Happy Accidents

March/April 2012

Ever since unexpected circumstances led him into the scrap business 46 years ago, Gerry Stewart has been making an impact on the nonferrous and stainless sectors.

By Jim Fowler

Many job-seekers have heard the adage “It’s not what you know; it’s who you know that counts.” That has certainly been true for Gerry Stewart, who retired as vice president of ELG Metals (McKeesport, Pa.) in December. Beginning with his first job in the industry and continuing through a 46-year career, Stewart’s relationships with other professionals in the tight-knit scrap industry have been instrumental in defining his career path and his success, he says.

Growing up in southeastern Missouri, Stewart says he was always aware of the local scrapyard and its workers, who came around to pick up scrap metal. That was the extent of his contact with the industry throughout his first quarter-century, a period in which he graduated from high school; enlisted in the U.S. Air Force; received training as a Chinese linguist and served four years in Washington, D.C., and Taiwan; and attended Southern Connecticut State College and New Haven College, both in New Haven, Conn. Stewart aspired to be an electrical engineer, but by the mid-1960s he had a wife and young son to support, so he left college and began working for a chemical company in North Haven, Conn.

In 1966, Stewart and his family moved into a new home in Guilford, Conn. Three days later, another young couple bought the house across the street. The two couples became fast friends. The new neighbor soon interviewed for a controller’s position with Joel Schiavone, a local businessman who owned a chain of nightclubs called Your Father’s Mustache. Though Stewart’s neighbor didn’t get that job, Joel Schiavone liked him enough to recommend him to his father, Joe Schiavone—owner of Michael Schiavone & Sons (New Haven, Conn.), a prominent New England scrap company—who hired him.

After he began working for M. Schiavone & Sons, Stewart’s neighbor heard that the company was looking for a new road buyer. “He [says], ‘I’ve got just the guy for you,’ and he arranged an interview for me with Joe Schiavone,” Stewart says. He recalls having a preconceived notion of what the interview would be like: “My expectations were that I’d be climbing over junk cars, and there’d be some guy there in a sleeveless T-shirt and a big cigar.” Instead, the interview took place in the men’s grill of the New Haven Country Club “with an immaculately dressed Joseph Schiavone, who was also an attorney,” Stewart says. And the setting wasn’t the only surprise. “It wasn’t like a job interview at all. The conversation was so far afield. We talked about books we had each read and places we would like to visit.”

When the two men returned to the scrapyard office, Schiavone introduced Stewart to Rod White, who was head of the nonferrous department. “After about three minutes with me, White called Joe and said, ‘I’m going to hire this guy,’” Stewart says. “Suddenly, I was in the scrap business. It was one of those quirky accidents.”

Learning on the Job

Stewart’s start in the scrap industry had a steep learning curve, sometimes made steeper by colleagues eager to have a little fun at the new guy’s expense. His first day on the job was typical for a rookie, he says: He was told to go out and inventory the railroad scrap. “I had no idea what they were talking about, so I had to have someone show me what railroad scrap was,” he says. “[It was] November, [the ground] was wet and muddy, and it was difficult to walk around. I had mud up to my knees. They all had a good laugh.”

After a few weeks working in the scalehouse, Stewart moved to the nonferrous department, where he spent part of his time in the sorting room. “There were a couple of old Italian fellows there who couldn’t or wouldn’t speak English,” he says. “So I would speak to them in English, and they would always answer me [in] Italian.”

When they did speak English, they, too, joined in the fun. “One day they were sorting aluminum flashings, and I asked what grade it was. One of them told me it was 75 S aluminum. I asked how he knew. He responded, ‘because it smells like garlic.’ So he hands it to me and tells me to smell the garlic. What did I know? I start sniffing it, and they’re laughing like crazy. I’ll never forget it because it was so embarrassing.”

Stewart quickly caught on, however, and after just 18 months on the job he had the opportunity to lead the nonferrous department. This was another happy accident, he says: His two bosses in the department had abruptly left the company, and “Mr. Schiavone called on a day when all the other nonferrous buyers were on the road. I was the only one in the office, and suddenly I was in charge,” Stewart says. “It was exciting”—but also overwhelming. “I immediately decided to spend the weekend in the library reading up on the scrap industry.” Imagine his surprise when he discovered “there weren’t any books on the recycling industry,” he says. Instead, “I just learned as I went along,” picking up expertise in the company’s main niche, selling red metals to brass mills and copper refineries.

Much of that learning took place at the feet of experienced professionals who took the time to show an interest in Stewart. One such mentor was Bill Schmiedel Sr., then second-in-command at M. Schiavone. “He explained, ‘I’m not going to teach you accounting, but I’m going to teach you how to buy and sell,’” Stewart says. “I started to get a feel for it. Being on that side of the desk, buying and selling, I’ve always thought I was in a partnership with my suppliers and consumers.” He also recalls attending a three-day advanced metals seminar at the University of Chicago in 1968 presented by the National Association of Secondary Material Industries, an ReMA predecessor. At the seminar he had the opportunity to learn from “deans” of the industry who were experienced, humorous, and impressive, he says, such as Sidney Danziger, then working in New York for Alloys and Chemicals Corp. (Cleveland).

Eventually Stewart became a vice president of the company along with Joe’s sons, Joel and Michael Schiavone, and Lyman Potter, who was responsible for stainless and alloys. His pride in his new position led to one of the “biggest mistakes” in his career, however. “I took my promotion very seriously and wanted everyone to know that,” he explains. So he sent “a typewritten memo to virtually everyone in the company saying I’m the vice president of the nonferrous division, and the buck stops here.” In retrospect, “I guess I got a little full of myself,” he says. But he learned an important rule about family businesses: “Family comes first.”

The fallout from the memo soon culminated in Stewart’s dismissal from the company. “I don’t remember what we were talking about at the time, but I commented to Joel, ‘Well, maybe I should just clean out my desk.’ His response: ‘Sounds like a good idea.’ So I did,” Stewart says with a laugh.

Steps on the Way to Stainless

Stewart saw the dismissal from M. Schiavone as “just another opportunity,” he says, and he went to work for Gerald Metals (New York) in its Waterbury, Conn., office in 1972. If “M. Schiavone was the school of the scrap business,” Stewart says, “Gerald Metals was the graduate course.” There he worked for Gerald Lennard, whom he calls “a very sharp individual,” and he built more lasting relationships that served him well over the years, he says. “I was a copper buyer and worked with Dick Zampiello, another bright guy, who managed the operation,” Stewart says. “Warren Gelman, who had been a buyer at Cerro Copper [East St. Louis, Ill.] when I was one of his suppliers at M. Schiavone, was in the office next door. We became lifelong friends.” Both men went on to long careers in the industry.

Stewart has a few tales from his days at Gerald Metals. He remembers working for several days on the bid for the annual copper contract of Long Island Lighting, the electric utility for Long Island, N.Y. On the day the bid was due, he realized the bid request for the utility’s annual aluminum contract was attached to the one for the copper contract. Quickly, he “grabbed American Metal Market, looked up some numbers, and put in a price,” he says. “Although we lost the copper bid, we got the aluminum contract. There were aluminum lamp posts and guard rails all over the place.”

After two and a half years, Stewart left to become a partner with Mark Infield at Marmet, a brokerage in Westport, Conn. He soon realized the arrangement “just wasn’t working, so after three and a half months, we parted friends,” he says. Soon after leaving Marmet, Stewart heard that Albert Wein, president of Steelmet (Pittsburgh), was looking for a trader who had a following in New England. He went to Pittsburgh for an interview and got the job, starting at Steelmet in January 1976. “What made it so interesting was [that] I didn’t know anything about stainless,” Stewart says. “I was a copper, brass, and aluminum guy. Wein’s feeling was, nonferrous guys always make the best stainless traders. I think he said that because he, too, started as a nonferrous guy.”

Stainless Days

Steelmet’s office was in the Grant Building in downtown Pittsburgh, but Stewart was supposed to spend his first few weeks on the job at the plant in nearby McKeesport. Circumstances intervened, however: The stainless market was heating up, and the convention of the Institute of Scrap Iron and Steel (another ReMA predecessor) was coming up in Florida. “Everyone [else] went to the convention, and I was alone in the office handling the telephone,” Stewart says. “Each afternoon, Jack Forebaugh, my boss, would call to see how things were going. I’d tell him, ‘I bought this,’ or, ‘I bought that,’ and his only comment was, ‘OK.’ I didn’t know if that was good or bad. I never did get to spend those two weeks at the plant; there never seemed to be time.”

Again, as the rookie, Stewart had to prove himself. When he got his first list of sales contacts, for example, “I soon learned that these were people others had had trouble with. Initially that didn’t work out too well.” But he persevered. “A few of the guys on that list became good suppliers and, more than that, they became good friends,” he says. “Looking back, I’ve always considered the people I do business with friends more than business associates. It’s made the job so much easier.”

As Stewart’s career progressed, Steelmet decided to expand its Brooklyn yard, and Stewart volunteered to manage it. This, too, initially posed a challenge. “About four days into the job, I had a wildcat strike,” he says. It started because “we were going to load a barge and only had an old cable crane [with which to load it]. I went across the river to Newark to make arrangements with a company to rent one of its big front-end loaders.” The company agreed to rent out the loader, but “their guy had to be the operator. With this, my guys go on strike” to protest the loss of work. The strike came to a quick end, though, when the striking workers realized they and the loader operator were all members of the same union. “I pointed out that they were striking against themselves,” Stewart says. “That settled the strike. Besides, none of my guys could operate that piece of equipment, anyway.”

Though managing the Brooklyn yard was “another great experience,” after about six months Stewart saw an even better opportunity: managing all of Steelmet’s nonferrous operations, which included yards in Baltimore, Miami, and Providence, R.I. With his nonferrous background, he easily won the position, moving back to Pittsburgh in the spring of 1980.

Reflecting on his years at Steelmet, one thing that stands out, Stewart says, is his work in India. His first trip there came about when the company won a contract to ship 1,400 mt of stainless scrap to an Indian government agency that supplied the material to end users. The plan was for Stewart to travel to Calcutta to meet the government officials and end users along with Alan Amper, Steelmet’s chairman. On a layover in London, Amper became ill and had to return to Pittsburgh, leaving Stewart to continue on to India alone. It was another unforeseen circumstance that led to a career-building and personally satisfying experience, he says. “I met a lot of nice people and got along very well with them.”

On later trips, Stewart realized that “a lot of end users wanted to deal directly with a supplier rather than go through the Indian traders and brokers, so we subsequently opened an office in Delhi.” Doing so required a quick title change, he notes: “An officer of the company was required to sign all of the documents, so I made myself president of ‘Steelmet India’ and completed the paperwork.”

On his travels to India, Stewart became good friends with one of the stainless steel end users. Years later, that man’s youngest son applied to universities in the United States and was accepted at three of them. “They sent him to Duquesne University in Pittsburgh because I was living here,” Stewart says. “He spent a good deal of his time at our home because of the friendship I had developed with his family.” That family reciprocated that hospitality, he says. “I happened to be in India over Diwali,” the country’s biggest holiday, “which is their Fourth of July and New Year’s Eve all rolled into one,” he says. “I was invited to their home on the first night of Diwali, which traditionally is for family only. I was the only outsider there. It was quite an honor.”

Although Stewart felt his career was going quite well at Steelmet, the company experienced financial difficulty in 1983 and declared Chapter 11 bankruptcy. After a month or so, Stewart left and formed a brokerage partnership with John DePetro of Diversified Metals Corp. (Pittsburgh). “Our timing couldn’t have been worse,” Stewart says. “The market was terrible. In 1984, you had trouble giving metal away.” At the end of the year, Stewart and DePetro parted ways, and Stewart worked for a while with Jack Richman of I. Richman & Co. (Washington, Pa.).

In 1985, ELG Haniel Metals (Duisburg, Germany) bought Steelmet out of bankruptcy and invited Stewart to return. “Fritz Teroerde, a very dynamic individual, was going to run the operation, and we hit it off immediately,” Stewart says. “I decided to come back, and I’ve been here ever since.” He never expected his first job with M. Schiavone & Sons to turn into a lifelong scrap career, “but I just felt very comfortable working in the scrap industry,” he says. “Again, it was the people.”

Looking Back and Ahead

Thinking about the changes he’s seen across his years in the scrap industry, Stewart names the development of the hand-held metal analyzer one of the biggest. “I remember in my early days at M. Schiavone, there was always someone coming around with a black box to test metal,” he says. “Most of the time it would only work when the guy that had the box was demonstrating it. … It still boggles the mind that you can take a piece of metal, put one of these ‘guns’ on it, and it tells you what it is. It’s almost like smelling the garlic on 75 S aluminum.”

The biggest drawback of these tools, he notes, is “they’re only as good as the person operating them. There is still a margin of error, and we see it from time to time” in flawed results from improper testing.

Stewart also points out significant changes in the domestic stainless scrap markets. “Early on, Pittsburgh was the stainless market,” he says. “With maybe three exceptions, all of the stainless mills were here—this was the center of the universe for stainless.” North American Stainless’ mill in Ghent, Ky., and ThyssenKrupp Stainless USA’s mill in Mount Vernon, Ala., “have changed the dynamics and the consumption areas greatly,” he says. “While all the stainless scrap previously flowed to Pittsburgh, now the majority flows out of this area.” The Chicago area now generates more stainless scrap than Pittsburgh does, he adds.

Of course, he’s seen generational change as well. “I remember going into the conference room at Steelmet and sitting there looking at all of these lions of industry,” he says. “They were all so much older than me. Then one day, I remember sitting in the conference room, looking around, [and realizing] I’m the oldest guy in the room. I’m not sure when that happened, but it happened.”

Over the course of his career, what he has enjoyed most, he says, is the day-to-day dealings with people, developing relationships, and the constant change. “I call it the romance of the scrap industry,” he says. “You talk to some guy for years on end, and one day he’ll call you about something you’ve never heard of, or [he’ll] ask how to use something that sounds virtually impossible. The learning curve never ends. It’s been 46 years, and the next call may be another one of those instances. There’s a new alloy; there’s a new application; there’s a new kid on the block.”

The least pleasant part of the job, on the other hand, has always been rejections—especially when he’s had to inform the scrap supplier that a load has been rejected. “I’ve had some really nasty things said to me over the years, but my attitude has always been, you shipped it—I’m just reporting it.”

Stewart encourages anyone considering a scrap career to give it serious consideration. “I think it offers a tremendous opportunity,” he says enthusiastically. “It’s a viable, important, and necessary business. When you think of all of the people who spent time developing this industry, you realize what a rich history it has.” Stainless steel in particular has a bright future, in his estimation. “If we do indeed start moving away from fossil fuels and rely more heavily on nuclear power, that means more and more demand for stainless and alloy. Prices will fluctuate and supply sources will change, but it’s never going to stop growing.”

Jim Fowler is retired publisher and editorial director of Scrap.

Gerry’s Journey

Born: April 19, 1941, in Bonne Terre, Mo. Bonne Terre—which means good earth—is in the middle of the lead belt in southeastern Missouri. “I’ve always had metals in my blood,” Stewart jokes.

Education: Attended Southern Connecticut State College and New Haven College, both located in New Haven, Conn.

Military Service: Enlisted in the U.S. Air Force in 1959, after graduating from high school. Attended language school at Yale University (New Haven, Conn.), where he studied the Mandarin dialect of Chinese and became a Chinese linguist. Served at the National Security Agency (Fort Meade, Md.) and in Taiwan. Discharged as an Airman First Class in 1964.

Family: Married Camille Laudano in 1961. Two children, Gerald Jr. and Paul. Married Paulette Vereb in 1982. Two stepsons, Jeff and Wesley. Four grandchildren.

Career:  Joined Michael Schiavone & Sons (New Haven, Conn.) in 1966, eventually becoming a company vice president. Joined Gerald Metals (New York) as a copper buyer in 1972. Moved to Steelmet (McKeesport, Pa.) in January 1976, where he worked as a stainless trader, manager of the company’s Brooklyn scrapyard, and then manager of nonferrous operations. Left the company in 1983, after it declared bankruptcy, and returned in 1985 after its purchase by ELG Haniel Metals (Duisburg, Germany).

Personal Influences: Joseph Schiavone and Bill Schmiedel Sr. of Michael Schiavone & Sons; Gerald Lennard and Dick Zampiello of Gerald Metals.

Association Involvement: Served on the executive board of ISRI’s Pittsburgh Chapter from 1986 to 2006.

Community and Philanthropic Service: Served for two years on the curriculum committee of the Associates Program at the University of Pittsburgh (now Katz) Graduate School of Business.

Hobbies: Golf, playing the guitar, and traveling.

Honors: Received the first Lifetime Achievement Award presented by the Pittsburgh Chapter of ReMA in 2011.