanese friend made a point to see Avagliano during a visit back to New York. As Peter recounts, “While stationed here, my friend took a liking to the Metropolitan Opera. He saw three operas during his visit and couldn’t miss the chance to again see Jersey City.”
Such friendships are just one defining feature of Peter Avagliano’s long, rewarding career in the scrap industry. Looking back on his tenure in the business, he sums it up as follows: “In my dealings with scrap people, I haven’t been disappointed very often. It’s a unique business that I love. While things may not always be to my liking, I can honestly say that I’ve never spent a boring day at my work.”
Peter’s Portfolio
Background: Born Sept. 22, 1931, in Maplewood, N.J., where he spent his childhood. Moved to Jersey City, N.J., in 1952 so he could be close to the Schiavone-Bonomo offices. “I’m not much of a commuter,” he says, jesting that “the other night it took me 11 minutes to get home, so I’m thinking of moving closer.”
Education: Earned a degree in management from Seton Hall University in 1961.
Family: Married Mary Castagna, a coworker at Schiavone-Bonomo, in 1952. One son (John), one daughter (Joan), and six grandchildren.
Career: Joined Schiavone-Bonomo Corp. (Jersey City, N.J.) in 1950 and has worked for the company (now known as Hugo Neu Schnitzer East) ever since. He began as an office assistant and plant worker, was promoted to vice president in 1976, then became executive vice president in 1985. He currently serves as a consultant to Hugo Neu Schnitzer East.
Association Highlights: Active in ISIS, including service as president of its New Jersey Chapter from 1977-1979 as well as chair of its foreign trade committee in the late 1970s and early 1980s.•
Si Wakesberg is New York bureau chief for Scrap.
Modest scrap-export guru Peter Avagliano has seen it all in his 53-year career, yet he still says he never has a boring day.