July/August 2006
Over the past 36 years, Stan Rabin has helped build Commercial Metals into a $6.6 billion international company, and he continues to traverse the globe in search of even greater success.
By Si Wakesberg
In the first two months of 2006, Stanley Rabin’s business travels carried him to Poland, Singapore, Malaysia, China, Mexico, and Canada. That sort of globe-trotting itinerary might astound many, but it’s business as usual for Rabin, chairman and CEO of Commercial Metals Co. (Irving, Texas), an international player in scrap metal recycling, steel production, and steel-product fabrication. “I do this all the time,” he says during a brief stop in New York.
From his hotel room in Manhattan, Rabin reflects on how far he has traveled—literally and figuratively—since his childhood in the Bronx, just across the Harlem River from where he now sits. Born in that borough in May 1938, Rabin exhibited an early interest in math and science, particularly chemistry. “It’s hard to account for my interest in science,” he says. “My parents were immigrants from Belarus and Ukraine, and neither had that much education, but they were very focused on education for my sister and me.”
Rabin was 12 years old when he decided he wanted to be a chemical engineer, beginning his pursuit of that dream at the highly rated Bronx High School of Science. He continued his studies at Columbia University—as a 16-year-old freshman—where he shifted his interest from chemical engineering to metals. “When I started hearing about metallurgical engineering at Columbia, there was just something that interested me about metals,” he says. There he completed a five-year degree program, graduating in 1959 with both a B.A. in liberal arts and a B.S. in metallurgical engineering.
Recognizing Rabin’s talent, Union Carbide hired him to work at its Oak Ridge, Tenn., operation on classified nuclear activity. After a five-year stint there (except for six months in the U.S. Army), he accepted a job on the West Coast, working for General Electric in San Jose, Calif., in the field of nuclear power generation. While there, Rabin’s duties included not only engineering tasks but also various marketing and business activities, such as licensing agreements and joint ventures. That first taste of business management prompted Rabin to attend night school at the University of Santa Clara, from which he received an MBA.
Though Rabin enjoyed his job at GE, the call of metals beckoned once again. “I wanted to get into the metals business rather than nuclear power,” he says. “I just saw a better future for myself being directly in metals.” So, after five and a half years with GE, Rabin was ready for his next career opportunity.
That opportunity—which turned out to be the opportunity of Rabin’s business lifetime—came in 1970, when he went to work for Commercial Metals Co. in Dallas. Rabin recalls with pride working closely with Jake Feldman, a giant in the industry whose father, Moses Feldman, had founded the company in 1915. Initially Rabin served as assistant vice president for nonferrous metal marketing under Bert Romberg, a prominent CMC nonferrous executive. Among their early accomplishments, Romberg and Rabin helped the company begin exporting copper and brass scrap. In 1974, though, Rabin moved to the steel side of the business, becoming vice president in charge of domestic and international trade for both primary and secondary ferrous metals.
He continued to climb quickly up the CMC executive ladder. His first major step came in 1978 when he was named president—only eight years after joining the firm. In that post, he appointed various individuals to head different divisions of the company. “We accented manufacturing growth,” he says, “and we developed diversified markets.” He points out, for example, that CMC used to sell its ferrous scrap through a broker, but it stopped that practice in favor of marketing its own material.
In 1979 Rabin assumed the additional role of CEO and joined the company’s board of directors, ultimately becoming chairman of the board in 1999. There’s no denying that CMC, a publicly traded company, has thrived under Rabin’s leadership. Since 1979, the firm’s market value has grown 50-fold, from $50 million to more than $2.5 billion. Equally impressive, CMC has delivered 28 consecutive years of profitability and 164 consecutive quarters of cash dividends.
Today CMC is a vertically integrated company with the ability to process scrap, melt it into new steel, fabricate that steel into new products, and sell its products around the world. CMC organizes its operations into five business segments: domestic mills, encompassing four U.S. steel minimills and a copper tube mill; CMCZ, which includes a steel minimill in Zawiercie, Poland; fabrication; recycling, comprising its 35 scrap processing facilities, 10 feeder yards, and one scrap trading office; and marketing and distribution. Together those operations reported record net earnings of $286 million on net sales of $6.6 billion in 2005.
Rabin is modest about CMC’s accomplishments, taking only a little credit for its success. “Foremost,” he says, “I think we’ve had great people.” The company also has pursued the right markets at the right time, he adds. In the United States, for instance, CMC has focused on the burgeoning Sunbelt. It also entered the China market “pretty early” and is taking big steps in Central Europe as well. “There are big opportunities in Central and Eastern Europe in places like Poland, Czech Republic, Hungary, and Romania,” he says. Pointing out yet another key to CMC’s success, Rabin asserts that “we’ve always been good at sourcing scrap for our steel and copper tube businesses and steel for our fabrication businesses.”
Changes and Trends
In his 36 years (and counting) with CMC, Rabin has seen remarkable changes in the scrap industry. “First, the industry has become much more global,” he says, noting that there’s now greater competition for ferrous scrap worldwide. Offering just one example, he notes that the United States “now gets sharper competition from Russia, the United Kingdom, and other European suppliers shipping scrap to Turkey, the largest European consumer of steel scrap.”
A second big change, he says, is that domestic steel mills have become more involved in scrap processing, with many installing their own shredders. “These mills started out to gain control of their raw materials” and to ensure the quality of their scrap feedstock, he explains. Rabin knows this trend firsthand because CMC operates megashredders at its minimills in Seguin, Texas, and Poland as well as a regular shredder at its minimill in Columbia, S.C. (Notably, CMC’s scrap recycling facilities operate five additional shredders, giving the company eight in all.)
When asked whether he thinks the scrap industry is still a family business, Rabin replies in the affirmative, but he notes that it is slowly losing that character as scrap companies continue to consolidate. That’s just one example of the constant “shifts” in the scrap market, both here and abroad, he observes. Japan, for instance, was once a major importer of U.S. scrap, but it is now exporting its own scrap to Asian consumers.
Regarding scrap exports—a topic CMC knows well—Rabin sees China’s demand “continuing at a good pace, perhaps not as huge as previously, but still significant enough to be counted.” He marvels at the changes in developing countries like China, recalling how that nation has shaped itself into a global economic powerhouse since his first trip there around 1980. Rabin maintains, however, that the most dramatic event for the global scrap industry was the collapse of the Soviet Union, which led to large surpluses of scrap—and significant price declines.
Though CMC has enjoyed the recent strong scrap markets along with other industry players, Rabin warns that “nothing can keep growing to the sky.” Also, he observes, the recent good markets have led many scrap operators to install a lot of new equipment. “Too many companies are buying more equipment than they need—shredders in particular—straining themselves financially,” he says. “There’s a limited amount of scrap in the United States. If you install too many megashredders, you have more and more people competing for the same unprepared scrap. I think there’s enough capacity now.”
That said, Rabin is optimistic about scrap’s future because he sees developing countries needing more and more scrap to feed their growth. Also, he notes, less manufacturing activity in the United States means less scrap availability, which tends to support higher prices.
A Life of Service
Despite the heavy demands of his position at the helm of CMC—and despite his global travels—Stan Rabin has always found time to be a leader in numerous nonprofit and trade organizations.
In the scrap niche, CMC was a longstanding member of ReMA predecessors ISIS and NARI, with Rabin serving on NARI’s board of directors. Today CMC remains a steadfast supporter of ISRI. “A trade association is necessary for an industry,” he says. “It helps promote interest in the industry and protects it from harmful legislation.” Rabin is also a life member of the American Society of Metals.
In addition to his volunteer work for industry organizations, Rabin has served on the board of governors of the Dallas Symphony Association and on the boards of the Presbyterian Hospital of Dallas, United Way of Metropolitan Dallas, and Bank of America Texas N.A.
His service to Jewish organizations has been even more extensive. He is a former president of the Jewish Federation of Greater Dallas, the Jewish Family Service of Greater Dallas, and Temple Emanu-El in Dallas. He serves on the board of the Dallas Holocaust Museum and on the advisory board for the Holocaust Studies Program at the University of Texas at Dallas. Rabin’s dedication to Jewish causes over the years earned him the Human Relations Award in 1985 from the American Jewish Committee.
Recounting his work for these groups, Rabin remarks that he has been asked numerous times whether he’s a relative of Yitzhak Rabin, the late prime minister of Israel. “That’s just what I asked the prime minister himself,” he says. And? “Well,” he continues, “the prime minister just shrugged and replied, ‘I have too many relatives already.’”
For Rabin, family is definitely a centerpiece of his life—and one of his favorite conversation topics. He met his future wife—then Barbara Benjamin—in 1964 in San Francisco and married her a year later in that city’s Temple Emanu-El. The Rabins have two children, Benjamin Andrew (“Andy”) and Nancy, both of whom live in Texas. Andy is an investment banker with Goldman Sachs & Co. in Dallas, and he and his wife Erica have three children, including a new son born just this spring. Nancy, married to Hank Rothfeder, is a pediatric nurse in Houston and mother of two children. Rabin counts visiting his five grandchildren among his favorite hobbies these days.
Reflecting on his 36 years with CMC, Rabin, now 68, describes his experience as “extraordinary, gratifying, and happy.” The bottom line? He still enjoys his job every day. Though he can’t say anything specific about any retirement plans, he notes that CMC has “a major succession planning process underway,” and he’s enjoying the process of gradually turning over the company to the next generation.
For now, though, Rabin has a company to run and another plane to catch, and off he goes.
Rabin’s Résumé
Background: Born May 8, 1938, in the Bronx, N.Y.
Education: Earned a B.A. in liberal arts and a B.S. in metallurgical engineering from Columbia University as well as an MBA from the University of Santa Clara.
Military Service: Served in the U.S. Army active reserve program in 1961.
Family: Married Barbara Benjamin in 1965. Two children—Benjamin Andrew (“Andy”) and Nancy—and five grandchildren.
Career: Started his career at Union Carbide in Oak Ridge, Tenn., then moved to General Electric in San Jose, Calif. Joined Commercial Metals Co. in 1970 and has served in various executive positions there, including his current role as chairman and CEO.
Personal Influences: Jake Feldman, Bert Romberg, Marvin Selig, Clyde Selig, Leo Howell, Walter Kammann, Harry Bauer, Harry Heinkele, Larry Engels, and Murray McClean.
Community/Volunteer Involvement: Former board member of NARI, an ReMA predecessor, and a life member of the American Society of Metals. Board member of the Presbyterian Hospital of Dallas and former board member of United Way of Metropolitan Dallas and Bank of America Texas N.A. (1991-1995). Member of the board of governors of the Dallas Symphony Association (1999-2002). President of Jewish Family Service of Greater Dallas (1987-1989) and an honorary board member of the Association of Jewish Family and Children’s Agencies. President of Temple Emanu-El (Dallas) (1997-1999). President of the Jewish Federation of Greater Dallas (1993 to 1995). Member of the executive committee of the Council of Jewish Federations. Board member of the Dallas Holocaust Museum and advisory board member for the Holocaust Studies Program at the University of Texas at Dallas.
Awards: Received the Human Relations Award in 1985 from the American Jewish Committee. In April 2006, received the Henry Cohn Humanitarian Award from the Anti-Defamation League Dallas Regional Board in recognition of his distinguished service and inspiring leadership in preserving liberty, counteracting bigotry, and advancing the cause of human rights, dignity, and equal opportunity.
Hobbies: Reading, mostly histories and Judaica, and volunteer service. “I used to play tennis, but not much these days,” Rabin says. “My work for nonprofit organizations is my real hobby.”
Si Wakesberg is New York bureau chief for Scrap.
Over the past 36 years, Stan Rabin has helped build Commercial Metals into a $6.6 billion international company, and he continues to traverse the globe in search of even greater success.