Arriving on the heels of a glob- al financial crisis, the year 2009 would not strike most observers as the ideal time to start a business. Nonetheless, Michael Eisner drew upon his two decades of scrap industry experience to start Premier Metal Services LLC, Solon, Ohio, at that time. Eisner has subsequently built a small team of dedicated colleagues and has helped guide the company into a growing scrap brokerage and services provider.
A visitor to the Premier Metal offices in the summer of 2014 would see all the telltale signs of an active and hectic trading and logistics nerve center: multiple monitors displaying global metals market information; whiteboards tracking daily tasks and freight priorities; one or more employees on the phone or speaking into a Bluetooth device at any given time; and paper invoices, faxes and other printouts kept in (mostly) organized stacks on desks, in trays and on counters.
Five years after founding Premier Metals, Eisner says he is thankful for the support of his family, employees, suppliers, consumers, processing partners, traders and advisors. All of them, he says, are jointly responsible for helping establish Premier Metals as a firm engaged in trading and service operations with a national and global reach.
Upon graduating from college, Eisner’s first job was not in the scrap industry but instead involved computer programming for industrial radio frequency applications, he says.
His opportunity to shift into the scrap industry came when a fellow Toledo, Ohio, area B’Nai B’rith softball player named Brad Finkel urged him to apply for a job opening at OmniSource Corp.
In the aftermath of a meltdown
The nonferrous scrap industry experienced a meltdown in 2008 in the wake of a global banking crisis that resulted in cancelled and severely renegotiated contracts. Three years later, the sector was hit again, this time by the sudden bankruptcy of New York-based commodities and derivatives trading house MF Global.
Michael Eisner of Premier Metal Services LLC, Solon, Ohio, acknowledges he was among the parties harmed by the sudden bankruptcy of MF Global. In the wake of the event, he spent considerable effort and raised his voice to help make sure scrap traders who hedge would be better protected in the future.
“When MF Global went down, I saw a lot of things that weren’t right about the terms and conditions with futures commissions merchants (FCMs). We decided to become proactive and met with the U.S. Commodity Futures Trading Commission (CFTC),” recalls Eisner.
Subsequently, he says, “We were successful in getting a lot of things changed. Mark Weintraub did a great job with it,” he says of his current Premier Metal colleague, who at that time was a lawyer with the Cleveland office of Thompson Hine LLP.
“We hedge strictly for risk management, not to make money. The way things were set up, the money we had on account was at risk when it shouldn’t have been,” Eisner says. “The changes are for the better, but to enact those changes we had to involve the CFTC, several U.S. senators and congressmen.”
While traders now have more protection in this specific instance, Eisner is skeptical that the trading community has fully learned its lesson from the 2008 and 2011 events.
“People have short memories,” Eisner says. “Asia is setting up like it did before, and people are doing exactly what they said they would never do again as far as credit terms. Another bad event is going to happen, it’s just a matter of when.”
The Fort Wayne, Indiana, scrap company had operations in Toledo and Fort Wayne at that time, and Eisner ended up being offered and accepting the position. “I started in traffic management in Toledo and Fort Wayne, and it was the single best type of experience,” Eisner says.
His colleagues and his exposure to operations helped convince him that there was much to be learned about the scrap industry at the yard and plant levels. “You’ve got to spend at least three years out in operations,” he states.
Eisner says this initial exposure, followed by his ongoing priority to visit yards, plants, mills and foundries at every opportunity, has been a critical factor in becoming a more complete trader. “To visit accounts and know what you’re talking about is totally different from just trying to sell a product.”
Several years into his OmniSource tenure, Eisner got married and began making plans to move back to his native Cleveland area. While in Cleveland to interview with ingot maker I. Schumann & Co., his contact there recommended he visit nonferrous processing and trading firm Conversion Resources.
That company proved to be the better fit, and Eisner was soon assigned to a scrap procurement role. “I was buying for the company’s copper refinery in Warrenton, Missouri, and my book was west of the Mississippi River,” he recalls. “I spent between two and three years there and really learned a lot, engaging in hedging and LME (London Metal Exchange) and COMEX DTN (data transmission network) communication.”
Eisner next moved to another Cleveland area company, where he helped build its trading and hedging business and spent several more years gathering additional red metals industry knowledge.
By early 2009 Eisner says he was ready to pursue his long-term goal of starting his own business, and in May 2009 he set up the legal, accounting and office infrastructure for a firm that was without a name until his attorney suggested the word “premier” as a viable option.
That month Eisner engaged in a whirlwind of activity that included meetings and contract signings with his attorney, banker and accountant, as well as with his brother Stuart Eisner, who he credits for donating a laptop to help him get started. Eisner says he quickly purchased software from ScrapWare Corp., Rockville, Maryland, to help organize what he hoped would be a growing book of business.
Eisner’s brother also was among a chorus of voices (joining his accountant and banker) who advised him to hold off on his initial desire to run a physical plant. “My accountant asked me that afternoon, ‘Why do you want to do that?’
“It was what I thought I was supposed to do,” recalls Eisner. “But that very first day I realized I really didn’t want to have that overhead.”
Subsequently, Premier Metal Services has focused on using Eisner’s and his colleagues’ knowledge and commitment to service to build a company that provides value to scrap generators, processors and consumers without the need for a physical plant.
Beyond the basics
Scrap trading on its surface involves the ability to sell a load of materials to a willing buyer for a price that ideally allows the seller to profit and the buyer to be able to process or melt the material while maintaining a profit margin.
Eisner acknowledges these basics are always in play but adds that he is a firm believer that a successful trader also can provide a great deal more, with the additional services contingent on a deep knowledge of the metals industry and strict attention to detail.
“I try to visit all my suppliers and consumers. You never know what you’re going to pick up on when you’re there,” he comments. “Anybody can walk through a plant or a consumer facility, but it’s another thing to learn the chemistry tolerances or how the plants work. You’ve got to provide value added in what we’re doing. We have to be detail oriented and anticipate for our supplier and consumer any potential pitfalls.”
He looks back at his operations experience as critical in this endeavor. “I supervised in all areas of nonferrous plant life, including both a union and nonunion environment. I learned what it takes to sort material and make acceptable packages that the mill can use. I supervised a lead smelting furnace, worked on a wire chopper and oversaw the operations of a scrap processing facility. The best experience was running the scale and dispatching trucks, as this is the nerve center of any operation,” says Eisner.
In addition to knowledge, such experiences also helped him cultivate the desirable trait of empathy. “It’s a piece of advice I received early on: Don’t ever ask someone to do something you haven’t done yourself. You may not do it as well, but you have to have an appreciation for things like changing the blades on a granulator.”
Regarding the current activities of Premier Metal Services, Eisner is quick to point out that brokerage is just a part of the overall picture. “You can’t just buy and sell metals. I’m processing aluminum and setting up partnerships throughout the country where I subcontract with current suppliers to do the processing. We take physical possession and track it and then sell it,” he says.
Upgrading material and finding the best home for it in terms of metallurgical chemistry allows Premier to move beyond a “quarter-penny-on-the-pound” trading mentality. “One of our strong points is treating people fairly and helping them to solve their problems,” says Eisner. “Then the business model becomes not just price. There is more to it then picking up the phone and moving it from A to B. What happens if that metal gets rejected or if someone’s specs change? That’s when service becomes critical.”
In an industry where transactions can involve large sums of money and can hit bumps in the road, Eisner says intangible qualities also are important to Premier’s ability to service its customers. First and foremost, he says, “Just be honest with people. They know we have to make something, and we will tell suppliers where our sales price is. If there is a claim, you’ve got to look at the numbers and understand it.
No shortage of mentors
Michael Eisner, owner of Premier Metal Services LLC, Solon, Ohio, and his long-time friend and current trading colleague, Mark Weintraub, point to a string of scrap industry mentors they have encountered along their career paths.
Eisner’s first job in the scrap industry was with OmniSource Corp., Fort Wayne, Indiana, where his friend Brad Finkel helped recruit him and train him. Eisner says he also learned a lot from the Rifkin family, who owned OmniSource at that time.
Later stops in Eisner’s career included Conversion Resources in Cleveland, where he says he “learned all sorts of things about mark to market, hedging, trading positions and dealing with people” from Ralph Razinger. Also at Conversion Resources, Eisner says Tom Yancy taught him “that you can choose who you do business with” when it comes to untrustworthy or unpleasant customers.
Weintraub started his scrap education learning about his great-grandfather’s scrap yard in Lancaster, Ohio. He also helped his father run General Auto Wrecking in Akron, Ohio, until the mid-1980s.
Weintraub continued his scrap metal career at Columbia Iron & Metal, Cleveland, and is still grateful to David Miller for the opportunity. Weintraub worked at Columbia’s former Cleveland processing yard, the Atlas Lederer Co., where, he says, “I learned a tremendous amount of valuable information from Leonard Abrams, including that you have to come to work every day expecting something to go wrong. If you have that mindset, it’s a lot easier to deal with those issues.”
Weintraub learned about copper and brass from David Nagusky and Rik Kohn at The Federal Metal Co., Bedford, Ohio, while working there. He also learned from competitors in that sector, such as Pat Boyle of H. Kramer & Co., Chicago.
“This business is problem solving,” he continues. “It’s a dance. You have to figure out where material fits. That’s what separates us. We never say ‘It’s rejected, take it back.’ I’ll travel all over the world to look at and consider the rejected loads.”
Communication is another key intangible. “In building this business, when we ran into an issue we listened to our customers and created systems, which included achieving our ISO 9001:2008 certification in 2011, to prevent problems from happening in the future,” Eisner says. “There is nothing worse than being in a plant waiting for a truck, and no one communicates to you whether it’s coming or not. We might over-communicate about this stuff, but we’d rather do that.”
The addition of Jill Reagan as a logistics coordinator in January 2014 has helped Premier pay additional attention to the freight aspects of the business. “Reacting to suppliers or customers who need to receive metal or move product off the floor quickly” is a critical service component, says Reagan.
In all transactions, the trust factor in scrap trading is difficult to underestimate, notes Eisner. “This can be the only industry in the world where you’re shipping a $150,000 order and there are no papers signed,” he adds.
As Premier Metals’ customer base and volume of traded materials has grown, Eisner has been able to move beyond the methods he established during his first year in business.
In 2009, Eisner’s wife, LeAnne, provided office management support, though she also needed to spend considerable time with their two children, as Eisner acknowledges he was largely absent from home that year. “LeAnne and I look back at that first year and call it the best of times and worst of times,” Eisner says.
“It was thrilling—I was doing what I always wanted to do, and my wife was very supportive. But we had a 2-year-old and a 10-year-old at home. I lost a year with my family, but I wanted to do it all myself to learn. It always felt right when I did it—it’s not like there was pressure. But I was working seven days a week.”
The unsustainable schedule has been alleviated with the hiring of three employees in the ensuing years: Reagan, logistics coordinator; Stacy Campbell, office manager; and, in 2012, Mark Weintraub, trader and in-house counsel.
Weintraub is a fourth-generation scrap industry veteran whose recycling career was put on hiatus when he spent seven-plus years practicing commercial bankruptcy law at a Cleveland-based law firm. Weintraub had attended law school at night while working full-time at The Federal Metal Co., Bedford, Ohio.
Weintraub and Eisner had been friends since the early 1990s, when they both briefly lived in Toledo. After both returned to Cleveland for other positions, their friendship and business relationship grew. In late 2011, they again crossed paths for a very much unwanted reason—the sudden bankruptcy of New York-based commodities trading company MF Global.
The duo worked together with the Institute of Scrap Recycling Industries Inc. (ISRI), the Commodity Futures Trading Commission (CFTC) and several U.S. senators to effect major changes in the commodities trading sector. (See the sidebar “In the aftermath of a meltdown” on page 42.)
As they spent time together, Eisner made it clear to Weintraub that he would be welcome to join Premier Metal, not knowing that Weintraub was in fact considering the possibility of coming back into the scrap business.
When working on the MF Global case, Weintraub says, “I was a little nervous after being out of the scrap business for eight years, but when I reached out to speak to friends in the business, it was like I never left. Michael was very persistent, and at the same time I was reconnecting with the scrap industry I was reflecting whether I wanted to spend the rest of my work life practicing law.”
Weintraub joined with Eisner at Premier Metal in 2012 and says he is glad to be back in the scrap industry. “Certainly the relationships are a significant reason; I have made life-long friends in the scrap industry,” he says. “Plus, this business requires a lot of creativity. I’ve always found that very stimulating. Whether you’re buying or selling, you have to be creative about how you’re marketing metal so it will maximize opportunities for suppliers and consumers. And the industry is constantly changing, so you continue to learn and face new challenges.”
Weintraub adds, “I’m comfortable in the scrap business. I’m a junk man at heart, I don’t care how many degrees I have.”
In addition to continuing to gather metals industry knowledge, Eisner says the role of being a business owner also has required him to learn more about himself.
Eisner says that by his second year in the business it was clear to him he had more to learn about personnel management, delegation and even interpersonal communication with customers. “I contracted with someone in year two because I could see I was the limiting factor—I was the bottleneck,” he remarks. “This career coach helped me embrace a corporate philosophy of communication, trust and accountability.”
He continues, “I looked in the mirror and asked, ‘Where do you want to go, and what’s preventing you from getting there?’ And it was me. Setting up was a solo act, but growing the business would involve teamwork. And you don’t want turnover because it takes too long to train people.
“The team we’ve assembled here operates without conflict, but it takes work. We have off-site retreats,” Eisner says.
Striving for stronger communication and trust “translates to your personal life,” says Eisner. “They are skills that transcend.”
In his approach to employees and customers, he says, “I’ll never stand in your way if you think you can improve yourself. Also, don’t be unhappy. Life’s too short. I want all the people I deal with to be happy and to be fulfilled.”
Weintraub, who has known Eisner for more than two decades, says, “I’ve seen him mature as a business person, and it’s really rewarding being able to participate in such a close friend’s growth and success.” Because of the way Eisner manages the company and its employees, Weintraub says, “A significant part of what we do involves personal growth.”
Eisner’s management approach also is appreciated by Campbell, the office manager. “I don’t really know enough about the scrap industry yet,” says Campbell, who began working full time for Premier in December 2013 after a previous part-time stint. “What I do know of the scrap industry is that there are ways to take advantage of people, but Michael won’t do that. It’s not in his nature. He has integrity, and this business, to him, is about doing things the right way.”
Weintraub credits Eisner with several positive traits that have helped Premier Metal grow significantly during its five-year existence. “I know a lot of people who went to top universities and law schools—some very smart people—yet Michael is one of the smartest people I know. He is persistent, creative and he gets tremendous satisfaction from helping others. His thirst for knowledge and growth permeates the company. Life has to be more than just coming to work every day. It is here, and I enjoy it.”
Five years after starting Premier Metal Services, Eisner says he is grateful for the growth the company has experienced as well as for the personal growth that has come along with it.
“It was a slow journey to develop my thinking like this,” he states. “Introspection is a wonderful thing if you’re willing to do it, but it’s not easy, and it’s not easy to change who you are.”
Eisner says his goal is for him and his colleagues to look forward to each day at work. “I enjoy what I do; it’s my hobby. I want to continue to grow my interpersonal skills with everyone here. People are much more effective when they’re happy and when they truly care about where they work. That comes from the top down, and you have to believe in that. Done in an effective manner, it can really build teamwork.”
The author is editor of Recycling Today and can be contacted via email at email@example.com.