September/October 2004
Brothers Stuart and Seymour Padnos have set the standard for excellence through their successful family scrap firm, their service to industry associations, and their dedication to their communities.
By Si Wakesberg
They have been called scrap industry leaders, pioneers, and innovators. They have helped build their father’s small scrap business into a thriving third-generation family company of nearly 400 employees at a dozen locations. They have supported their communities and served the scrap industry’s associations at the highest levels. For all of this and more, they recently received the first two Lifetime Achievement Awards given by ISRI.
They are brothers Seymour and Stuart Padnos of Louis Padnos Iron & Metal Co. Inc. (Holland, Mich.), and the above distinctions are the natural result of their 116 years of combined experience in and service to the scrap recycling industry. That experience and service dates back to 1946 when the Padnos brothers began working full-time at their family’s scrap business. But the beginning of their success story really traces back to their father, Louis Padnos, founder of the company.
In the late 1890s, then-13-year-old Louis Padnos left Czarist Russia and walked alone across Europe to the port of Rotterdam in the Netherlands, from which he sailed to New York. There, railroad agents looking for workers gave him a ticket to the West, so Louis headed westward. He worked on the railroad for a while, learned to speak English (previously he spoke Russian and Yiddish and read Hebrew), and traveled what was then uncharted immigrant territory in the United States—places such as Cedar Rapids, Iowa; Kansas City, Mo.; and the Dakotas, where he peddled to the Indians.
In 1905, his travels brought him to Holland, Mich., where he founded Louis Padnos Iron & Metal Co. True to its name, Holland was a small town of Dutch heritage with a strong work ethic. Building a scrap business there was no easy feat, but Louis had a self-sufficient character and the ability to maximize any opportunity available to him—traits he passed on to his two sons.
Seymour and Stuart grew up in the scrapyard—literally—since their family’s home was immediately adjacent to Louis’s small plant. “It was our playground,” Stuart says, recalling how he and Seymour used to do “all sorts of odds jobs” in the yard. In particular, he remembers dismantling old phones to recover the tiny platinum points inside.
The Padnos brothers were educated through the Holland public school system. Seymour even graduated from Hope College in his hometown, while Stuart enrolled at the University of Michigan in Ann Arbor. Seymour earned his bachelor of arts degree before his military duty in World War II, while Stuart’s college education was interrupted by the war. Both signed up for the Enlisted Reserve Corps, with Seymour serving stateside as an airplane dispatcher in the Army Air Corps and Stuart seeing active duty in Europe, including a six-month period as a prisoner of war in Germany.
After the war, Stuart—who weighed 100 pounds when the Russians liberated his stalag—returned to the States and spent months recovering in a Florida hospital. Upon his discharge, he completed his college degree in economics, then joined Seymour working full-time in the family scrap business.
In those early years, the Padnos brothers shared an office, but they had distinctly different responsibilities within the company. Seymour handled the day-to-day administrative work plus the firm’s nonferrous business and ferrous sales to brokers. Stuart focused on operational issues—especially equipment and technology—as well as the company’s scrap paper activities and ferrous sales to foundries.
Before Stuart took over operations, the company’s only piece of equipment was a used truck crane, purchased in 1940. The firm’s next step toward mechanization came in 1951 when it bought its first new crane. This was followed by a small shredder in 1970, a motor block breaker in 1974, a hot briquetter in 1976, and many other pieces of equipment since then. No wonder the current Padnos headquarters facility in Holland, located on Lake Macatawa, is regarded as one of the finest processing operations in the industry. It is a model of automation in its use of shredders, balers, briquetters, and other state-of-the-art equipment.
Beyond its flagship Holland operation, the company has grown into “a sizable company,” Seymour says, with 12 locations throughout western Michigan. From its small-town roots and current regional base, the firm has established a high-volume business with a domestic and international reputation. These days, ferrous scrap accounts for about 40 percent of the company’s business, with nonferrous taking up 30 percent and scrap paper the remaining 30 percent.
Leading the Industry
Just as they served different leadership roles in their company, the Padnos brothers pursued leadership roles in different scrap industry associations, with Seymour being active in the Institute of Scrap Iron and Steel (ISIS) and Stuart serving the National Association of Recycling Industries (NARI). Both became important movers and shakers in their respective organizations.
Within ISIS, Seymour was chairman of both the ferrous committee and the foreign trade committee. He also served as vice president of the ferrous division of the Bureau of International Recycling, the Brussels, Belgium-based international recycling association.
For his part, Stuart served as a NARI director, a national NARI vice president for six years, and—ultimately—NARI president from 1982 to 1984. At that time, the scrap business was suffering through the worst economic recession in more than five decades. Through it all, Stuart helped the industry—as well as his family’s company—look ahead and prepare for its future success. In his convention speech of 1983, he offered recyclers a vision of the future, outlining the important factors and trends going forward—many of which have either come to pass or are just as viable today. Stuart’s points included:
- the need for more advanced information systems to keep up with volatile market conditions;
- the need for more sophistication in the marketing of scrap commodities;
- the use of the most modern and efficient equipment;
- the growing role of nonfamily professionals in family scrap businesses;
- the need to abide by prudent and conservative financial planning;
- a greater emphasis on more cost-effective ways to ship scrap commodities; and
- the importance of producing the highest-quality raw materials possible.
At the end of his term in 1984, when the industry was finally emerging from its dark economic days, Stuart remind-ed his scrap counterparts that “the economic stresses forced us all to implement new disciplines in managing our operations. The tough experiences we went through better prepared us for making the most of today’s and tomorrow’s business opportunities.”
To this day, Seymour and Stuart are strong supporters of industry trade organizations, particularly ISRI. “A trade association is important,” Stuart asserts, “because it develops industry standards, provides legislative advice, and funnels market information to its members.” Seymour concurs, adding that an association “provides a uniform front and acts as spokesman for the industry. It is definitely a positive service.”
Many Years, Many Changes
The economic recession of the early 1980s was only one challenge the Padnos brothers have faced in their decades-long careers. After all, they have lived through every up and down the scrap industry has encountered since the mid-1940s. For instance, they saw the development of ever-stricter environmental regulations on the local, state, and federal levels, some of which were “earth-shocking” to the scrap industry, Seymour remarks.
The Padnos brothers also saw the introduction of equipment and technology that “revolutionized” the business, such as automobile shredders, mobile shear attachments, eddy currents and other metal separators, metal analyzers, and—last but not least—computers. Today, Seymour remarks, most scrap processors “couldn’t run a business without computers.” On the consuming side, the advent of the steel minimill based on the electric-arc furnace created a better market for scrap, he points out.
As for larger trends, Seymour and Stuart point to the increasing globalization of the scrap trade. Though scrap has always been traded internationally, the export business has changed, Seymour says, referring to new market influences such as China and Eastern Europe. Noting another change, he observes that “the freight rate for shipment of scrap from the U.S. East Coast to Southeast Asia is higher than the total c.i.f. price was 20 years ago.”
The Padnos brothers also comment on the consolidation trend that reshaped the business in the 1990s. Mergers were inevitable in many cases, Seymour says, “where family members refused to stay in the business.” Regrettably, he adds, “the 1990s, with its inflated psychology, encouraged many scrap dealers to sell their business for stock that was later found to be nearly worthless. It isn’t surprising that a number of the acquiring companies ended in Chapter 11.” Through the consolidation frenzy, Louis Padnos Iron & Metal followed its own course, eschewing any and all acquisition offers. “We were never tempted,” Stuart says. Though consolidation continues in the scrap industry, creating larger and larger entities, Seymour insists that the scrap business is still a personal-contact, relationship-based industry—a “family” business—and will continue to be so.
Lifetimes of Achievement
For its part, Louis Padnos Iron & Metal has always been—and continues to be—a family business. In its earliest years, Louis Padnos and his wife Helen actively led the company until the second generation—Seymour and Stuart—assumed the reins.
Today, there are four third-generation family members involved in the business. Of Seymour’s four children—Shelley, Mitchell, Bill, and Cindy—two work for the company: Shelley (a past president of ISRI) as executive vice president-administration and Mitchell as executive vice president-marketing and sales. Also, of Stuart’s three sons—Jeffrey, Daniel, and Douglas—two are active in the business, with Jeffrey serving as COO and Douglas as manager-fiber and plastics.
Asked if any of their grandchildren will carry the company into its fourth generation, Seymour and Stuart can’t say for sure, though Stuart admits, “We have high hopes that some of them will step up to the plate.”
Beyond their undying interest in the family business, Seymour and Stuart each have plenty of outside interests as well. Seymour, for instance, is a collector of rare books, particularly Great Lakes histories. He’s also a devoted sailor, having navigated those very Great Lakes as well as the Florida peninsula and the open Atlantic.
Sailing is just one way that Seymour likes to travel. The company’s international business as well as his service in BIR gave him “an incentive to travel extensively around Europe” and enabled him to form friendships with people in many parts of the world, he notes.
Stuart, on the other hand, has visited Israel and other international destinations, though he admits that travel isn’t an important attraction for him. Athletic pursuits are of greater interest. He was a skier until last year, and he insists that he still plays a good game of tennis.
Stuart is also an art collector and artist, with a specialty in creating abstract sculptures out of scrap materials. He started this hobby in the late 1980s and, since then, has created several dozen scrap-based sculptures, many of which are installed at the company’s recycling facilities in Holland and Grand Rapids. These works have enhanced the aesthetics of the firm’s operations for the surrounding communities as well as the company itself, while also giving Stuart an outlet for his artistic talents.
Given their impressive careers in the scrap industry, it was hardly surprising that ReMA selected Seymour and Stuart Padnos as the first recipients of its new Lifetime Achievement Award, which honors individuals whose work and dedication have contributed greatly to the association and the industry.
In giving the awards in April this year, then-ISRI Chair Cricket Williams said the Padnos brothers “have truly made a difference for the scrap recycling business. They lead a family that cares about their community, this association, and our entire industry.”
Today, the Padnos brothers continue to provide a wise guiding hand to the family business, helping to keep it on course and true to its founding principles. “We’ve never tried to be the largest, but simply a company that delivers quality material to its customers,” Stuart says. “We hire good employees, and we make every effort to treat them well to keep them with us.” As Seymour adds, “You have to operate with integrity. Your word should be your bond. If you say ‘yes,’ it should definitely be ‘yes.’”
From all indications, Louis Padnos Iron & Metal and the Padnos family will be saying yes for some time to come.
Padnos Profiles
Seymour Padnos
Born: Oct. 17, 1920, in Holland, Mich.
Education: Attended public schools in Holland, Mich. Earned a bachelor of arts degree in 1942 from Hope College, also in Holland.
Military Service: Signed up for the Enlisted Reserve Corps and entered the Army Air Corps around 1944, serving stateside as an airplane dispatcher until being discharged after World War II.
Family: Married Esther Roth in 1947. Four children—Shelley, Mitchell, Bill, and Cindy—and one grandchild.
Career: Began working full-time for the family scrap business, Louis Padnos Iron & Metal Co. Inc., in 1946 and continues to serve as the firm’s chairman and CEO in charge of administration.
Association Highlights: Padnos served ISIS in various positions, such as chairman of both the ferrous committee and the foreign trade committee. Also active in BIR, including a term as vice president of the ferrous division.
Hobbies: Collecting rare books, sailing, and traveling.
Stuart Padnos
Born: Feb. 2, 1922, in Holland, Mich.
Education: Attended public schools in Holland, Mich. Received a degree in economics from the University of Michigan in 1946.
Military Service: Joined the Enlisted Reserve Corps and served on the front in Europe, including six months as a prisoner of war in a German stalag. Returned to the United States in 1944 and was discharged in 1945.
Family: Married Barbara Hermanson in 1946. Three sons—Jeffrey, Daniel, and Douglas—and seven grandchildren.
Career: Started working full-time at Louis Padnos Iron & Metal Co. Inc. in 1946, currently serving as senior executive vice president in charge of operations.
Association Highlights: Active as a NARI director, as a national NARI vice president for six years, and as NARI president from 1982-1984.
Hobbies: Playing tennis and creating artworks out of scrap materials.
Si Wakesberg is New York bureau chief for Scrap.
Brothers Stuart and Seymour Padnos have set the standard for excellence through their successful family scrap firm, their service to industry associations, and their dedication to their communities.