Born Scrappy
The go-to podcast for scrap metal exporters and traders
Born Scrappy
S2E9: ISRI fireside chat with scrap legends George Adams and John Sacco
Join me for a fireside chat with SA Recycling’s George Adams & Sierra Recycling’s John Sacco live from ISRI 2024!
In this episode we chat about:
- Cleaning up our act
- Why you lose $ when you stockpile
- Our biggest challenge as an industry
- When to collaborate with competitors
- Why there will be scrap shortages in the future
WHO IS STU KAGAN ANYWAYS?
Okay, guys, um, we'll get started. If you guys want to grab a chair in the front, feel free. Apparently, we were on screens throughout the expo as well. So, put on your best faces. Hopefully, you've all put your makeup on. So, we look good for the cameras. I forgot my lipstick. You got any? Right, obviously. So, guys, um, firstly, this is the first time Isri have ever had a stage inside the expo hall. Which I think is pretty exciting. Like we get to do the podcast live. There'll be demos throughout the next two days of some cool, um, new products and things like that that are being offered in the industry. John, you'll be up here again. Yeah, I'll be up here today. A little later. Make yourself really comfortable. I, uh, yeah, I got a cot in the back behind here. Sounds good. So this is really cool. So thanks to Israel for making this happen. Um, hopefully they're going to do this every year so we can get in front of the crowd and actually speak to people. Hopefully get some questions as well. But I think let's open up with how have you guys found this year so far? I mean, we're only day two, but what's been happening on your side? Go ahead how we found. Is there so far? Yeah Yeah, so how's the event been? Well, we survived our party last night. So that was the good thing good start No, look it so far. It's been great. I think the convention hall looks great I think everything is spread out and I think that uh, there's plenty of space to move and I thought getting in last night I thought the uh The check in was really smooth and so I think it's gone perfect so far. I think they've done a hell of a job Yeah, I totally agree Amazing, you know yesterday before it opened up. We had the isri provided the repurposed booth and uh Guys like jay and those who helped participate, you know, we got to you know spreading the word right podcast spreading the word isri is is Helping us do that along with this amazing convention hall and all the people that are coming to the You Do these sessions. It's exciting. And so far, first class all the way. Yeah. Yeah. It's been great. I love the space as well. Um, everything's flown really smoothly. I don't think anybody's waited in queues much. Um, some, sometimes people get that wrong and I think this has gone really well. I want to open up really with a story that we've had. We've done, I think, I don't know what it is. Um, 30, 40 episodes so far of Born Scrappy and the one story that people keep coming to speak to me about. Is George's story about when he put in his first shredder and the different, well, the biggest shredder and the difference that it made on your business and how it literally catapulted you to a whole new level. So George, for those of out here that haven't heard the story, if you can just give us a kind of explanation of what exactly happened, how, what the impact that had on you as well, and how important I guess, buying the right equipment is seeing where you're sitting at Israel today. All right. So look at the. In 2003, we, we had an old junk shredder we bought from Scott Newell, um, which was a hammer mill. He put in a new shredder and actually the Simon Company, um, and, uh, he put in a new shredder. Their old shredder was sitting there. We bought it. We ran that shredder from 1980 until 2004. And so a long time, because we were a little tiny company, we didn't have any money. And in 2003. We decided we got, uh, uh, we were able to borrow enough money to put in the first mega shredder in California. And so it was 10 million bucks and we thought it was going to take us three years in order to get to where, you know, that thing would, would make sense and be profitable. At the time we were doing 12, 000 tons a month. And we thought that it would take us three years to get to 30, 000 tons. And we had a plan of how we're going to do that. And we would be able to get there. And so we got the, we got the shredder in and the, uh, we've shredded our first car in November of 2004, and just happened to be the timing where the market, you know, that was the market was starting to run up the volume and the economy and stuff were starting to pick up. And in December, the very first month we operated, we shredded 20, 000 tons. In January, we set it 30,000 tons, and by March we were shredding 50,000 tons a month. And, and at the same time, the price of shredded scrap, which, you know, I'd spent my whole entire life selling shredded scrap at like 80 bucks a ton, right? That's shredded not cars, that's shredded, delivering it down to the dock. And you're lucky to make a few dollars a ton on your Zorba. Again, make shit on the, excuse me, that's bone scrap. You can nothing on the, uh, steel. And so. And all of a sudden, you know, we're making like a hundred dollars a ton. Okay. And your wildest imagination, you never had it. And so we were making more money per month than we'd made, like in the entire history of our, our company. And I always say, and people say you got really lucky and I agree. We got really, really lucky, but I always feel that you make your own luck because obviously we took the risk. We spent 10 million bucks out there, which was more money than God to us back then. And, you know, we spent the money and we put the shredder in and we gave ourselves the ability to be lucky. So that was, that was, that was life changing for us. So, yeah, I mean, the timing is phenomenal, right? All the way up to 2008, but you miss 100 percent of the shots you don't take. So it's kind of putting yourself out there taking that opportunity. So many people out here right now are looking at different pieces of equipment and not sure whether they should go for it or not. I'm not going to tell everybody to do it. Cause you could come back and hold it against me if it goes wrong. Um, and don't just buy any piece of equipment, but you know, by any piece, you've got to buy Sierra Sierra. Well, the next question is actually for John on that. So tell us more about Sierra. No, I'm just kidding. Tell us, um, a purchase of a piece of equipment. That has catapulted the company similar to what we've just heard here because you're selling equipment all day And you've been doing this for a few years now. Well, it was my dad back in 1983 Saw a baler in italy. He always my dad always used his watch Timing how fast how fast does it take to do this load a truck load a rail car? Whatever time was always a factor for my father and he saw this machine in italy and he brought it in Uh to america in 1984 We got in an 84 and it was changed the way we process sheet iron and Bakersfield. And then people started noticing it. And my dad, the entrepreneur he was, well, I can sell these things. So yeah, that one piece changed the course of my life because I did not know I was going to be in the equipment manufacturing or distribution business. When I was in college, I had no concept of that. So John, that's a, That's obviously affected you, but can you think of where you've sold and you don't have to mention names obviously, but where you've sold a piece of equipment that kind of propelled their volume that they handled or allowed them to make a greater margin or clean the material better or something like that? Well, it was the sheer Baylor logger back in the late eighties when we started selling those, I can't tell you how many small operators in the heartland, Indiana, especially one of my closest friends, Mike Lewis back in 89, he, uh, He was a very successful guy. I didn't have anything. He bought the sheer Baylor logger. He could share, he could bail. He could log for the shredders and it propelled him and as many others did. And so that innovation itself allowed the small guy to be extremely versatile, go to the markets where the bundles were needed, where the logs were needed and where the foundries back in Indiana, back in the time cutting two foot foundry, cut grade scrap brought a huge premium over the Chicago mills. the Gary Indiana Mills. Johnny's dad in 1987, the health department shut down our shredder, and Johnny's dad gave us a shear baler, and just on a handshake, and kept us in business, because we couldn't run our shredder. And uh, that was 1987. That's amazing. Yeah, just think if my dad didn't. George, I don't know, would you be sitting here? Exactly. He always gets mad at his dad. He says, you could have just let him go out of business. Yeah, you could have crushed him, dad. No, but, you know, those are, those are the things. Money was, see, that was the thing for my dad. Money was not his gig. He didn't care about the dollars and he cared about people, his word of honor. And if he could help people, look, he came to America with nothing in 1935, got out of world war two, 90 bucks, 90 in his pocket. He always told us that story to him. Helping people in the end was more important than always having your handout, always having to make money. Um, my wife. Often mentions Lisa, she's done a lot of market validation and really got to know this industry over the last seven odd years. Um, she'll often say that the only real currency in this industry is relationships, right? Um, it's something that can last forever and, and it's about investing in that, you know, right from the beginning. I agree. Um, just to add some value because born scrappy when we created it was all about having the likes of yourselves on the show, but really adding value instead of just telling stories. So, well, we tell stories to add value as well. Would you say that anybody looking to buy their first real piece of equipment, right? Obviously we've got forklifts and material handlers, diggers, whatever you might have. A sheer bailer logger is something that I've always thought as a starting piece of equipment is really important. Would you agree with that? Well, I think it, look, there's a lot of pieces of equipment and it all depends what you're doing. I mean, if you're a non Ferris yard, yeah, yeah, absolutely. Okay. You may not need it. I just think you got to start. The investment in equipment is the investment in the future of your operation, because I can't tell you how many people would buy one style of machine that propelled them to get into another part of their business. I mean, look at George, okay. Shredder now look at his downstreams with Don Ferris and his work, what he does with that. So it always leads to something else. So my point is, is what are you doing? What's your niche now invest in that that's going to give you the opportunity to grow into the other areas? It could be a material handler. It could be just a simple forklift. It doesn't matter. Investing in your operations will open the doors to opportunity down the road instead of just sitting idle. So I can't afford, I can't afford, you can't afford not to invest. Yeah. Yeah. I found, um, when I started my company in New Zealand, we're starting from scratch. Um, I got a shear bailer logger to start off and I outgrew it within three months. Right because it's a great starting piece of equipment But when you have too much volume, which is a great thing all of a sudden It's I will now I can upgrade to a shredder now. I have different equipment needs So I I like the versatility of it. I'm talking about mainly a ferris yard. Yeah But yeah, you definitely get to a stage where you have to um kind of look at other pieces of equipment I wanted to carry on on the adding value side of things The markets are hugely volatile. They always will be volatile. We touch on in every episode, we talk about how we can manage that risk. So George, obviously with the amount of yards that you have, how do we manage market volatility risk, as well as obviously, you know, that leads into inventory and stock management, et cetera. So what sort of advice do you give everybody out there listening on that sort of topic? All right. Well, look at one thing's for sure. I'm an operator, not a trader. And so it's really easy. Mark a voluntary risk with me. I already know, I don't know what the price is going to be next month. And I already know that I'm not smart enough to predict the future as far as where it's going to go. So it's really simple. We 100 percent of every pound of scrap we buy every month. It's obviously not perfect because. You know, you're buying like on domestic sales, right? You're, you don't know exactly where the price is going to go, but you have a guess where it's going to go. And then based on that price, you try to guess how much scrap you're going to buy. It's, you know, you're not always going to hit it right, but we try to hard. I don't play the market. I don't think the market's going to go up 20 in the future. So we're going to hold scrap or we're not going to sell. I'm not smart enough. And if you're, you know, buying between four and 500, 000 tons a month of scrap, If you decide to hold scrap, well, the next month you've got 800, 000 or a million tons to sell. Well, you sure as hell can't do it. So we, we try as hard as we can to sell a hundred percent of our scrap every month. It's easy to sleep. I don't, I don't believe in taking market risk. It doesn't mean you don't end up with some just because you always have some scrap unsold. But we try our best to sell a hundred percent of our scrap every month. Do you have a, you've got multiple yards, do you have some sort of, um, KPI or a rule for the yards that they need to try and get to within 10 percent of their purchases or something like that? So, so what we try to do is we say that if you're, if you're, uh, non ferrous, let's just say that you buy half a million pounds of non ferrous a month. That means. At the end of the month, you're allowed 250, 000 pounds, 50 percent of, of what you're handling. And on steel, it's 10%, just the number you just said. So if you buy a thousand tons a month, then we're saying you can have a hundred tons of inventory and processed at the end. And we try really hard and literally we put out an inventory sheet every single day, and it's all color coded green to red so that you can see the yards that are way off of their numbers on what they're going to do. And so that we can watch them and push them to get their scrap out so that they're going to be out there. Because at the end of the day, you don't make a dime until you sell the scrap. You don't make a dime. And my guys are all on a bonus system, and they get no credit for inventory. So it puts a lot of incentive for people to get the scrap out. And I also think, to that model, to that, when you're handling, every time a grapple or a magnet, something touches metal, there's a cost. And you, you prepare it, you stockpile it. And if you're not shipping it, you're playing the market. Well, the market's going to go up 5. Well, if you're double, triple handling that material to hold it for a month, you're actually losing it. You're losing money. So just getting it out the door, you know what the buy in the cell is, get it out the door. Let the market play itself. I can't tell you how many exactly what Johnny said. I yards I go into. They've got the same thousand, 2000 ton pile of scrap that's been there for 10 years. And they buy the same amount of scrap every month, and they ship the same amount of scrap, but they never get rid of that one pile. And they spend so much more money working around that pile. Ship to the ground, always ship to the ground, you'll never have a fire, your yard will run more efficiently, it'll be cleaner, and it just works better. So I think I've heard you mention that a few times, I've heard other people through different avenues talk about that. But I I didn't believe I'm talking about people carrying a lot of stock and I didn't actually believe it until I traveled around the U S um, over the last few months, I couldn't believe the stockpiles that I saw too much space. Yeah, exactly. It's an enemy to a processor to be able to say, Oh, we'll put it over there, put over there. If you go into Europe, they're poached to stamp yards and they're moving it. They're moving it every day. And I think, um, People get lazy with space. That's right. We, we buy yard. It's got 40 acres. It's got 60 acres. They will F up the entire property. It will have scrap from one end to the other, right? Ship it all down and then put barriers across and get yourself down to three or four acres because you don't need all that space and you're way less efficient. They can park roll off boxes are out there, but you're operational. You put barriers up and you get yourself skinny down to one spot. Yeah, I couldn't agree more. I mean, my company in South Africa, 85 yards, we had the same 10 percent on Ferris. I mean, everybody was assessed on that at the end of every single month. And what I love, what you said was we analyzed it during the month so that we weren't just, we often used to say accountants are just counting the money, right? But it's always after the fact, if you're monitoring it in the month. You can actually put an effort into it. So you go, we're halfway through the month. These guys are holding 70 percent stock. We look at their sales. There hasn't been enough sales allocated to that yard. We know that based on this trajectory, they're going to end up on 40%. All of a sudden you send a management team in there and we look at how we clear that yard as quick as possible. I think logistics played a big issue. Sometimes, you know, waiting on a rail car, absolutely. Or they don't want your, your rail spur holds only so many cars. The railroad doesn't pull the car. Now you, now you're scrambling. There are some instances, but you got to know your logistics. You got to know you can't ship it. Like at Sierra, we cannot ship everything by rail. Yeah. I read all our volume in a month on iron. No chance in hell we can ship it all by rail. So we have to make, you know, we have to get the containers. We have to get the in depth. We have to do other things to get it out the door. And not rely on just once, but at least it's prepared. Right. That's the key, right? At least it's prepared. It's one thing for rails, dark rail cars don't come in or ships don't come in. Right. Our terminal Island facility, we're shipping both, but it's prepared, right? You go in and you'll hear the excuses about rail cars or whatever. And then you're looking at a 2010 pile of unprepared and you're like, well, big deal. If you had rail cars, you can't ship that crap. Had nothing to do with the logistics. That's right. If it's all sitting there, oversize a hundred percent. John. Let's touch on, um, what the challenges are that our industry is facing. You speak about it every day. You really are hugely involved in this, but I think for everybody to get a picture of what's coming, what are the challenge we're expecting to face over the next few years, 10 years, whatever it might be, and solutions, like how do we strategize? Well, one of the biggest issues I think I see out there, and I've been in a lot of yards. Yeah. They don't represent, they represent something other than what they say. You go in and they look like crap. Okay. I always say your equipment is the mirror to your company culture. The biggest challenge is for people in this industry to understand our image is terrible. So if they walk into your yard and it looks like hell, you, you get that challenge is going to stay. Cause that, that regulator, that EPA, that DTSC, they're going to be on you. Okay. So the challenges. Always are starting at home. Let's clean up our act and then let's start talking about what we do in a different light and let's educate. We got to get out and do more education because the challenge to people who don't understand what we do is what hurts us the most because they want to call in California, they want to call shredders, hazardous waste facilities. So our highways are built from hazardous waste. No, our hospitals are not built from hazardous waste. That's a challenge. How do we change the narrative? But if you don't have a clean act, you got starts at home. You got to look in the mirror and you have to say, what do people see when they walk into my facility? I think it starts there and then it morphs into all the other issues that we have. Yeah. I think, um, you know, you hit it on the head, any changes we're going to want to make globally in the future. First thing we is clean up our act. We don't even know necessarily what we're going to want to do in the future. And 10 years is a long time away to make change. It's going to be a lot easier if we're a. Have a great reputation. If we seem to be a clean operation, a clean industry, we'll look at the EU. Copper is waste as well. That is the craziest damn thing I've ever, all recycled materials are waste. That, that is just terrible. And we got to prevent that, that disease from spreading all over the world to where every time, every country, it's all waste that that's not going to help. And the mills don't want to be buying quote unquote. Hazardous waste because some regulars say, ah, you're buying hazardous waste. So your facility is a hazardous waste receiver It's crazy. This is the chat. I think the biggest challenge that's facing us is our designation Is not a commodity waste That's what our big I think is one of our biggest challenges. So john we've got close to 7 000 people out here at the moment What can everybody here do not everybody's going to have a podcast not everybody's going to set up an incredible, you know Docu series What can they do? When you're outside of your op, you know, you and you talk, you have to engage your community, okay? You have to engage the policy makers. Old politics are local. They say that is where it starts. But if you're not out in the community, if you're not representing the community in a fashion that they know who you are and that you are actually helping the community, you know, start there and then it builds. You can't, you know how to eat elephant. One bite at a time, right? Start in your own community. Start it with your own workers, make them feel safe, make them feel that they are part of a winning team, and then let the community around, you know, your business is a winning business for sustainability, carbon, decarbonization, et cetera, et cetera, all these buzzwords, but he got to learn how to say it. You got to learn how to play the game that way. I think that's where you start. Yeah. And I, I know there's a lot more engagement on social media, obviously that's only going to just grow. And I think somebody mentioned, I think it was Michael Goldstein mentioned to me the other day, people are posting, but they're not necessarily considering what they are showing the rest of the world. Well, okay. Let's get into it, John. That's my pet peeve. I tell people who know me because of my presence, I said, I love what you're doing, but would you please put a hard hat on, would you put safety glasses on because you're in your yard jumping around going, yay, look at me. Yeah. You look like hell. You're not safe. You know, I said, George, this is true. This is how friendships and relationships, everybody in this room will have that can help. I did a video up in Canada that the yard operator says, hi, you don't have to wear hard hats. We had the vest. So I said, George, this video, take a look at this cool video. It was me and Edward. George goes, it's great. Where's your hard hat and safety glasses. So I never used it. So you will never see me in a yard without it. And people post their forklifts that look like just. Seatbelts hanging on the side, drivers of the forklifts with sombreros on, drinking a cup of coffee, right? Forklifts that look like they've been through Baghdad, okay? It's just like, what are you doing? You projecting, you are telling the world, I'm an unsafe operator. And it's there for the record. It's there for the taking. George, you've got a huge amount of people working for you in your operation. Huge amount of yards. What are you doing in that way? What do you tell the team, you know, whether it's. Just to, I guess, even be safer. People are posting all the time. Can you, you, I guess you can't control what they're posting, but is there any guidelines you give them? You know, we don't, we don't do social media like John does. So the, I mean, he's the, he's a master at it. So I don't think I've ever posted anything in my life. Actually. I know I haven't ever posted in my life. It doesn't mean I shouldn't, but never have. I didn't know how to do it, to be honest with you. But, um, the, uh, And so I see some of our people post it charity events and stuff like that But I don't really see us posting much stuff in our yards Um, to be honest, I never really thought about you know As far as trying to control that because it hasn't been an issue that's come up Yeah, I know of certain employers That it's not necessarily giving guidelines, but it's more about helping and saying if you're going to post These are the kind of things that are going to be good for our industry Obviously, I guess it starts at home making sure that You've got that right safety culture. So, you know, that when the photos are taken anyway, they're going to be wearing their hard hats and glasses, but I do know of certain employers that go, we'd love you to post, um, just so you know, like LinkedIn loves it. When your employees post as well, it gives you more juice. Um, so people do like it, but they're saying, but when you post, we want you to make sure you've got safety, the place is clean, everything's looking really good. Well, I think that's a challenge, a new challenge. Okay. It's starting to spread now. People finally realized your cell phone, a post is free picture post free. You're not paying for it. So I think companies, their challenge will be make sure what you put out there represents who and what we are in the proper way of doing it. And that's going to change. I mean, if people are, like I said, I've, I've engaged people here last night and earlier this week about, Hey, I love the fact that you're posting. Let's, can I encourage you? To think of safety when you're posting, can I encourage you to take a look at it? It's going to change. People are going to get aware of that because it's still the wild west with your cell phone and the internet. It's the wild west steel and LinkedIn and Tik TOK and Instagram and Facebook. That was a lot of platforms to control, and there's more going to be coming down the pike. So companies will probably start engaging policies, what they can't in. I'll tell you what, how many people, when they go to hire people, look at these people's social media. They're hiring somebody and they see that they're chugging, you know, a gallon of tequila and running in the middle of the street naked. Yeah, you're not hiring that guy on a monday night, especially after monday night football. So the employee employer thing is quite important to me because I do think more people are going to hop on this a little bit more. And I think it's quite valuable. More people are going to be posting and that isn't just under the business accounts. People are going to be posting as individuals. I already are. I mean, Tim rid of us is in the crowd there right now. You know, he's obviously representing Shapiro next to Judy as well. You know, they're posting quite a bit. Um, they aren't necessarily representing Shapiro, but they're representing the industry, right? So I think it's really important as an employer, if we can help in some way, as I said, it doesn't have to be guidelines. We're not restricting them, but we're saying if you're going to do this, we love that you're doing this because you're playing a part. In, um, improving the, the way that we're, we've viewed as an industry. We'd like to give you some tips on how we can do it. That's going to be coming. It's, it's, it's employee behavior in the workplace. There's no different, you know, HR at, you know, you can't do certain things in the workplace, right? It'll, it'll go into the social media platforms as well at time. It's going to happen. George, we're talking about challenges ahead. Yeah. Can you think of any trends that kind of this industry is on? It might lead to challenges, but any trends that were on there that we need to think about, um, innovation that we could kind of consider as well with that in mind, um, what sort of trends can you see happening in this industry? Trends for market, trends for equipment, trends for absolutely any way you want to take it. Kind of, um, you know, it can be any of those markets. I'm not going to ask you to predict the future on the market. I'll start with markets. I mean, again, I've said it many, many times, you know, there is tremendous new capacity coming online. And, um, and so I believe, you know, right now, if you look at new steel, right, new steel is very high. I think steel mills are enjoying the greatest profits that they've ever got. You know, they're having like my March back in 2005 or, uh, Yeah, 2005 when I shred it, steel mills are having that every month now, right? Most of them because prices are so high. You get 232, you've got all these different things that have stopped it, that have stopped the import of foreign, foreign steel. And so you add 15 million tons or 12 or 18, depending on who you talk to, but let's just pick 15 million tons. You put 15 million tons of new steel in this market. All right. Now that's not foreign steel. It's not affected by 232. Yeah. So the price of new steel is going to come down. It just has to, right? That's supply and demand. So the price of new steel is going to come down. Now you add 15 million tons of new capacity, the price of scrap people, those steel mills are going to need to buy that scrap. So the price of scrap is going to go up because there's going to be a shortage. I think more scrap will be imported from other countries. Other countries are going to stop, um, the, uh, you know, are, are going to fight to not let their scrap be imported. Which means I think scrap or recycle materials or repurpose materials, whatever we want to call it, is going to travel long distances. And so I think the price. Of scrap is going to come up. I think the price of new steel is going to come down. I think the margins are going to definitely get squeezed in the future. I think that it's a huge trend and I think material is going to be falling, you know, traveling much, much farther distances. And so the, uh, you know, I think as far as equipment and that kind of stuff, look at AI is coming, I think a lot of us or all of us are going to be using robots for picking, um, uh, on our downstreams, I mean, I just think that's coming and, uh, the, uh, I think there's tremendous technological changes, you know, coming there. What about traceability? I mean, in the supply chain, everybody's talking about traceability and that's all good and well, but they don't buy scrap. Like when we're buying it, it's coming from every different avenue. Right? So how does traceability play a part for us? Well, I think that the, I don't think we have to necessarily trace that it came from. This auto wrecker or this industrial account. But I do think the steel mills or the cast houses or smelters have to be able to be able to trace and know that this is 100 percent scrap, right? 100 percent material that's being recycled. And the, um, and so that I think they're going to need to be able to do. I don't know that we need to get down to the nitty gritty of, of where the material is. Although technically like cars, as an example, you could use. You know, bin numbers that are scrapped because you keep track of cars being scrapped when you're taking them out of the thing. You could track cars being recycled, certain types of cars and manufacturers of cars. So, you know, as far as tracing it, I think mills want to know who their supplier is and they want to know if something goes wrong with a melt, where are they pulling it from, but where did it come from? But to go all the way back to the initial source, I see that as completely burdensome. And, uh, A huge cost to that. And I think, you know, our facilities, we receive a lot of materials, right? Not everything in the, everything we receive is considered great stuff. And so sometimes we, we receive materials, but we know where we're getting it from. So we can go back to who gave it to us and give it back to them or what have you. But it's still our jobs to prevent anything bad from coming in. Mills are going to be the same way. And to trace. You want to know who your good supplier is. You're tracing in a like novellas, uh, be a toll us, you know, they're, they know when they put a bail, what, what's coming out, they know the recovery. So they are tracing their suppliers through their packaging, through the bales of aluminum or for the, the, uh, Twitch, whatever they're buying. So I think ultimately the consumer knows where their products coming from. They're going to trace it back to. When there's a problem to who supplied them that material now us as yard operators I don't know who if i'm going to be able to trace back who brought me that refrigerator that had a dead rat in it You know and got somebody sick. I don't know how that To me, it doesn't mean they're not going to ask for it. So i've already been asked on numerous occasions Can you trace where this material has come from? Um, and that's where kind of how do we? Play a part in this decision making because The rest of the world doesn't necessarily know what we do. So when they are buying it's well, what is this material? Where is this material coming from? And what I worry about is that they seem to think that that's easier, you know, said than done. Well, it is easier said than done. Sorry. They seem to think it's easy and it's going to be very difficult for us, if not impossible for us to manage. Regulation is that way anyway. Oh yeah, you can do it. Well, it's already Let's just sort out your microphone. Where's the mic? At Georgetown. I think they didn't want to hear, the sound guys didn't want to hear from you. Um, just check it again. Alright, here we go. Maybe I need to get to it. Yes. I'm kind of spotty. Go ahead. Okay. So, there's, we're at an ISRI convention, 7, 000 odd people, and, This is a great opportunity for collaboration. Like I love that this industry compared with 25, 30 years ago, even 10 years ago, we collaborate a lot more. We are hyper local, which means we're only really competing with the people in our area because the value of the metal has to be worth more than the cost to get it somewhere. So you're not really competing with people in other states. So we can collaborate and we do when we started to. Other opportunities that you've seen for us to be better at that and and what should we be doing to kind of Be better at that collaborate with other collaborate with other industries. Well, it can be industries but also with other Operators so scrap operators, right? So well george, you are classic. You are a collaborator How many people do you let come in to see what you're doing? Never you you don't george is an open book and and I've learned from being in his facilities as well as some major players in this industry have toured his facility. So that's the collaboration I'm thinking about. So certain stuff like we don't think of a competitive advantage. And so things like, um, stormwater, um, air, you know, I don't feel like is something I feel like for the greater good of our industry because when one people, when, when One of our members has a huge public problem. It looks bad on all of us, right? So like at Terminal Island, you know, the, um, we have our, we have regenerative thermal oxidizers, right? RTOs where we're burning the gases. And so we've, I can't tell you how many people have come in to look at ours. You know, we've been an open book on that. Our stormwater program there at most of our yards. Um, you know, we let anybody come in and look at what we're doing on stormwater to, to try to help them. Um, and so, uh, You know, I talk about fire safety all the time about getting down to the ground on piles and stuff, because I think that that helps our industry. And so we certainly collaborate that way all the time. You're not necessarily going to show, you know, your latest new technology, unless you're selling equipment like Johnny is, but you're not going to show your latest, you know, technology developed. But I think that for the greater good of the industry, I think those type of Things I almost look at as public service, you know that what we need to do to make our industry better So for instance, they're literally a half a mile down the street from us. We're competitors Okay, we throw punches at each other every day It seems like but you know what we learn from each other what what kind of sweeper? What what are you using to to use in our facilities to sweep up the dirge vacuum sweepers how important it is? Well, he showed me that we use that now now our storm water We have got to baseline to where we can infiltrate now and not be a discharger stormwater, and that's collaboration amongst what, what we can do to be better as a whole, as an industry, because it really is true. If something happens down at his street, down the street at his facility, it's coming back to me and vice versa. So, Hey, let, let us work together to keep people off our backs, to be safer, cleaner, you know, environmental stewardship's important to all of us because. He's under a microscope because he has a shredder in California. Well, that means all of us, they're coming after us sooner or later. It's not his fault that he had the shredder, but it's talking about, Hey, how, what are you doing to keep your facility clean? The vacuums sweeper. That's just an example of what collaboration looks like in all over this country. And I think it's important to reiterate on that because. If George and John are letting opposition and other people in the industry tour their facilities, there's absolutely no reason why any of you aren't. Like, I know there's maybe, I'm going to make up a percentage, but 80 percent of you out there. Don't allow people into your yards if they're in this industry and that's very common practice Like it's just you can't come in because we have you know, we have these secrets There was somebody on my podcast a few weeks ago. And um after she was on her father because she was the second or third generation Her father contacted her and said Why did you do that? You've just given away all our secrets Like those days are gone guys, like help collaborate work together If we as an industry are going to do better, we have to do it together Well, I agree, you know, look, I love people coming to my yard because I just say I'm proud the way we keep our yard. My dad's nickname was Mr. Clean Okay, well, we we've we've kept that and our yard is a very clean yard You could drive through it It's like I said, it's swept. It's a very clean operation. It's my, my, I feel that people can be encouraged that this is how a yard can be kept. And I'm learning from other people who do other things to make our operation better. So these types of collaboration, I think it's imperative for everybody in this room. You know, I have friends all over the U S so does George. Why aren't we trading best practices, our BMPs, because we're going to be better. And if once our industry gets better in that way. Things start changing the narrative to a better way for us When I wrote my book, I can't tell you how a bunch of people in the company said you're like giving away all our secrets You know, why are you doing that? Okay, I I give it I give it away to everybody, you know the um, Uh to uh, it's a scrap expo. I think I gave away like 300 copies last year Yeah. And I think it's the only way to make ourselves stronger as an, as an industry is to get together and work together. As I mentioned earlier, you know, even if you don't want to show your opposition, we're not asking you to invite the person who's maybe next door, who's buying from the same trade as you, you don't have to do that, but reach out to people in other areas, work together where you want. Kind of a jokingly way, but if you have a real clean, really super clean operation and your competitor doesn't invite them in, so now he knows he has to spend money doing something over there so you can cause your competitors spend some money. So one of the big, um, talking points when I traveled the U S recently was, um, the workforce. So it was getting enough. Yeah, exactly. You're pulling that face immediately, getting enough of the right people in this industry. What are you, George, how many people do you employ? I think we're at 34 3500 right now. Okay. So what are you doing to ensure that you have um, People coming through all the time, you know that that means when they're inside being developed To come through into management roles, etc And also bringing in from outside. I want to hear obviously from both of you on this But george you've got a huge amount of people You must have some sort of process that you're doing or or something you're doing to keep them coming in. Well, okay First things first, right I believe with all my heart that our employees are the people in our company are most valuable asset, right? There is no company without your people and so And then you've got to honor those people, right? You've got to treat them right and and you don't just can't just talk the talk. You've got to walk the walk, right? You've got to truly believe that these are the most important person people In in the world to you, right? Every single employee in my company has my cell number every single one Okay. I mean, if we buy a new company, I go into the lunchroom and I write my cell number on the board and you'll go back years later. It's still there. Okay. Everybody gets a copy of my book with a letter that's got my cell number in it. And, uh, and I print my cell number in the cover of the book. And so all my employees can call me and if they're unhappy with something, call me. And so the, um, I, I think. You've got to treat them right. You've got to be accessible. You've got to incentivize them. You know, we have a bonus program, which all employees participate in, in different ways. And, um, uh, and I think you've got to be there for them and I think you've got to treat them right. You've got to take the high road, right? I, I tell my HR department all the time within doubt, if in doubt, just err on the side of the employee, there's nothing to talk about, right? If you're not sure how something go err on the side of the employee. And so they are your most important asset, hands down. It's not location. People talk about all this crap. It's your employees. So my opinion, that's look, I totally agree, but that's great when they're in, how are you bringing people in? Because there's always going to be churn. People are going to leave. You need more people or you're, you're growing. Well, okay. So what we're doing, first of all, if you have a company culture that your employees feel like George is making them feel part of a team, right? I feel the same way. My dad told me as a young man, getting into the business, you treat your employees with dignity and respect start there, but what we're doing, we're using social media to show, because we celebrate our employees. We put them out. I got Vanessa over here. She's got some killer new posters that are going to be coming out because we celebrate our people. And when you show it and they're out there and they're friends and family, they go, that's a cool post of you out there. They get, there's a sense of pride that goes with it. So attracting talent. Okay, keeping it is one thing, right? You got to do the right thing. You got to pay them, right? But to attract people have got to know they that that company looks cool You know, I think that's a great industry to work for and if you're not messaging That that's why again, I put my forklifts out there. Why no scratches? I want to attract people who want to come to work in a facility that cares for the equipment You got to put it out there. You can't be the best kept secret in your community. I can, you have to get out there and show people, Hey, coming to work for Sierra is a doggone good place to work. The culture is good. The environment's good. Safety is important. Equipment you're going to operate a safe, clean. There's a sense of pride that goes with that. And that's what I, that's what we're doing. I saw the pictures. I remember you posting with these machines still clean, no scratches. It's like i'm not sure what country what world this is from but those were incredible even george was shocked Yeah, they're impressive. I I gotta agree. So And what about bringing people through right? So, I mean just to touch on what you're talking about I I went to visit alter trading obviously jay michael robert and Really? Yeah, michael's over there. Jay was here earlier Um, they got people 30 40 however many years that stay forever lifers, right? You And that's all good and well, and that's what we're talking about now. And that's incredible. And it's about having that culture, which I think they've got right. And you guys have got right too. And I think for anybody out there listening, really getting that culture, right, we'll keep your people. But how do you develop them internally? Like there's not the, yes, it might be scrapped university, but once they're in the, in the operation, how are you training them, making sure they can progress or have the opportunity to progress? Look at we always try to promote from inside, you know, we're not trying to bring people in from the outside unless there's just nobody else that we can find from that. So we try to promote from the inside and we try to give the people the opportunity to encourage them to move up, you know, to do different things. And, uh, we'll have people shadow people, um, we'll have people train with them. And then, you know, as we're acquiring new yards, then we'll allow people to move up into them. But Look at attracting people is the most difficult thing hands down and especially in our industry And as much as you want to glamorous you want to make it um the uh people still look at it in the wrong way and so You know, we're using Luckily for us. We have a really good reputation and so It's easier for us to hire experienced people because they know the name and they know sa and so You know You know, people want to come to work for us because they know how we treat our people. It's harder people that are outside of the industry. But it's interesting that how today with social media, how many people do the research before they go to work in a company? I can't tell you how many people I talked to that have gone on our website, listen to our speeches, listen to speeches of our of our people and you know, that are that are on there and make their decision to come to work with the company because of what they hear and read. Yeah, you know, I want to do what we do as well as sir. We show the employee, you know, promote within We also give like our technicians for the people who are out installing our equipment. You can't hire them Uh, you can't hire a tech who knows how to work on your equipment We bring them in as tier threes and they have a skill though You get to hear and your pay will increase based on your capacity And those are good paying jobs and it's same in the factory. So You You know, an apprentice welder is going to make X, but when you become the master welder, you become a lead of a fabricating frames of our two Ram balers, for instance, that guy has a pay scale and he knows that when he starts what that is, if I, you know, want to aspire to be that guy, I know I can make this. So we're doing that as well. Yeah. It's important for them to see their journey, where they can get to that can motivate them all the time. And what George was saying about bringing people in it kind of comes back to us all working together again if we want to attract The next generation we need to be we need to put out a really good Picture of what we do, you know, we need to show that we're safe. We're clean We're having an impact on the environment that will help us attract in general. And also what george said was You know, we're surprised some people are surprised by how many people are doing their research before applying for a job I think everybody's doing their research now before applying So if you haven't worked on your website or actually on your own persona or kind of what your business looks like outside There's a good chance you're struggling to attract any of new recruits. Well, not everybody does their research. We've we we were hiring for a location for uh rsm and uh So one of the first questions on the interview is, well, what do you know about our company, somebody else? I said, they go, well, you know, they didn't go out. They didn't, they didn't do their research. Well, guess what? They didn't get the job. Oh, they weren't even, it was over with it. We interview was over in 10 minutes because we went, you know, if you're not going to come prepared, you don't want to see who you want to work for. Why, why are you here? So the right candidates will do their homework. So it's kind of, make sure that you're putting out the right picture because the right people you want and we'll do the homework. Guys, we've got 10 minutes left and we do have a hard stop because this is the first time we've ever done a podcast live. Um, and the first time is reserver had the stage up before I wanted to open it up to hopefully one or two questions, depending on how long they go. Um, does anybody want to ask a question that we maybe haven't touched on yet? Somebody's got to have a question on the right. So the question is in anticipation for electric vehicles coming, obviously more prominent. Um, what, uh, what do you recommend we do to, um, I guess, avoid the issues that we could have with that. Is that right? How do, better do we prepare for EV? You're the one who's going to be handling a lot more of them. Yeah. Look at, I, I, I think that's still a learning process. You know, uh, The um, a car with a lithium battery inside it that's not just charged as a bomb, right? And if your guys do it wrong, it's really easy to get killed. And we've taken a lot of them apart. And you know, you've got to have really specialized people to know how to do them. Now, obviously, if you discharge it, it certainly helps it. But, um, I, I don't know that, They've exactly that there, that there is the best way to do it. That's not super labor intensive, you know, that you would, people would almost have to pay you to take the car by the time you're going to, you know, hire the people to really take it, take it apart personally. I just want to shred the damn things, but, uh, you know, my environmental people are telling me like, not only no, but hell no, but maybe when someone's not looking, I'll try putting one through there, but, uh, Look at, I don't think there's a really economical way to do it right yet. And I think there's still a lot to learn. I think Israel is doing a couple of seminars on this thing here. I know a bunch of our people are going to them. And so, um, I, I don't, I don't know that we as a company have the right plan yet for that, and we're still studying it right now. Those kinds of cars get set aside. Do you want to say something, John? Sorry. I thought you know, I just think it's a great question. I think my thought process would be the manufacturer of these batteries. Have to be part of the solution because it's really being dumped upon the recycler, the people who operate, you know, the materials, uh, recycling facilities like ours to figure it out. If you're going to make a product so great, figure out how to end a life it as well. Yeah. But it comes back to, it comes back to what voice do we have if we're not together, if we're not cleaning up our act, you know, with what John's doing at the moment, if we're not helping John. Really progress in the way that we viewed globally We're not going to have a voice of these things and they're just going to do that I mean they won't listen unless we really have an impact on our change and the way they're reviewed Just got to get involved. Um, we probably got time for another question If anybody else had something for these guys, there we go in the buddy cap. I can't hear I can't hear Could come up here so we could at least hear How can he get a copy of George's book? You know, if you just email me, I'll send it to you. It is on Amazon, but I really, I don't, I don't necessarily, I mean, it's there just so people get it, the book's called create the connection. But if you email me, it's G Adams at SA recycling. com. So, you know, our company is SA recycling. It's just my first initial G Adams at SA recycling. You email me, I'll send it to you. Obviously you can buy it on Amazon, but. I don't, uh, I'm not trying to sell my book or make money. I put it on Amazon so that people that didn't know me would have access to it. But if you email me, I'll send it to you. Yeah. Let me D Adams at S a recycling. com. So people ask me where they can watch repurposed. Yes. It's on Amazon prime, right? Great. You could get it for free on the Sierra YouTube channel. Yes. If you guys didn't know that, and that's a great way to get it out to family members, staff. On the Sierra YouTube channel. Now our Sierra or the Sierra app, if you download the Sierra app, it's you, you, you can actually watch it right on your phone. If that's what you want to do. So, so I have a question since we have like one last minute. Okay. For really both you guys. So now that scrap is a bad word. Is it going to be pile of repurposed material? Is it going to be born repurposed material? Just curious, you know, well, we're actually talking about, um, cause Abby Goldstein, Michael's wife has been doing a lot of, um, Clips on LinkedIn lately and taking over his role and we were trying to work out him and my wife Um, we're gonna do a few clips and work out what their name is. So it was gonna become material girls It was gonna be iron woman or material girl. So Michael came up with material girls Well, I'm just gonna drop the S and scrap, so it'll be a pile of crap. And I'll be born crappy. Alright guys, thank you so much. It's been lots of fun. I'm glad we got up on stage and hopefully we do this every year. Alright, Stu, great having you. Great being here, man. Thanks.
