Navigating family businesses

The term scrap recycling is applied to the activities of a broad range of companies, but three industry veterans interviewed for an ISRI2021 session recounted three very different paths taken by each of them and the family businesses with which they have been affiliated. The Washington-based Institute of Scrap Recycling Industries (ISRI) hosted its 2021 Convention & Exposition online April 20-22 and April 27-29.

During the session, Robin Wiener, president of ISRI, interviewed three members of ISRI’s Century Club, who each had three markedly different experiences navigating a career in family business.

Inviting nonfamily to lead

Rob Goldstein, executive chair of St. Louis-based Alter Trading Corp., said he started working full-time at his family’s scrap yard in Davenport, Iowa, immediately after graduating from college. His career path led to him becoming the fourth generation in his family to lead the scrap company, which was started by his great-grandfather.

“When I became president in 1989, we had eight yards,” Goldstein said. “My father always said we don’t have to be the biggest company, but we do have to be the best. I felt we did need a little more size as well.”

During Goldstein’s leadership tenure, Alter has grown from eight yards to more than 70. The company has acquired numerous other firms, opened an overseas trading office, moved its headquarters to St. Louis and now has about 1,400 employees. He said how Alter Trading grows is critical to ensuring the company’s reach does not exceed its grasp.

“We are an opportunistic company, and if there is a reason to make a move, we will explore it,” Goldstein says. “But wanting to go somewhere that has no synergistic value for our stakeholders is more than likely an opportunity we’re going to pass on. To just open up someplace because we want to go there for vacation, that’s not our style.”

Although Rob Goldstein’s son, Michael, is the firm’s current vice president of operations, leadership succession is not always ordained as a straight line, he said. “When I took control of the company, I took over from Chuck Smith. So, we had a nonfamily president between my father and myself,” he noted.

A similar process is underway now, as nonfamily member Jay Robinovitz currently serves as CEO after Rob assigned day-to-day duties to him, with Michael working his way through the organization.

Regarding such transitions, Goldstein again recounted his father, Bernard’s, advice. “My father always said, if you have a promotion available and you’ve got two candidates—one family and one not—and if their skills are identical, give the promotion to the nonfamily person. Cream is going to rise to the top, and it is better that they rise to the top in our organization and not be blocked by nepotism.”

When asked about family succession and business management in general, Goldstein said members of a family business “have to have a clear understanding of their relationship. They have to have open communication, and they all have to be self-aware. They have to know who they are and what they can do and respect that. Some people have different skills than others. That’s just the way people are.”

Acquiring outside experience

Jim Wilkoff became the third-generation leader of Wilkoff & Sons in Cleveland, but not before spending several years working on Wall Street and for a New York-based metals trading firm. He left New York in 1971 to join the family business, which has a focus on stainless and specialty alloys.

“Working for another company was helpful in my development,” Wilkoff said. “Various management styles and approaches—one is not necessarily better than another—but it’s important to be consistent. I saw to be open-minded and flexible when making decisions is really what is important. Explaining this decision and how you’ve come to it to your associates is what makes an organization work.”

Wilkoff’s son-in-law is the only current fourth-generation family member involved in the company, and Jim was the only third-generation member, which he ascribes in part to gender roles that have started to fade. “I was the only boy in a family with seven cousins. The other cousins married professionals or had their own family businesses. The girls did not even consider working, let alone in a scrap yard,” he recalled. “Things would be different today, primarily because society has changed.”

Fifth-generation family members are of high school age. As to whether any will join up with Wilkoff & Sons, Wilkoff said, “Ask me in 10 years.”

He expressed optimism for the ongoing role of family businesses and small companies in the scrap sector. “There will always be a place for small, entrepreneurial companies in the scrap business,” Wilkoff said. While the metals industry may favor big players, “In reality, we are a service industry. A small company can provide service just as well as a large one. I do not feel that being small is detrimental. It’s just understanding where you are.”

Benefiting from industry relationships

Barry Hunter grew up with a father who co-owned and managed a small scrap yard in New Jersey. Hunter was preparing to take over that firm so his father could retire when the land on which it sat was acquired for a highway project.

That family business, however, was near a Curtiss-Wright aircraft plant involved in making jet engines. He said, “That’s where my progress on stainless and alloys stems from. What they generated as scrap, we had to figure out what it was.” It opened the door to a decadeslong career for Hunter in the stainless alloys trading sector.

Hunter next worked for a larger New Jersey family company, the former Schiavone-Bonomo Corp. The firm’s owners asked Hunter to become their point person in international markets. Hunter said they had the foresight to explore international markets, which led Hunter to his longtime involvement with the Bureau of International Recycling in Brussels.

Trade association involvement had many benefits for Hunter and the companies he worked with, including Hunter Alloys LLC, which he established in 2003. This is especially true for “family companies in a family industry,” Hunter said. “Your friends become that significant to you.”

He said relationships alone provide “a significant value” to association involvement, but he added, “When I go back and look at all the rules and regulations today and what’s going through Congress, you absolutely have to be involved; you have to know what’s going on.”

Hunter Alloys might not have a second-generation member to take over the business. Barry Hunter said that is in part because it is uncertain to what extent the firm’s business model can continue in a specialty alloys sector where international brokerage is becoming less common.

He credited the ISRI Century Club, which consists of people with a combined age and years of experience that equates to 100 or more, as a way to keep alive the legacies of all scrap sector family businesses. “The friends that we have made over the years are dear to us all,” Hunter said, even including former competitors. “I hope we don’t lose it. I hope our heritage is strong enough that people like myself are looked at as providing a service to the new generation.”

The author is the senior editor for the Recycling Today Media Group and can be reached at btaylor@gie.net.