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Staying in Focus

Features - Cover Story, Ferrous

The Glick family has kept Tri-State Iron & Metal’s focus on serving its regional market and has enjoyed company growth while doing so.

Brian Taylor October 16, 2009

Tri-State Iron & Metal Co. processes in one location at its Texarkana, Ark., base of operations. That circumstance, however, does not seem to greatly bother Howard Glick and the other members of the Glick family who manage the 62-year-old multiple materials recycling company.

Since 1947, the company has focused on providing scrap recycling services to its regional market and preparing secondary commodities that are shipped globally to consuming customers.

For several decades, the company has acquired land for expansion when needed, invested in new equipment and technology on a regular basis and opted to handle additional materials to serve its customer base. This focus has allowed Tri-State to remain a viable and growing business in its market region along the Arkansas-Texas border.

ON THE MAP
Tri-State Iron & Metal owes its existence in part to a family vacation, when a Chicago-based family came to visit relatives in the South.

“My father Mordecai Glick had grown up in Chicago but wasn’t happy there,” says Howard Glick, current president of the company. “He and my mom decided to come south in 1947 to visit my mother’s family, who owned several scrap yards in the Gulf Coast region. When your dad said to his father-in-law that he really was going to be looking for new career opportunities, his father-in-law urged him to move south so he could teach him the scrap business.”

After spending time learning the scrap business in Shreveport, La., Mordecai decided to go into business on his own, but not in a city where he would be directly competing with his father-in-law. After poring over a map spread out on the kitchen table, Mordecai (known to all as Morde) chose Texarkana as the place where he would stake his claim.

Texarkana has a population of about 65,000 people, but it is divided by a state line that means that, in terms of governance, it consists of two cities: one of about 34,000 in Texas and one of about 31,000 in Arkansas. It is at the center of a metropolitan statistical area that the Census Bureau estimates consists of 134,000 people. Beyond that, Howard says Tri-State Iron & Metal operates in a trade area consisting of about 350,000 people that includes outlying counties of Arkansas, Texas, Louisiana and Oklahoma.

In the ensuing decades since being established by Mordecai, Tri-State has become a multi-generational family business. Mordecai’s sons Marshall, age 60, and Howard, 55, are now officers who lead the company. Each of them joined the company after attending the University of Texas.

Howard’s daughter, Haley, joined the family business in 2007 and Howard’s two sons, one of whom is in college and the other recently graduated, may each someday consider working for Tri-State.

Marshall has concentrated on the ferrous side of the business, Howard on nonferrous operations, and Haley has been helping manage the company’s paper recycling operations.

For the past several years, Marshall and Howard have co-managed Tri-State without being fixated on titles, says Howard. “Titles don’t count for much—performance does,” he remarks. “Every major decision, we sit down and discuss it. Both of us, I think, feel that we couldn’t have a better business partner. Even when we don’t see eye-to-eye, we’ll find common ground.”

As Marshall and Howard have led the company, they have made commitments to stay current with processing technology, with major investments along the way including an 80/115 Harris Shredder in 2005 and the construction of a 30,000-square-foot building in 2003 to house paper recycling operations to further diversify the company.

MINDING THE MARGIN
The Glick family has managed Tri-State Iron & Metal in ways that have allowed the company to grow, but Howard says chasing a larger volume of business is not itself the highest priority.

“Our emphasis is more on margin and not on volume,” states Howard. “We’re not about how many tons per month can we do—we want to do things that make sense economically.”

Although much of the company’s history consists of growth milestones and company additions, Howard notes that Tri-State also will eliminate aspects of the business that are not generating profits.

“We used to have an aluminum sweat furnace, but it has been shut down for about 10 years,” says Howard. “Now, we shred cast aluminum and make a product from the shredded cast.” The company also has retired one baler and one guillotine shear since installing its shredder.

Perhaps in part because of the company’s willingness to identify and retire underperforming assets, Tri-State’s history has consisted of more installations and expansions as opposed to shutdowns.

Currently, the company has nearly 60 employees who buy, process and sell ferrous and nonferrous metals as well as scrap paper.

Tri-State operates from a 30-acre parcel of land on the Arkansas side of the state line that Howard describes as being not too far from downtown Texarkana.

The 3,000-horsepower Harris Shredder is a critical part of its processing capacity, says Howard. The company installed the shredder in 2005 after considerable research, he says. “My brother and I had discussed getting a shredder several times, and we crunched the numbers,” Howard recalls. “We had sort of reached the point in our business that we couldn’t process any more ferrous scrap with the equipment we had, and other types of equipment couldn’t add value to the product the way a shredder could.”

Tri-State has long run Harris equipment, so Howard says the Georgia-based equipment maker was its first choice as a shredder supplier. “We like Harris; they’ve been good to us, and I guess we’ve been good to them,” he says with a chuckle.

Howard adds that he and Marshall ran cost models to determine that the 80/115 model size made the most sense. “We’ve been happy with it,” he says. “It does a good job, and we’ve added a pretty elaborate downstream system.”
The timing of the installation—just before the 2006 to 2008 scrap boom—was ideal, he notes. “We were fortunate to have a good scrap margin in those years.”

The shredder and downstream system handle a healthy percentage of the scrap materials taken in by Tri-State, but by no means has it caused the company to become one-dimensional.

Many of the nonferrous metals the company takes in are directed to a nonferrous warehouse where a two-ram Harris baler processes much of the material.

The company also has been baling paper for its customers since the early 1990s, says Howard, initially using its nonferrous baler to handle the chore at night and in the evening. By the start of this decade, Tri-State determined that the time was right to make a larger commitment to paper recycling.

Once the Glicks were convinced that the 2001 recession had run its course, Tri-State enacted the plans that resulted in the opening of its 30,000-square-foot paper recycling building in 2003. It also features a piece of Harris equipment—an auto-tie single-ram baler.

Currently, Haley helps manage that portion of the business, which has allowed the company to both serve its metals-generating customers and reach out to new customers in the region.

LOYALTY AND COMMITMENT
As Tri-State Iron & Metal has evolved and grown over the years, it has come to rely on the efforts of a wider circle of people.

Howard says an important aspect of the company’s success has been the work put in by its loyal and experienced workforce. “We have very little employee turnover,” says Howard. “It’s not at all uncommon for our employees to have been with us for 10, 15 or 20 years. With the shredder, we’ve also hired some new people that are very good. I don’t know if I can say enough about our employees.”

What Howard does say is, “We have very loyal people. The folks that work with us are very talented, and we try to treat everyone the way we would want to be treated—‘the golden rule’. Our greatest assets are our people.”
He also indicates that allowing employees to take the reins and have some genuine control over what they are doing is a Tri-State philosophy. “We don’t try to micromanage—we give them responsibility and let them run with the ball.”

Another company attribute Howard cites is Tri-State’s commitment to invest in equipment, technology, land and people—whatever it takes to ensure that the company can compete in all economic climates and react to industry changes.

“We’re a pretty conservative company,” he comments. “We believe in investing in our own future and in looking at ways to improve with technology and better equipment. Also, when times are good, we put those acorns away for when times are not so good.”

Through good times and bad, Howard says Tri-State Iron & Metal has demonstrated commitment to the industry through its involvement in the Institute of Scrap Recylcing Industries Inc. (ISRI) and its Gulf Coast Chapter.
Tri-State has demonstrated commitment to its employees in a number of ways, including by keeping its facility clean and environmentally compliant, he notes. While business owners can find reasons to complain about health and safety compliance measures, Howard says adhering to standards can yield positives.

“What seems like a bad thing can sometimes be worked toward your advantage,” he comments. “Our whole business philosophy is based on service and safety; we’re in our fourth year without a lost-time injury. We like ISRI’s slogan—“Do it safely or not at all.”

Additionally, the company provides health care coverage (“It’s one of our biggest expenses,” notes Howard.) and a profit-sharing plan for employees, “so they can benefit when we do well.”

NEXT GENERATION
Howard says he has been gratified to see his daughter Haley become involved in the paper recycling side of Tri-State’s business. He says his sons also will be welcome at Tri-State, ideally after testing the waters elsewhere first.
“If they want to come nto the business they are welcome—it’s their decision,” he says. “But if they do, I want them to work somewhere else for someone else. Haley did that—she worked in the equestrian industry—

TRI-STATE IRON & METAL AT A GLANCE

Principals: Howard and Marshall Glick

Location: Texarkana, Ark.; 30-acre facility includes shredding plant, nonferrous warehouse and paper recycling building

No. of Employees: 60

Equipment: 3,000-hp Harris 80/115 shredder and downstream system with eddy currents, sensor sorters and other magnetic units; two Harris balers; mobile shears; scrap handlers and loaders; several new Freightliner trucks

Services Provided: Recycling of post-industrial and obsolete ferrous and nonferrous scrap and scrap paper; products shipped out via rail and truck to regional mills and destinations around the world

and my oldest son is now working as a construction engineer. My younger son is about to graduate and is applying to law school. By doing that they get a totally different perspective than if they come straight into the business. I think my kids would tend to agree that it’s good to see how things are done elsewhere.”

One form of experience for everyone at Tri-State has been the market swing of 2008. “We had so many good years, it couldn’t last forever,” says Howard. “We’ve been through the peaks and the valleys before and we’ll get through this one. We have not laid anybody off since this has happened. We told employees in early October [of 2008] that times were fixing to get tough, but we want to get through this together and not lay anyone off. They understood that and have done a phenomenal job.”

Howard says Haley and his sons also have an understanding of ups and downs. “They grew up in the business and they’ve seen good times and bad times before.”

In the near term, Howard says he is proud of the way the company has pulled together to weather the turmoil and that Tri-State is poised to rebound along with the markets. “Our greatest assets are our people, and together we take a lot of pride in our plant,” Howard states. “We’re very proud of the products we make—they’re very clean and they’re preferred by some demanding mills.”

The author is editor-in-chief of Recycling Today and can be contacted at btaylor@gie.net.
 

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