Scrap Success Story—Heinkele Profile

The recently retired Harry Heinkele—former scrap officer for Commercial Metals Co.—has left a legacy of leadership and good work that will long be remembered.

By Si Wakesberg

Harry Heinkele could not have scripted his career in the metals industry much better. He entered the business at the bottom, you might say, with essentially no knowledge of metals. Then, 49 years later, he wrapped up his career at the top, retiring as president of the Secondary Metals Processing Division of Commercial Metals Co. (CMC) (Dallas), one of the largest integrated scrap processors and steel producers in the country. What’s more, he retired this September at the end of the best financial year ever for CMC’s scrap division. Talk about going out at the top of your game. Such a finish is indeed a fitting end to Heinkele’s career in the metals business, which included his 24-year tenure in the scrap industry with CMC.
   Now this self-described workaholic has an entirely different focus—relaxing and enjoying himself. Scrap caught up with Heinkele in New York City to review his career and talk about his plans from here.

A Scrap Exec Grows in Brooklyn
If you know anything about Harry, it made perfect sense for us to interview him in Manhattan. That’s because Heinkele, who has lived in Texas for the past 24 years, still considers himself a New Yorker at heart.
   No surprise there. He was born in Brooklyn in 1932 and received his education—from elementary school through college—in and around New York City. He attended P.S. 153 and Bushwick High School, then began his college career studying engineering at Pratt Institute in Brooklyn. 
   By 1951, it was clear to Heinkele that he would be drafted to serve in the Korean War, so he decided to enlist in the Navy. He began his military service in January 1952 as an aerographer’s mate, a position in which he tracked the weather for Naval aviators. Though military service interrupted his college education, it offered the consolation of introducing him to Shirley Ann Moore, who was also serving in the Navy. They married in 1954.
   Heinkele was discharged in December 1955 and started working that same month at American Metal Co. “What did I know about metals?” he asks. “Nothing. I was really just trying to get a job. I answered an ad in the New York Times and found myself forever in the metals business.”
   Because he was working in Manhattan, Heinkele decided to continue his college studies by taking night classes at the College of the City of New York. Though he had an interest in engineering and architecture, he opted to study business administration, graduating in 1964 with a bachelor’s degree in that subject. That major exposed him to “a wide spectrum of all parts of business and management,” he says, noting with some understatement that his degree “came in very handy” in his subsequent corporate career.
   In his 11 years with American Metal—from 1955 to 1966—Heinkele learned the copper, zinc, and precious metal markets. He carried this knowledge to his next job at Continental Ore Corp. (COC) (New York City), where he sold zinc and cadmium to the die-cast industry. When COC acquired Pollock International, a small trading company in Montréal, Heinkele volunteered to work there and did so for a year and a half. Then, in 1971, he returned to New York and made another career move to National Lead Co. There, he started out in marketing, then became national accounts manager and, ultimately, general manager of the company’s metal division. 
   When National Lead decided to exit the metals business, it was up to Heinkele to sell off the division in pieces. Afterward, he traded metals from home for about a year, awaiting his next career opportunity. Fortunately, his previous positions had acquainted him with several executives at Commercial Metals Co., including Harry Bauer, head of Cometals, an eastern division of CMC. In 1980, CMC offered Heinkele a position working out of its Cometals office in New York but reporting to the Dallas headquarters. Then, in 1981, CMC selected Heinkele to be the first president of its newly established Secondary Metals Processing Division. Thus began his career in the scrap business and his 24-year run with CMC.
   Heinkele’s initial task was to pull together and coordinate CMC’s various scrap-related activities. “It was a piecemeal operation,” he recalls. “They had operations being done by one individual. The trading was done by the trading group. And the accounting and computer consolidation of all their information was done by corporate. It was all split. I got all those scrap functions reporting to me and established the disciplines for making them operate as a business.” His business philosophy was to stress cash flow and profitability through such efforts as reducing inventory, turning inventory faster, collecting receivables promptly—anything that would ensure positive cash flow and yield a better return on investment for the publicly traded company.
   Heinkele’s approach obviously worked because CMC’s scrap operations—and the company as a whole—flourished. When he joined CMC, it had one steel mill, 18 scrapyards, and several trading operations. “Now,” he states, “we have four steel mills—three in the U.S. and one abroad—as well as one rerolling mill. We have 110 offices in the U.S. and other parts of the world. Plus, our 34 scrap operations process about 2 million tons of ferrous scrap and 250,000 tons of nonferrous scrap annually.”
   Even as Heinkele helped CMC ascend to prominence, he found time to participate in industry trade associations. In his earlier jobs, he was involved with such groups as the Battery Council International, Lead Industries Association, and Copper Club. At CMC, he attended board meetings of the National Association of Recycling Industries (NARI) and was asked to serve as assistant treasurer when NARI merged with the Institute of Scrap Iron and Steel to form ReMA in 1987. Within ISRI, Heinkele chaired the environmental and finance committees, was a trustee for the insurance group, and served on the board of directors.

A Promising Outlook
As Heinkele looks back on his career, he is proud of his contributions to the steady, long-term growth of CMC, especially its scrap division. CMC’s growth as a company, he notes, is a good example of the scrap industry’s progress as a whole, adding that scrap companies are much more sophisticated. “In the old days,” he says, “most scrap plants were mud holes. They lacked decent equipment, they did hand sorting. All that’s gone. Now, safety and maintenance levels in this industry are very high.” In sum, he states, “today’s scrap industry is managed by professionals.”
   Among other industry changes, Heinkele notes the sizable geographic shift of manufacturing and, hence, scrap from the Northeast and Midwest to the South and Southwest. On this point, the Texas-based CMC was certainly ahead of the curve since it has had operations in those regions for years. “We were there before the big metal companies started to move southward,” he says.
   As a large presence in those regions, CMC has been a longstanding exporter to Mexico, which is so close to many CMC operations that “we consider it a domestic business,” Heinkele says. More recently, the real export action has been to Asia, he notes, with China and India in particular increasing their scrap demand dramatically. “China’s growth is phenomenal,” he asserts, “and it will continue to grow.”
   To keep up with current levels of demand, scrap operators must become even more efficient, increase their productivity, and forge closer relationships with their suppliers and consumers, Heinkele suggests. While commodity markets will “always be volatile,” the London Metal Exchange and Comex at least enable companies to hedge their risk on many metals, which has been “dramatically helpful,” he says.
   Despite their volatility on the open market, commodities must remain free of government restrictions, Heinkele maintains. Along these lines, he recalls when President Nixon slapped price controls on commodities and “opened up a Pandora’s box because of the artificial market it created.” You can’t have a commodity that is traded without restrictions in one part of the world while it is fixed in another part, he says, stating, “It just won’t work.”
   Aside from dealing with the volatile nature of their markets, scrap processors continue to face old and new challenges—from environmental concerns regarding shredder fluff to mercury switches in end-of-life vehicles to radioactive sources in the scrap stream, and more, Heinkele observes. Regardless of these problems, he says, “the economics of the industry are such that the outlook is very promising.”

The Script Continues
Speaking of promising, Heinkele’s newfound retirement promises to bring dramatic, but welcome, changes to this work-oriented executive. Thanks to a two-year consulting agreement with CMC, he won’t be totally out of the scrap loop for a while. Still, Heinkele is already filling his time with extracurricular interests such as traveling. While his business travels carried him to many parts of the world—for instance, he vividly recalls seeing Marshall Tito in a parade in Belgrade—there are parts of Europe and Asia he still plans to explore with his wife.
  Now, at a still young and energetic 72, he also has more time for walking, biking, reading, and watching his favorite sports—hockey and football. One of his real passions, though, is following the stock market. “I’ve been interested in the stock market since I was a teenager,” Heinkele says, adding with a laugh, “I hope it’s a hobby that doesn’t bankrupt me.”
   Whatever he chooses to do in his retirement, you can bet it will be as nicely scripted and enjoyed equally as much as his 49-year career in metals. What else would you expect from Harry? 

Summarizing Harry
Born: May 22, 1932, in Brooklyn, N.Y.
Education: Earned a bachelor’s degree in business administration in 1964 from the College of the City of New York.
Military Service: Served from 1951 to 1955 in the U.S. Navy as an aerographer’s mate, first class.
Family: Married Shirley Ann Moore—whom he met while both were serving in the Navy—on June 12, 1954. Three sons—Harry, Kurt, and Erik—as well as three grandchildren.
Career: First job was with American Metal Co. from 1955 to 1966. Worked for Continental Ore Corp. from 1966 to 1971, then for National Lead Co. from 1971 to 1979. Joined Commercial Metals Co. in 1980 and served as president of the firm’s Secondary Metals Processing Division until his retirement in 2004.
Mentors: Walter Hochschild, Paul Parigyi, and Bob O’Hara of American Metal Co.; Louis Lipton of Continental Ore Corp.; John Mardick and Jay De Dapper of National Lead Co.; and Jake Feldman and Stan Rabin of CMC.
Association Highlights: As assistant treasurer, helped with the merger of NARI and ISIS to form ISRI. Within ISRI, served as chairman of the environmental and finance committees, as a trustee of the insurance group, and as a member of the national board of directors.
Hobbies: Traveling, walking, biking, reading, watching hockey and football, and following the stock market.

Si Wakesberg is New York bureau chief for Scrap.