January/February 1988
Richard Abrams’s 22 years in the scrap business have yielded a cautious though aggressive industry leader. Here’s what to watch for in his two-year ReMA presidential term: practical thinking, strategic steering, and high-energy implementation of plans … plus concentration on making members of the unified ReMA forget they were ever part of separate associations.
—By Gerry Spruell
Gerry Spruell is editor of Scrap Processing and Recycling.
The man makes his point. Leading a reporter between towering scrap piles and up several stairs to the controls of a guillotine shear, he waits for the gee-whiz reaction so common to first-time scrap plant visitors, then vocalizes what he believes surely must be on her mind by now: "The scrap industry is an extremely important one, performing an essential service to our communities ... to our country. Without us, where would people take these things? Where would these things go?"
The obvious answer is the sidewalks and streets or the almost packed-to-the-brim landfills. And, with two simple questions along one complete scrap plant tour, Richard Abrams has scratched the surface of the major issues facing the industry today, issues he plans to address during his two-year term as ReMA president.
They are issues Abrams's grandfather had no need to consider when he came to Harrisburg, Pennsylvania, and began in business as a peddler 84 years ago. They are issues that Abrams's father also did not face when he joined the business in 1926. Even when, fresh out of the Wharton School in 1966, Richard Abrams started full-time at B. Abrams & Sons Inc., the medium-size, family-owned and -operated business was without the headaches now common to his business--and the businesses of most other scrap processors.
They are headaches that have caused Abrams, now president of the firm, to reconsider whether he'll encourage his two young sons to come into the business. Ten years ago he would have encouraged them with only minor reservations, but six or seven years ago everything changed: Uncertainty reared its head in the industry. With the dramatically sagging profits, says Abrams, 1982 brought back memories to people who went through the 1930s depression. "Many of them said the early '80s were worse." Of course, that difficult period for scrap processors, ended in 1987, when scrap prices turned around, at least for the short run. But, Abrams says, "I don't think there's anyone in our business who's naive enough to believe that we can't experience another 1982, and that it couldn't come in the relatively near future."
With the price drops in the early '80s came the introduction of environmental issues, issues which steadily grew into the biggest concern of scrap processors and recyclers today. "I still feel that there's a good future for the scrap industry in this country," Abrams says. "There's always going to be a need for scrap, and our industry is in an excellent position to fill that need. But one of the challenges we face in the next 10 years is to try and minimize the uncertainty, to cushion our businesses from the effects of uncertainties."
To kick off the cushioning process, Abrams will place special emphasis on ReMA's planning committee. It will be a blue-ribbon committee, charged with developing a long-range strategic plan, a mission for the association. Abrams wants the committee to determine the function of the association, where it should go to serve its members, how it should get there, and how it should deal with industry problems.
Today the industry's … ReMA's … Abrams's most critical problem, he says, is, without a doubt, Superfund. "It has the potential to do us enormous damage. I don't think we know at this point just how deep or widespread that damage will be; but we do know that there's a demand from our members- to do something about it, and we're in the process of working on a plan." Part of the plan, he says, involves the ReMA Board meeting in Washington, April 13-15. "We're going to be in close proximity to the Congress, and we're going to make use of that. We want to use that time to our best advantage to try and get some Superfund relief."
While Superfund holds the potential to instantly close any scrap operation in the U.S.--because of the legal, not practical or legitimate, assumptions Superfund contains--much state legislation being proposed and passed coast to coast threatens scrap dealers with slower suffering for their businesses. Dealing with such legislation--resource recovery programs, for example--is another top priority for Abrams during his presidential term.
"We in the scrap industry have two concerns. First of all, the items pulled out of the solid waste stream [as a result of mandatory recycling and other resource recovery efforts] are going to flood the markets for those materials, and that will drive the price to a point where it may no longer be economical for us or anyone else to handle the items. The bigger problem is the risk of having such separated materials displace materials that we're handling as part of our operations, with little or no growth in overall recycling."
In addressing these concerns, Abrams says the ReMA policy on recycling solid waste, the policy passed at the October 1987 Board meeting, is a start. "It gives our members guidance in going out and dealing with their state legislators and regulatory authorities who are either considering legislation or adopting regulations for solid waste. Every state is going to be different, but the policy provides guidelines useful to our members. Another thing the policy does is give our national office staff the authority to help draft legislative amendments to proposed legislation and regulations that fall within the policy guidelines. I have some questions about whether the policy is strong enough in certain areas, but I still think it's a good start."
So, with policy in hand, should ReMA members begin knocking on state and local authorities' doors? The ideal, Abrams answers, is for members to meet these people in a positive way first. "Starting with your local government-city council, council of supervisors, whatever government you have in your community--you should let your representatives know who you are and develop a positive feeling about who you are. You don't want to come to their attention for the first time in a negative way.
"Show them support," Abrams says, as he often said during his five years as ISIS Environment and Legislative Committee chair. "I always talked about this. … I've always felt that we will not be totally effective in the political arena, particularly at the state and local level, until our members become involved at the grass roots in a positive way with the people who make the laws. We have to have a positive influence on what affects us, and one way to start doing that is to get involved."
The next step Abrams suggests taking is to invite your local, city, and state legislators to your plant. "Do this before things go wrong; bring your legislators into your facility and show them what you do. They really don't know anything more, otherwise, than what they see of your facility from the street. I have never had any person come through my plant who was not involved in our business who didn't say, 'I had no idea what you were doing here; I'm amazed at some of the things you do; I had no idea you were doing so much.'"
Showing your legislators your operations, Abrams says, provides them with a vivid look at your considerable contribution to the community. And talking with them during the tour about some of your problems sets the stage for approaching them later with suggested changes to proposed legislation. "They know who you are when you walk into a hearing. It's a lot easier for you to get your message across when the chairman or some members of the committee have met you before and have an understanding of your problems."
In addition to inviting legislators to your facility, Abrams says, you can join state and local business support groups to influence your government leaders. Abrams, for example, is a member of the Board of Directors of Pennsylvanians for Effective Government. This nonpartisan organization is devoted to the election of state legislators sympathetic to business and to the education of legislators on business-related issues.
While Abrams believes "we need more work" on the perception that state and local governments have of the scrap industry, he feels good about how the industry is perceived by federal government agencies. "I think EPA [the Environmental Protection Agency] has a positive perception of us. I also believe that they're aware of our problems.
"OSHA [the Occupational Safety and Health Administration] should have a good perception of our industry; they certainly should have a good one of our association. We were among the first associations to start a safety program, to get a fulltime staff person involved in safety, and to develop a model safety manual for our members. When the Right-to-Know came out, we devised a program for our members. When we thought our members were going to have to generate MSDSs [material safety data sheets], we spent a great deal of staff time developing generic MSDSs so our members would have a means to respond to the regulations. So OSHA, EPA, and other government agencies, such as the Department of Commerce, that know us should have a very positive perception of us. But we need to work on our relationships with them as an ongoing process."
Abrams admits that the perception of the industry by the general public is a problem, one that's plagued the industry for years. "The environmentalists like us; we make a tremendous contribution to cleaning up the environment, and they know that. Members of the general public, on the other hand, don't know what we do, or how much we do, or how great an asset we are to this country. And that's something else we have to work on."
Work, work, work, work, work, work, work. How will ReMA get it all done?
"What we need to do is get more of our members involved in the association," Abrams answers. "The chapter structure and the national committee structure of the new association encourage membership involvement, and we're counting on that involvement to address all the industry issues we're facing." One of Abrams's tasks as ReMA president, he says, is to sell the new association to members throughout the country and to try to get more of them involved in the committee structure ... "more involved at the chapter level, beginning in their home states, where their businesses are located, and more involved at the national level."
Selling the new association to members who were satisfied with the separate ISIS and NARI associations may be quite a job for Abrams, but he insists it's doable. "I want to see us as one organization in which everybody is pulling together and trying to achieve the same goals, one association with members who remember what ISIS and NARI accomplished, but who've pretty much forgotten that ISIS and NARI were two separate associations. That's how I'd like to see us by the end of my two years."
The benefit of pulling together as one organization, Abrams believes, is obvious. "Membership in ReMA is one of the most valuable assets that any of us in the scrap business has. There's no way that even our largest member could ever accomplish alone what we can accomplish as a nationwide association of 1,800 members."
With ReMA so much bigger than either of the associations from which it was formed, growing pains--merging pains--were inevitable. "But," says Abrams, "I think we're working through them pretty well." He emphasizes that the ReMA chapter structure is the main means of continuing the melding of the two old associations into one. "Former ISIS members are familiar with the chapter structure; former NARI members are not. So, former NARI members must become part of this structure; that's really important for it to be effective. There will be former NARI members on chapter executive committees and serving as chapter officers, and I hope that will happen rather quickly. I want our members to understand at the outset that we are going to represent, to the best of our ability, everyone in our association."
Included in these representation efforts, Abrams says, will be ReMA programs and services beneficial to all members. All commodities, he says, will be represented. "There is a stipulation in our merger agreement that the actions we take must benefit, or at least not be detrimental to, the best interests of the majority of our members. That rule, of course, will serve as our primary guideline. But, aside from that, we're going to attempt to provide as many services as we can in a cost-effective manner to our entire membership."
He says he'll remain open to suggestions for services. "If people active in the association think we need another committee, for example, to represent a certain interest, and they can make a good case for it, I certainly would support it. The same thing goes for programs. We're going to spend our funds on providing services for our members; we're going to respond to their needs."
Between the active participation he anticipates from members and the unification success he expects, Abrams believes ReMA is poised to deal with not only the current industry issues it faces, but issues that surface in the future. The merged association's size and strategic planning, he believes, also should be quite instrumental.
"By merging NARI and ISIS, we really broadened our base. We have members involved in so many different things now, and that certainly gives us the ability to generate more credibility with government agencies. Now when we go out and talk with government about recycling, we speak for the entire industry--ferrous and nonferrous scrap processors, processors of paper, textiles, glass, plastics, and other nonmetallic scrap products, and many consumers as well.
"This gives us a tremendous advantage in dealing with the problems we face, because we speak for so many more people than either of the two former associations ever did. I don't think we've even begun to explore some of the things we can do with that additional strength."
Pricing Info: Cadmium is not traded on the LME or Nymex, and there is no published producer quotation. For a price reference, the U.S. Geological Survey looks to Platt’s Metals Week’s New York dealer price.
In 1996, cadmium’s monthly price averages ranged from a high of $1.90 a pound in January to monthly lows of 80 cents a pound in November and December, ending with an annual average of $1.24 a pound. The metal has continued its price downtrend in 1997, averaging 61 cents a pound through midyear.
Richard Abrams's 22 years in the scrap business have yielded a cautious though aggressive industry leader. Here's what to watch for in his two-year ReMA presidential term: practical thinking, strategic steering, and high-energy implementation of plans plus concentration on making members of the unified ReMA forget they were ever part of separate associations.