Little Scrap Yard on the Plains

Though Kennie Andersen, founder and chairman of Andersen’s Sales & Salvage Inc., describes his operation as “just a regular little scrap yard out on the plains,” this ferrous and nonferrous processor is actually two businesses coexisting on the same site east of Greeley, Colo.
   Most of the facility is a fairly typical scrap processing plant, complete with a shredder, shear, and various excavators and loaders moving about. But adjacent to this scrap operation, divided by a fence and separate parking facility, is what looks almost like a used car lot, with row after row of old vehicles neatly aligned and grouped by manufacturer.
   Closer inspection, however, reveals that all the cars and trucks are up on welded wheel stands, and few seem likely to ever roll again. This is Andersen’s U-Pull-It, which allows do-it-yourself mechanics and others to search through more than 1,600 old vehicles to find usable parts—from taillights and windshields to transmissions, carburetors, and complete engines.
   And the best part—almost like having your cake and eating it too—is that after the U-Pull-It customers have purchased the usable parts from the old cars and trucks, Andersen’s Sales & Salvage can shred the vehicle bodies for their scrap value.
   This combination of car parts and scrap processing seems like such a natural fit to Dean Andersen, Kennie’s son and the company’s president, that he wonders why more companies haven’t tried it.
   “It seems like auto dismantlers don’t want to mess with scrap and scrap people don’t want to mess with selling car parts,” Dean says. “But we’ve found it’s a very nice overlap. Being able to take the cars, sell the parts, and shred what’s left gives us a little better control over our destiny.”

Surviving Stormy Markets—And Weather
It makes sense that controlling their destiny would appeal to the company’s management—which includes Kennie, Dean, Kennie’s wife Sandy, secretary/treasurer, and Ed Printz, controller—considering how close the firm came to going out of business on at least two occasions.
   Andersen’s Sales & Salvage began in 1959 with one very used pickup truck, a cutting torch, and $260. Eventually, Kennie accumulated roughly 200 car bodies, storing them at his father’s farm. In 1961, his father decided that Kennie needed a place of his own, especially with his first child on the way. That same year—on the same day Dean was born, in fact—Kennie purchased the land that became his salvage operation. And for more than 40 years since, he and Sandy have lived in the small house right next door.
   Growing steadily for its first 20 years, the company initially developed a successful business in parts from late-model cars and soon added a thriving scrap metal trade, encompassing both ferrous and nonferrous, especially aluminum. Sandy kept the company books while Kennie kept the company innovative with new equipment—from forklifts to luggers, alligator shears to car crushers, even a furnace for melting aluminum scrap into 25-pound ingots.
   By buying neighboring farms (there are still neat rows of corn directly across from the rows of old cars), Andersen’s Sales & Salvage grew to its present 38 acres, roughly 14 of which are devoted to the car parts business. The firm’s staff grew as well—from about four employees at the start to more than 15 in 1981 when Andersen’s received a beautification award from the Automotive Recyclers Association for facilities of its size. By the early 1980s, the company was split evenly between its car parts and scrap metal businesses, Kennie notes.
   Then the hard times hit—a two-year stretch in the early 1980s during which Andersen’s Sales & Salvage faced not only a severe economic downturn but also those proverbial twin calamities (amended slightly) of hail and high water.
First, the downturn. When the economy headed south in 1982, Andersen’s Sales & Salvage had about 500 tons of aluminum ingots on hand, Kennie recalls. Certain that any downturn would be short-lived—the market always rebounded within about six months, he knew—Kennie continued to buy aluminum scrap. Only this time the markets didn’t rebound. “We didn’t have a market for 11 months,” he says. “We didn’t sell a pound of ingot.”
   It was the same on the ferrous side, with the company’s biggest customer buying almost no steel from it for nearly nine months. As a result, Andersen’s Sales & Salvage expended savings it had built over 20 years, had to borrow money (something the company tries to avoid during any period, especially one with double-digit interest rates), and in the end was saved only by an unexpected order from a new customer—Atlas Metal & Iron Corp. (Denver), which purchased 100 tons of high-quality aluminum ingots for 31 cents a pound, Kennie recalls.
   Next, the car parts side of the business took a beating—literally. A 40-minute storm hit the facility with 60-mph winds and hail stones as large as an inch-and-a-half in diameter. The hail swept in first from the north, then in a second wave from the south.
   “We just got pummeled,” Kennie says of that 1983 storm. “Every hood, every fender, every piece of chrome in the yard, every taillight, and every grill was devastated. We had to get rid of every car in the yard and start from scratch.”
   To make matters worse, leaves and branches slammed into the office 200 feet away, clogging the gutters and eventually collapsing the ceiling under a buildup of water.
   And that wasn’t the end of the company’s woes. Subsequent storms during that summer of 1983 flooded its yard four times, damaging even the drivetrains of vehicles and making it impossible to enter much of the facility for roughly 20 days. Carp from the neighboring river swam through the facility, Kennie recalls.
   Plus, the company had no insurance to cover these weather-related damages.
   At that point, some businessmen might have changed careers. But Kennie simply changed directions. After losing so much of its late-model inventory, Andersen’s Sales & Salvage drifted away from that car-dismantling niche, exiting completely by 1992. Instead, the company gradually entered the u-pull-it business, which offered considerable advantages.
   Though the parts from late-model vehicles could be sold for much higher prices than older parts, the overhead costs were also greater, especially when a customer returned a $1,000 engine under the generous Andersen’s warranty program, Kennie notes. Besides, the larger body shops and garages were losing interest in even the best recovered parts because they could charge more for installing new parts, he says.
   By contrast, u-pull-it “is a much simpler business to run,” Kennie asserts. Aimed at the smallest garages and people who work on their own cars, u-pull-it is a low-overhead system that charges customers only a fraction of the dealer costs for parts that they locate and retrieve with their own labor and tools (but still with a generous warranty, Kennie notes).
“We don’t pull anything, we don’t inventory it, we don’t rack it, we don’t clean it, we don’t test it,” he says. “We strictly put the car in the yard, and if the customer wants the part, he pulls it.”
   Plus, once the car’s been out in the u-pull-it lot long enough—about four to six months—the firm replaces it with another vehicle and then shreds the hulk.

Growing the Scrap Side
That car shredding finale became possible because, even as Andersen’s Sales & Salvage transformed its car-parts business, it also expanded its scrap operation. The company installed its first big shear, a 500-ton model, in 1986, followed by a second shear of similar capacity in the mid-1990s and a 1,500-hp shredder plus eddy-current separation system in 1995.
   Then, just last year, the company replaced both of its earlier shears with a new 700-ton model that cuts more mate-rial than the other two combined, Dean says. And this summer, the firm replaced its original eddy-current system with a new model that has tripled its ability to recover nonferrous material from shredder residue, Dean states.
   Andersen’s Sales & Salvage also recently added large roll-off containers for commercial accounts—another measure of scrap’s prominent role since the firm used to get by with smaller lugger boxes.
   In the years since the 1983 hail storm, the company’s business mix has shifted from a 50/50 split between scrap and car parts to a much greater emphasis on scrap processing. Today, Andersen’s Sales & Salvage handles some 30,000 tons of ferrous and 1,800 tons of nonferrous scrap annually, with Andersen’s U-Pull-It representing just 10 percent of overall business.
   But the change has been more a case of growing the scrap side of the business rather than shrinking the car parts side, Dean notes. Indeed, while its scrap tonnage has tripled in the past 20 years, Andersen’s has also nearly doubled the number of car bodies on its grounds from some 900 in 1983 to more than 1,600 today.

Family, Faith, and Other Strengths
When Kennie Andersen called his company a little scrap yard on the plains, he wasn’t just being modest. He was also listing one of the firm’s greatest strengths—its location.
   Andersen’s Sales & Salvage is the only major scrap facility with large equipment like a shredder and 700-ton shear in northern Colorado (Greeley is some 50 miles north of Denver). Moreover, Greeley has many blue-collar and agricultural citizens with a keen interest in repairing their own vehicles, which forms a good customer base for Andersen’s U-Pull-It.
  Family unity is another company strength. The decline of the old mom-and-pop scrap operations is an all-too-real trend, Kennie concedes. But he proudly states, “We’re a successful mom-and-pop” and praises his wife Sandy’s diligence, wisdom, and expertise in keeping the company’s books—as well as her efforts to keep him from going overboard when buying large piles of merchandise far from Greeley. Sandy and the Andersens’ daughter Nancy, an interior designer in Frisco, Colo., also remodeled the company’s offices two years ago, creating an especially unique reception area for a scrap operation—some 300 model airplanes and vehicles, most from World War II and all built by Kennie, hang from the ceiling or sit on or in display cases.
   As for Dean, Kennie credits him with being “the heart of the organization” for his many innovations around the facility.
It was Dean, for instance, who recently put down several acres of concrete in the scrap plant and then designed a special
I-beam-and-old-tire “broom” for sweeping the concrete, Kennie notes.
   Dean also designed and installed much of the supporting equipment around the company’s new eddy-current system and created a device for easily draining liquid from containers such as gasoline tanks or beer kegs. (Draining gas tanks is an ongoing part of the company’s scrap and u-pull-it operations, while the beer-keg project was a one-time job for Coors Brewing Co. that netted around 8 million pounds of aluminum.)
   Kennie himself is also a hands-on manager who often personally makes the decision on what cars to buy and whether they should go into the u-pull-it stock or to the shredder. But he stresses that it’s Dean’s presence as the second-generation of Andersens to lead the company that keeps him going. “Without Dean, I’d probably have sold out to some conglomerate,” he says.
   Kennie Andersen also credits one other factor for his success, both professionally and personally—his religious faith. A devout Christian since a 1981 conversion, Kennie says his faith helped him overcome a 20-year drinking problem as well as the “humbling” experiences of 1982 and 1983.
   His conversion also helped him become a better manager, he believes, since he says he used to be “more of a domineering employer, on an ego trip.”
   And it helped clean up the language around the scrap plant. “We don’t like foul language,” he states. “We’ll even politely tell a customer who’s cursing that we don’t speak like that around here.”

With a Western Flair
Andersen’s Sales & Salvage draws its scrap mostly within a 50-to-60-mile radius of Greeley, though it has bought scrap from 500 or more miles away on occasion. Nearly a third of its metal comes from two dozen or so commercial accounts, which often have a heavy rural flavor such as tanks from a fertilizer firm or scrap from a large meat packer, sugar factory, irrigation pipe manufacturer, or the like. Even the peddler trade has a distinctly rural and western flavor. On one recent summer’s day, for instance, a Stetson-wearing pair of scrap collectors drove their pickup onto the truck scale at roughly the same time as a trailerload of live cattle waited in the parking lot while that driver dropped off a bag of aluminum cans.
   Obsolete farm equipment provides a steady stream of metal, as do white goods to a lesser extent. And because a local Greeley firm investigates aircraft accidents for the Federal Aviation Administration within a four- or five-state region around Colorado, Andersen’s Sales & Salvage has also shredded various crashed planes, from small single-engine models up to a 737, Kennie notes.
   Old cars—for shredding or parts—arrive at the firm’s plant individually or in large groups, even on car carriers. Most are towed or hauled in, though a few roll in under their own power. Whether destined straight for the shredder or for a stint in the u-pull-it plant, all the cars first go to the drain shop, where fluids such as gasoline, oil, and antifreeze are collected. Containment systems for oil are also used to prevent storm water runoff problems.
   All these fluids are then recycled in some form, Dean notes. Gasoline is filtered and given to employees as an added benefit of working at the company. Oil is burned in waste heaters to warm the shop on cold days. And recovered antifreeze is sold at a discount to Andersen’s U-Pull-It customers.
   In addition to shredding all old vehicles from the u-pull-it operation, Andersen’s Sales & Salvage shreds light No. 2 steel and batches of aluminum. “That’s the nice thing about a small shredder like this,” Dean says. “You can do batch runs of specialty items. You don’t have to run 10,000 tons through it every time. We can run 1,000 tons a month and make money.”
   For instance, Andersen’s now shreds its non-UBC aluminum scrap rather than melting it into ingots since the cost of propane and other factors made the old furnace no longer economical, Dean says.
   Like all scrap operations in the western United States, Andersen’s Sales & Salvage must cope with far fewer potential consumers than there are in the Midwest or on the East Coast. For instance, there’s only one nearby steel mill—Rocky Mountain Steel Mills (Pueblo, Colo.), to which the company ships as much as 80 percent of its ferrous output. The next nearest mills are hundreds of miles away, Kennie notes. And while the firm has shipped steel as far away as Texas on occasion, the only real solution to the shortage of consumers is to keep enough money in the bank to last through any downturns, he adds.
   On the nonferrous side, Andersen’s primarily ships material to two Denver-based firms—Atlas Metal & Iron (which became a steady customer after that life-saving ingot purchase in 1982) and Iron & Metals Inc.—as well as secondary aluminum smelters in Michigan and Tennessee.
   The company services commercial accounts with its fleet of trucks, while outbound shipments leave on contracted vehicles or the customer’s trucks. Only a small amount of Andersen’s scrap moves by rail, but even that must be trucked to a rail spur roughly a mile away.

The Road Ahead
As Andersen’s Sales & Salvage approaches its 42nd anniversary next year, the company proudly points to its record of keeping good employees. Several of the firm’s 30 employees have been with the company for 20 years or more, plenty are 15-plus-year veterans, and the average employee has been at the company for more than six years, Kennie notes.
   In addition to the Andersens themselves and Ed Printz, other key employees include shredder manager Jeff Slaymaker, drain shop manager Ed Kammerzell, yard foreman Larry Stevens, shop foreman Barry Carter, U-Pull-It manager Max Whipple, shear manager Raul Sandoval, and shipping foreman Johnny Resendez.
   In addition to the free gasoline from Andersen’s U-Pull-It, employees receive a competitive wage, paid health insurance, as well as a 401(k) with company match. In return, Andersen’s enjoys a versatile work force in which nearly everyone can do at least one other job, whether it’s a machine operator who also welds or a company executive who also works the truck scale or counter. Bilingual employees also help the company manage a staff that’s split roughly 50/50 between Spanish and English.
   Looking to the future, Andersen’s sees itself positioned well for whatever may come.
   Proposals to ban hauling car hulks on flatbeds, for instance, are currently being considered in Canada and the United States. Such rules might leave some auto recyclers stuck with car bodies they’ll have to pay someone to remove, Kennie notes. “But it shouldn’t greatly affect us,” he says, thanks to Dean’s foresight in installing the shredder.
   And this fall, the company is diversifying again by entering the new steel business. Andersen’s is currently building a warehouse to handle angles, channels, structural steel, and other products in the market for people who want to buy in quantities smaller than bundles.
   “It’s a natural fit since we already salvage usable steel from our commercial accounts,” says Ed Printz. “So if a customer doesn’t find what he wants in usable steel, we can send them over to the new steel
department.”
   So while the folks who run Andersen’s Sales & Salvage know all too well that the road ahead won’t always be smooth or straight, they do seem firmly in the driver’s seat. •