Gershow Recycling—Tending the Scrap Garden

In three short decades, Gershow Recycling has become a scrap giant on Long Island, a position it plans to keep and expand.

BY KENT KISER

Kent Kiser is associate editor of Scrap Processing and Recycling.

In 1964, Sam Gershowitz decided he wanted to go into business for himself, so he founded an auto parts and wrecking company on New York's Long Island with his brother Louie. His entrepreneurial interests soon turned to scrap, however, when he noticed that car hulks were being discarded in local landfills. He thought the towns were crazy to be paying to throw away old cars, and they thought he was crazy for offering to pay $1 to reclaim each hulk. But Sam knew a scrap mother lode when he saw it, and he soon began mining the landfills, recovering thousands of hulks using "an antiquated boom truck, a beat up tractor and trailer, and Long Island 's first portable car flattener," he recalls. In no time, Sam found himself running a viable scrap operation.

Today—29 years later—Gershow Recycling is more than viable. In fact, with revenue growth of as much as 500 percent per year, and several thousand percent in the past 15 years, the firm has become what's considered to be the largest ferrous and nonferrous scrap recycling company on Long Island, with processing plants in Medford and Lindenhurst, and a feeder yard in Bay Shore. And now that Sam's twin sons—Kevin and Elliot—are helping to run the business, the company has every intention of remaining Long Island 's scrap leader.

Gershow Recycling isn't simply a local force, however. The company buys from Long Island suppliers an array of ferrous scrap, including No. 1 and No. 2, busheling, plate and structural, car hulks, light iron, and underground storage tanks. But it draws nonferrous and specialized scrap—such as shredder pickings, cast aluminum transmissions, electric motors, and armatures—from more than 25 states and Canada . If we were a fish store," jests Sam, the company's president and sole owner, "we'd say we sell anything that swims."

On the selling side, Gershow currently exports about 85 percent of its scrap to such countries as Turkey , Pakistan , and India , a strategy afforded by the storage and loading facilities the firm maintains at the Port of Newark, N.J. us," Sam says.

Elements of Success

When asked why Gershow Recycling has succeeded, the Gershowitzes have no shortage of reasons, beginning with the firm's attention to its suppliers. "We treat every customer like a million bucks," says Kevin, vice president. This special treatment is reflected not only in prompt payment—usually on-the-spot or within a few days—but also in special touches, such as giving every supplier a bottle of wine or liquor decanter at Christmastime. "At Gershow, a customer is not just a customer," says Elliot, vice president of financial administration. "We treat our customers the way we would expect to be treated, and that means with the utmost fairness in mind."

The company has also succeeded because it is financially strong and debt-free. This strength has many benefits. For one thing, Sam notes, "What you see here, we own. That's why we can weather the tough times." Also, with money in the bank, Gershow Recycling can move quickly on business matters. "We don't have to worry about getting a loan," Elliot points out. "We don't have to wait for a bank's approval. We just do it."

Last fall, for example, Gershow Recycling decided to enter the wire chopping business, so the firm's executives visited four existing choppers, reviewed the merits of 10 different machines, purchased the equipment, and started up operations—all within a month. "This company is extremely fast-moving," asserts Kevin. "We don't act rashly—we think things through—but we don't sit on things. We don't let grass grow under our feet."

Employee Excellence

Above and beyond these strengths, the Gershowitzes note without hesitation that Gershow Recycling's 125 employees are the cornerstone of its ongoing success. "What makes us successful is our people," Elliot notes. "We have a staff that cares." As one significant example, Sam points to Joe Bertuccio, the firm's vice president of operations and resident mechanical genius. Bertuccio, who has been Sam's dependable right-hand man since 1974, is largely responsible for the firm's smooth operation and mechanical efficiency, the Gershowitz trio points out. As Kevin notes, "There's more to the success of this company than the three of us."

How has Gershow Recycling managed to build its dedicated work force? In addition to paying its employees well, providing total health coverage, and promoting from within, the company guarantees job security. "I've been in business 29 years and I've never had to lay anybody off," Sam boasts.

Gershow also takes extra steps to demonstrate to its workers that the company cares about them. At Thanksgiving, for instance, the firm has a tradition of giving every employee a fresh turkey from a local farm, and it is renowned for its end-of-the-year bonuses. "We haven't missed one year yet," Sam says. "Even this year, as bad as business has been, our employees will still get a bonus."

Perhaps most telling is the company's concern for each employee's needs and problems outside the workplace. "We treat everybody with the same fairness," Elliot explains, "but people also get special attention because everyone has different needs. We try to assist employees as much as we can in their personal lives." One time, for example, the Gershowitzes helped an immigrant employee from Poland close on a house, serving as his translators and advisers. "If our employees want to buy a house or a car, we help them out," Sam says. "They're not just a number. It's like one big family here." As Kevin observes, "Each one of us knows the names of the employees' spouses. When an employee is sick, or an employee's child is sick or injured, we know about it, and we make sure we show that we care."

The result of these efforts? The firm's employee loyalty and productivity is high—"Everybody here is 110-percent for the company," Elliot says—and it has virtually no turnover. "I can't remember the last person we hired," Sam says. "People usually work with us until they retire."

Even with its highly regarded existing staff, Gershow Recycling continuously seeks to recruit new employees into the business. "We want to get more people to grow with our company," Elliot says. "We want some young blood, people who are aggressive, people who want to make a change."

Kevin and Elliot, who entered the business full-time in 1989, are the most prominent examples of the company's new wave of young executives. Both have a solid understanding of the scrap business despite their young age—the result of spending many years of weekends, holidays, and summers sorting metal and assisting their father. Although they are twins in appearance, their strengths are far from identical. Kevin's educational background in political science and public speaking makes him the perfect "outside man," adroit at handling the firm's public and employee relations. Elliot, on the other hand, holds a degree in accounting and serves as the "inside man," tracking the company's costs and watching its bottom line. "My brother and I work well together," he says. "We have a good balance."

Maintaining Control

No matter what other strengths a scrap company has, however, it cannot succeed without effective management. For Gershow Recycling, this has come to mean, in large part, computer management. Two years ago, the firm installed a customized computer system in Medford to track its payables, receivables, sales, and inventory. "Having information at your fingertips is essential to being successful," Kevin says. In addition to saving time—"We'd need a staff of 10 people to do by hand what we're doing now by computer," Elliot observes—the system has enabled the firm to "know every day what every single commodity costs us to the penny," says Controller John J. Bellotti. Moreover, the system, which includes eight terminals and five printers, helps Gershow identify any weak points in its operations. "Mistakes are rare," Kevin says, "but when they happen, we catch them. There's a lot of control here."

Gershow Recycling also manages its plant operations closely, always striving to improve its efficiency and produce a better scrap package. "We all watch the quality of our products," Sam says. "Any time we can upgrade a machine to make scrap come out better, or improve a machine environmentally, we do. If we need new equipment, we buy new equipment." Last year, for instance, the company spent $500,000 on a "whisper-quiet" Harris pedestal crane because the machine could feed scrap to its shredder more efficiently than the previous crawler crane. "The whole philosophy of this company is `What can we do to improve this?'" Kevin notes. "This can mean adding machinery, pouring more concrete, putting up a new building, changing anything."

Elliot echoes his brother's comment, saying, "We're very efficient, but we always find ways to improve. If you can't make tomorrow better than today, you're not going to be here next year." In keeping with this idea, Gershow Recycling is striving to process more and more scrap that it had previously sold to other processors. A case in point: The firm plans to install an aluminum sweat furnace at its Lindenhurst plant to make sows out of its low-grade aluminum scrap—material that it used to ship out. "The more you can do yourself, the more profitable and efficient you can be," Elliot says.

This concept is nothing new to Gershow Recycling, which has a history of handling whatever tasks it can on its own. For one thing, the company is adamant about installing its own equipment. Bertuccio, who is responsible for all installations, notes, "That way, the employees learn everything about the machine before it even operates." And the firm owns generators that supply all of its electricity in Medford and Lindenhurst. These on-site "electric companies," as Sam calls them, generate power for the firm's processing equipment at a more reasonable cost than local utility rates.

Gershow also controls its operating costs and increases its efficiency by adhering to a strict maintenance program. "We spend a lot of money on keeping up our equipment," Bertuccio says. "All the equipment in this place is in great shape. Every machine is serviced on a regular schedule, and you can open up any machine here and see the last service date." The firm, in fact, has an on-site maintenance operation, with five full-time mechanics who do everything from repairing flat tires to rebuilding motors to machining parts for the shredder. And out in the plants, employees are assigned to a particular machine for which they are responsible for daily upkeep. In addition, when work slows down, employees do such projects as repainting and relettering the company's roll-off containers. As Bertuccio notes, "Equipment has a natural tendency to self-destruct, so constant and preventive maintenance is a must. This is just one of the reasons why we're successful."

Going Public

Gershow Recycling is a big fish in the Long Island corporate pond, but its interests are not all business-related. The company is also well-known for its extensive philanthropy in the community. Just take a look around the firm's offices, which are laden with trophies, plaques, and framed articles that honor its support of local groups—Little League teams, the Boy Scouts, hospitals, religious organizations—as well as its community recycling efforts. In one situation, the company donates the fuel oil to heat a local school for a year. In another case, the company lends car hulks to Long Island fire departments, which use them to train firefighters to remove passengers from flaming vehicles. In addition, the company offers a Gershow Recycling Environmental Scholarship to support the recycling activities of school service clubs, civic groups, and individuals.

Gershow Recycling has also become a leading promoter of the scrap industry—and itself—through its aggressive public relations program. "We invest a couple percentage points of our gross revenues in public relations," Sam says. "If every scrap processor would spend as much as we do for public relations, the public would understand what we're all doing." For almost three years, the company has retained a New York City-based public relations firm, which has helped it land articles in the New York Times, New York Newsday, national trade magazines, and numerous local publications. The public relations firm also helps the company publish the two-year-old "Gershow Recycling Report," a newsletter that reviews the firm's activities three times a year for an estimated 2,500 readers. Moreover, last year Gershow Recycling printed a four-color, 12-page brochure to introduce people to the company and explain its recycling services. "We try to document everything we do, and then we try to promote it," Kevin explains. "People who didn't know anything about us now know who we are and think we're doing a good job. People who didn't have a good opinion of us have changed their minds. We've seen that."

As part of these external efforts, Kevin ventures into the community, speaking to chambers of commerce, schools, and civic organizations, appearing on cable television programs, and attending recycling expositions. "I let people know how Gershow plays a very important role in their lives," he says. The firm is also big on corresponding with local political officials, and it frequently invites them to tour its facilities. As Sam notes, "The more people see what we're doing, the better off we are." Kevin, in fact, has a folder full of complimentary letters from government leaders. "When a local official wants to know what's happening in the recycling industry, they call us," he says. "People are coming to us because our name is out there." The company's outgoing approach has paid off on more than the PR front—it now handles most of the scrap metal generated by the island's towns.

Of course, part of what enables the firm to show off its facilities is having facilities worth showing off. All three Gershow plants are hard surfaced and tidy. The Medford facility—the company's showcase plant—also features attractive landscaping, complete with cedar trees, and large signs that proclaim "Recycling—It Happens Here" and "Everyone Talks About Recycling—We Do It!"

Reaping "Big Tomatoes"

While Gershow Recycling has already achieved an enviable level of success, Sam fully expects the company to continue to grow in the coming years. "Within the next decade, we'll probably have another processing facility somewhere," he says, "and our export facility will become bigger. We're always looking into different fields. We'll expand somehow."

No matter how large it becomes, however, the firm does not plan to lose its local focus. "We're not looking to become a big company that people can't talk to," Elliot notes. "We want to be personal. Also, Long Island has provided us with the opportunity to grow, so we want to provide it with the opportunity to grow as well in recycling."

As the Gershowitzes tend to business today, they keep their eyes focused down the road, planning for Gershow Recycling's success in the long haul. As Kevin concludes poetically, "This is a vegetable garden, and if we nurture it, we'll have a lot of vegetables to eat. I'm looking to have some big tomatoes in years to come."