November/December 1996
With a foundation of exceptional customer service, young management, and aggressive expansion plans, this Portland, Ore.-based processor has designs on being the next big scrap recycling thing in the Pacific Northwest.
By Kent Kiser
Kent Kiser is managing editor of Scrap.
“It’s the most unbelievable scrap yard you’ve ever seen,” says Victor Winkler. He’s referring, of course, to MetroMetals Northwest Inc. (Portland, Ore.), the scrap recycling company he directs as president with partner Steve Zusman, vice president.
And when you visit the company’s facility, you quickly see that Winkler’s not just boasting.
From the street, the place looks nothing like a scrap recycling operation. The entranceway is green, expansive, and well landscaped.
As you enter the facility, you note that every inch is hard-surfaced.
It also strikes you that no processing or handling equipment and no piles of scrap are immediately visible. You soon discover that’s because every machine and every pound of scrap is under cover, sheltered by five massive structures.
As you pull up to the company’s modern offices, you spot a MetroMetals corporate flag flying alongside the Oregon and U.S. flags. You wonder, How many scrap companies have their own flag?
Inside, framed articles tell of the firm’s genesis and how it came to reside in this unbelievable facility. As you read these, you might be greeted by Kelsie, Winkler’s dalmatian who comes to work every day and continually prowls the office in search of food and pats. She’s obviously not your typical scrap yard dog.
But then, as Winkler points out with monumental understatement, “This isn’t your typical scrap yard.”
Typical, no.
Successful, yes.
Since forming in 1991—the product of a merger of two friendly competitors—
MetroMetals has grown exponentially, jumping from 40 to 80 employees and doubling its annual revenue three years in a row—from 1993 to 1995—to bring it up to the $20-million level. This kind of growth earned it the honor of being selected as number 39 of the 100 fastest growing private companies in Portland this year by the Business Journal, a local business publication.
While this growth has been—like the firm’s facility—nothing short of unbelievable, Winkler and Zusman have grand plans for MetroMetals that promise to keep it on a skyrocketing growth path for the foreseeable future.
The Hand of Fate
Everywhere you look at MetroMetals, you see the phrase “a Winkler-Zusman partnership” underneath the company’s name—on its entrance sign, scrap containers, business cards, you name it.
The explanation is simple—the firm is indeed a partnership between Victor Winkler and Steve Zusman, two second-generation scrap recyclers.
The story behind their partnership goes like this: Winkler and Zusman were boyhood friends who worked throughout their youths in their respective family scrap companies—Winkler Scrap Metals Inc., primarily a nonferrous processor founded by Winkler’s late father, Jack, and Zusman Metals Inc., predominantly a ferrous operation established by Zusman’s father, Milt. After college, they roomed together and, though they were competitors, “always kidded around that one day we’d join the companies together,” recalls Winkler.
They weren’t kidding.
They merged their two family scrap businesses in January 1991, and the two firms continued to operate from their separate locations for a couple of years. The two partners eventually felt the need, however, to consolidate their operations into a single plant, so they selected a 51/2-acre site and began designing plans for their new home. Several redesigns later, their enthusiasm was sinking as their budget forecasts were rising.
Enter Fate.
Winkler knew of an idle facility not far from Zusman Metals, an 181/2-acre site that had originally been developed by Riedel Environmental Technologies Inc. as a state-of-the-art, $35-million odorless composting facility for the city of Portland.
Among its many amazing features, the facility had five massive buildings—two measuring 27,000 square feet, two 54,000 square feet, and one 80,000 square feet—offering around 250,000 square feet of covered space and ceilings stretching up to 52 feet high—enough room to operate full-size cranes and dump 40-yard drop boxes or semitrailers.
The site, formerly farmland, was lined with plastic, then topped with 10 inches of cement and 12 inches of asphalt. The operation also had a system to funnel water runoff from the buildings into a 30,000-gallon holding tank, then through a filtration system.
As if that weren’t enough, the facility came with twin 75-foot digital truck scales, aboveground fuel tanks, a closed-circuit camera system for security, and employee locker/shower facilities.
Despite these fantastic features, the composting facility was ill-fated. It opened in 1991 and closed 10 months later in 1992 because of operational problems and complaints about the supposedly nonexistent smell.
The facility then sat idle for two years—until Winkler and Zusman recognized it as a scrap recycler’s dream plant and the perfect next step for their growing company.
Since the facility had attracted scant interest since being offered for sale, Winkler decided to toss out a low bid—just to see what would happen. What happened was the sellers countered and, after further negotiations, MetroMetals found itself the proud owner of the dream facility for the bargain basement price of $1.75 million.
With the purchase complete, MetroMetals set to work making the plant recycling-ready, investing $300,000 in remodeling—redesigning the offices and installing loading docks, an equipment maintenance shop, and a steam-cleaning system—and another $1.5 million in new processing and handling equipment.
After making these improvements, the firm moved into the plant in October 1994 and was on its way.
The Young and the Aggressive
If you ask MetroMetals’ principals to describe themselves, two words pop up frequently: young and aggressive.
By young, they mean young. While the majority of scrap recycling companies are directed by top execs in their 40s (maybe), 50s, and 60s, the oldest managers at MetroMetals—Winkler, Zusman, and Matt Haslett, general manager—are an ancient 37. (The youngest, by the way, is 26.)
Though the firm’s managers are young, they’re not inexperienced, Winkler is quick to point out, noting that many of them have years—in some cases more than a decade—of experience in the business. And that’s not even counting its veteran plant employees and truck drivers, some of whom have served several decades.
And far from being a disadvantage, the company’s youth brings many benefits, say its principals, offering as examples the ample energy and passion they have for their jobs and their body-and-soul commitment to grow the business aggressively. “All of us see ourselves in this business for the next 20 to 30 years,” notes Haslett. “We’re not thinking about taking home a lot of money now. We’re thinking about how best to grow the business, knowing that it will eventually take care of us. We probably pour a larger percentage of our earnings back into growth than many companies.”
This commitment and aggressiveness also translates into a willingness and ability to “have visions and then see them through to fruition,” notes Josh Lohman, one of the firm’s account reps (and, at 32, one of the younger members of its management team). “When we make plans, you can bet they’re going to happen.”
Youth also gives the MetroMetals crew a new school mentality about the scrap business, enabling them to eschew the old, customary ways of conducting business for better and more imaginative approaches, says Lohman. A prime example of this is a new processing venture the firm has forged with two of its competitors, Winkler offers. (More on that venture later.)
Service the Nordstrom Way
If you happen to ask anyone at Metro-Metals about customer service, be prepared to get an earful because service is one topic the company takes seriously. As Zusman, one of the firm’s service fanatics, asserts, “Service, service, and service are our top three priorities around here.”
Returning to the youth factor, Lohman says the company has an updated, new-generation perspective on customer relationships that emphasizes friendlier, above-and-beyond service—sort of like the retailer Nordstrom, he suggests.
What does such service entail?
For its over-the-scale suppliers, Metro-Metals offers competitive, immediate payment, a clean, safe, and efficient facility in which they can deliver scrap quickly and without mishaps (such as flat tires), and covered operations to protect them from the elements during deliveries.
For its industrial accounts, MetroMetals defines service as doing whatever it takes to deliver or pick up a load, ensuring accurate weights and prompt payment, and offering special services. The company, for example, provides lidded containers to suppliers who wish to guard their material from theft or protect it from the elements. The firm also developed a system—affectionately dubbed the Evapomatic—that evaporates water from water-based cutting oils. In this added service, MetroMetals processes such oil free for some of its suppliers, thus saving them disposal costs for the material. “We’re in a partnership with every one of our customers,” Lohman says. “We approach our customers asking, ‘How can we make your business better?’ And we’ve received awards from some of them for helping make their businesses more efficient.”
MetroMetals also makes service a personal issue in that “we like our customers to be friends as much as customers,” Zusman remarks. “My best relationships with customers are the ones in which I’ve gotten to know people on a personal level.” The firm does this, in part, by getting social with its customers, for instance taking them to sports events (most of the MetroMetals managers are avid sports fans, eagerly following “anything with a score,” Lohman says). “We have a good time with our customers,” Zusman states.
The personal touch is also evident in that Winkler and Zusman—the president and vice president, mind you—continue to personally dispatch all trucks to the firm’s industrial suppliers. This unusual practice begins to make sense when you learn that one of the firm’s service mottos is “Big enough to serve, small enough to care.” As Winkler explains, “Every one of our accounts is personal to us. We’ve grown many, many times over and still haven’t lost the personal touch.” And though he concedes that dispatching trucks takes up way too much time and is a duty he and Zusman shouldn’t be doing, it’s a good way to offer personalized service and know firsthand what’s happening at the firm’s industrial accounts, he says.
Though providing such Nordstrom-type service is demanding, the results speak for themselves: The firm has built its supplier base to include more than 1,000 industrial accounts—and still counting—stretching from southern Oregon to northern Washington, and it enjoys a high degree of customer loyalty, Zusman says.
Keeping Ahead of the Environmental Curve
As with service, if you want to talk about environmental issues, the MetroMetals team is only too happy to oblige. And why not? When the firm moved into its new facility, it began life with a clean environmental slate and had the chance to do everything environmentally correct from the get-go.
The company’s environmental procedures begin at the scale, where it imposes strict source control measures, refusing to accept potentially hazardous scrap. All acceptable inbound scrap is processed on concrete and under cover, thus precluding ground contamination and eliminating potential storm water runoff problems. Even the storm water that washes off the firm’s buildings and trucks is collected, stored in a 30,000-gallon holding tank, and filtered to be used to spray-clean its trucks or released into an approved slough.
“We haven’t limited the budget in any way when it comes to environmental aspects,” Haslett says. “If we need a piece of equipment to be environmentally safe in the future, then we buy it because we’d rather prevent problems than have to clean them up. We’re thinking what the problems might be 20 to 30 years ahead and trying to avoid them now.” To help in this regard, he notes, the company retains an environmental consultant on an as-needed basis.
MetroMetals views its environmental features as beneficial to its customers and itself, protecting both from liability while also giving it a competitive edge in the market. “There’s no better place for scrap generators to send their material,” says Dave Grill, an account rep. “We can offer benefits environmentally that other scrap companies just can’t offer.” Winkler concurs, asserting, “We take it to the next level, and we’re able to offer our customers that. That’s something that most companies can’t do.”
Getting Personal
Considering the personal approach Winkler and Zusman take toward their customers, it should come as no surprise that they adopt the same approach with the company’s 80 employees. When they talk about their employees, in fact, you can sense their genuine interest in their well-being and growth. And, to this end, they have implemented programs and incentives to enable their employees to grow personally and professionally along with the company.
In this regard, the company does much more than simply provide competitive wages and a clean workplace that’s protected from the elements. It does more than provide health, dental, and prescription insurance. And it doesn’t simply offer a retirement plan. It actively encourages employees to take maximum advantage of these and other benefits to provide for their future. “So many of our employees have in the past always thought week to week, paycheck to paycheck, and we’re trying to help them look more long term and see the benefits of building a retirement nest egg,” says Lohman. “We’re providing the vehicle for them to make their lives better.”
Another way MetroMetals lends a hand to its employees—while also motivating them—is by offering a variety of financial incentives, including a monthly production incentive that can total up to 15 percent of an employee’s pay. “If the company does well and you’re helping the effort, it’s going to be good for you too,” Zusman states, adding, “We’re not averse to sharing.”
Then there’s the money tree, a safety incentive for the firm’s truck drivers. A framed drawing of a tree hangs between Winkler’s and Zusman’s offices. The tree is adorned with green stickers bearing the names of the company’s drivers. Most of these stickers, which look like ornaments on a Christmas tree, have $500 written under the name. That’s because each driver begins the year with a $500 incentive, and they receive the full amount if they have no deductions throughout the year for safety or performance infractions. Otherwise, they get to keep whatever is left over after the year’s deductions.
And whoever said that wooden coins are worthless obviously hasn’t seen how they’re used at MetroMetals. Supervisors award employees wooden coins for excellent performance, and these coins can be used to buy company merchandise or even a day off.
In addition to these incentives, Metro-Metals believes in giving its employees autonomy in their jobs as well as the chance to progress to higher positions—what Winkler calls a “stair-step system of promotion.” As Lohman explains, “There’s definitely opportunity to improve your lot here. No one is at the top of their pay scale.” And with the company’s ambitious growth plans in the future, its employees will likely enjoy a wide variety of job opportunities.
Such a human resources approach enables MetroMetals to not only attract new high-quality employees, but also retain its existing ones. “We’re trying to create an environment in which people feel good about their jobs,” Lohman observes. “We want to help them feel like this is their company too.” After all, notes Dan Jacobson, CFO, “Our employees are a particular key to our success.”
Being the Best
Though MetroMetals has been growing at hyperspeed in the past few years, it has no intention of slowing down. In fact, its upcoming plans could make its past look like life in the slow lane.
The company’s next big move involves building a greenfield shredding operation on a 10-acre site at the Port of Vancouver, Wash. What makes the venture interesting is that MetroMetals is joining forces with two of its local competitors: Mount Hood Metals Inc. (Portland) and Cliff Koppe Metals Inc. (Vancouver). “We’ve been able to be free-thinking and do what makes sense in our marketplace,” Winkler says.
The shredder will enable MetroMetals to upgrade its No. 2 scrap to No. 1 frag, to increase its volume, and, in essence, to secure its future in the ferrous market, while the joint venture partners will help ensure that the shredder has enough tonnage to keep running, Wink-ler explains. The new operation, which will be built to the same environmental standards as MetroMetals’ Portland plant, is expected to be operating by summer 1997.
Even as the company is charging ahead with this project, it is also planning to install a wire chopper by the end of next year in one of the 54,000-square-foot buildings at its plant. Why a wire chopper? In part because Winkler and Zusman became fed up with having their scrap wire tolled—and then arguing about the returns. They also simply desired to expand their scrap wire purchasing and processing options.
By adding a shredder and wire chopper to its current processing capabilities, MetroMetals will have its ferrous and nonferrous recycling bases covered—and move a step closer to an important goal. “Our goal has been to become more self-sufficient and make a full circle of covering everything ourselves,” Zusman says.
And, believe it or not, MetroMetals’ plans don’t stop there. Winkler and Zusman, for instance, talk about acquiring or establishing a processing operation in Seattle. They even raise the possibility that the company could go public in the future, using the funds for—what else?—further expansion. “We can become as big as we want to be,” Winkler says. “We have young managers who want it, and I believe that the more you want it, the more you’ll get it.” Or, as Jacobson adds, “There’s no limit to what we can do if we just keep doing things right.”
Despite their emphasis on growth, both Winkler and Zusman make a clear distinction between being the biggest and being the best. “Size isn’t the be-all and end-all,” Zusman says. “We’re not incredibly concerned about not being the biggest. We just try to make ourselves the best. And I think if you’re the best, everything else takes care of itself.” •