Article by Kent Kiser, associate editor of Scrap Processing and Recycling. Part of the Evolution of the Industry series. Originally published in March/April 1993.
Trade associations, like people, have life stories – unique personal histories full of goals, challenges, victories, defeats, and camaraderie. Also like people, trade associations mature and change, often becoming as integral to the industry they represent as the members themselves. Such is the case with the Institute of Scrap Recycling Industries (ISRI) (Washington, D.C.)
Born in 1987 as the only child of two parent organizations – the New York City-based National Association of Recycling Industries (NARI) and the Washington, D.C.-based Institute of Scrap Iron and Steel (ISIS) – the 6-year-old ISRI is technically a newcomer to the trade association scene. This “newness,” however, belies ISRI’s rich past that can be traced to the early 1900s through its predecessors, which include NARI’s former incarnations as the National Association of Waste Material Dealers (NAWMD) and the National Association of Secondary Material Industries (NASMI).
Each decade has required ISRI and its forebears to change and find new ways to serve members. In this sense, these trade associations are like mirrors, reflecting the most-pressing concerns of their members through the years. In essence, therefore, the story of ISRI and its predecessors is the story of the scrap industry itself.
Prior to 1913, the scrap industry was chaotic – that is, it was unorganized and had no standard practices or specifications – according to a 1963 issue of Scrap Age. “There was almost a complete lack of communication between dealers,” the magazine noted. “Individual action was the rule of the day – even in the most important developments facing the trade. A few dealers in various parts of the country cooperated at times on the larger problems, but generally speaking, each preferred to go his own way and handle his own problems.”
In March 1913, however, 40 processors brought order to this chaos when they met in Boston to found NAWMD. Charles M. Haskins, manager of the waste material section of The Commercial Bulletin, hosted this historic first meeting, which was rife with skeptics. “This attitude of caution was not surprising,” Scrap Age explained, “since these industry pioneers of a horse-and-wagon era were robust individualists – self-made men who depended upon their own ingenuity, men who had made their way through great individual efforts and sacrifices.” Still, the founders recognized the benefits of uniting the industry, so they forged ahead and chose Theodore Hofeller, a Buffalo, N/Y/-based dealer, to lead the association in its first year.
NAWMD’s primary goal was to establish standard scrap specifications, which, though modified and expanded over the years, remain an integral part of ISRI’s current Scrap Specifications circular. Other services soon followed, and by the time NAWMD moved from Boston to New York City in 1919, these included a credit bureau, a traffic department, and arbitration assistance. The association had also expanded in other ways by this time, growing to 200 members, raising membership dues from $50 to $100, and forming several regional divisions. In the years that followed, NAWMD established commodity divisions to represent its growing membership’s diverse interests, including the Waste Paper Institute, Cotton Rag Council, Wool Stock Institute, Scrap Rubber Institute, Secondary Metal Institute, and Metal Dealers Division. And by 1923, NAWMD could be considered a truly international association, with 100 of the leading secondary material firms form 16 countries as its members. The group’s cosmopolitan character was enhanced in 1925 when Egmont L. Frankel, Frankel Brothers Ltd. (Toronto) became the first president from outside the United States.
The Birth of ISIS
In the late 1920s, ferrous scrap dealers and brokers felt the need to form their own trade association. Thus was born ISIS in August 1928, when 21 scrap executives met in New York City to discuss scrap quality and the problem of “direct dealing” – a policy at some mills that required companies to turn in scrap steel to get new steel. Charles H. Lipsett, publisher of Waste Trade Journal, suggested forming ISIS to address these and other problems, and the association was launched with about $7,500 in contributions. Led by first President Joseph H. Hitner, Henry A. Hitner’s Sons Co. (Philadelphia), ISIS became a quick success, attracting 300 members – at $50 a year – and forming 12 local chapters in its first six months of existence.
ISIS soon found itself mired in the Great Depression, however, which financially threatened it as well as NAWMD. Still, by 1932, ISIS had earned enough national recognition that President Herbert Hoover asked its leaders to visit the White House to discuss restrictions on banking credit and the conservation of natural resources.
The association continued to excel under the leadership of Benjamin Schwartz, who served as ISIS’s director-general, a staff position, for its first decade. In 1937, in fact, it was one of only 22 out of 2,400 U.S. trade associations to receive a Certificate of Recognition from the American Trade Association Executives.
The Road to NASMI
During the war years of the 1940s, NAWMD and ISIS leaders found themselves working hard on two fronts. Foremost was helping the country meet its scrap needs by serving on the salvage branches of the government’s War Production Board (WPB) – an effort that resulted in each association being lauded for its contributions at war’s end. Second, NAWMD and ISIS had to vigilantly protect member interests during this time of close government control of scrap supplies and prices.
In the late 1940s and early 1950s, NAWMD and ISIS helped their members through the challenges related to the Marshall Plan, Korean War, and Cold War. And when the world economy began to prosper again in the 1950s, NAWMD responded by forming a foreign trade division and expanding its commodity divisions and public relations efforts. The association also made one of the first moves in the “scrap is not waste” campaign that continues today, with its Waste Paper Institute renaming itself the Paper Stock Institute of America in 1958. A year later, NAWMD joined with ISIS to form the National Association Supply Cooperative (NASCO-OP), which assisted members in purchasing commonly used products such as gas, oil, acetylene, and propane. “While the association is helpless in directly providing better profit margins, it can – and does – assist members in minimizing their cost factors,” explained NASMI Executive Vice President M. J. Mighdoll, who directed the association from 1960 to 1986. Today, NASCO-OP (New Philadelphia, Ohio) still thrives, with 950 members, a six-person staff, and annual sales of $5 million.
NAWMD brought 1960 in with a big change, renaming itself NASMI. The association celebrated its 50th birthday in 1963, an event that President John F. Kennedy called “a bright chapter in our country’s economy” in a letter to the group. By this time, NASMI’s membership benefits included life and major medical insurance, workers’ compensation insurance, and more. According to Scrap Age editor Mush Oberman, the association represented “virtually every reputable firm in the United States and many from foreign countries. Where once it spoke for a small, unknown, and unrecognized industry, today NASMI speaks for and represents a $4.5 billion industry whose activities touch every area and facet in the modern industrial world.”
Tracing ISIS’s Steps
From the 1940s onward, ISIS followed a separate but related path to NASMI’s, confronting many of the same issues, such as discriminatory rail rates and proposed scrap export restrictions under the new staff leadership of Executive Vice President Edwin C. Barringer, who was hired in 1938, when the association’s membership roster included 550 firms.
In 1949, ISIS boasted more than 1,000 members and had committees on fair trade, public relations, specifications, export-import, transportation, and engineering. The group stepped up its education programs during his time, offering its first one-week training course. The course, held at Northwestern University in Chicago, taught the fundamentals of the scrap iron and steel industry to 222 junior executives.
ISIS’s public relations programs hit full stride in 1954 with the release of its first film, a 15-minute reel titled “Scrap: Steel Reborn,” which was distributed to ISIS chapters for showing to civic groups and the media. ISIS also expanded its safety efforts in the 1950s, introducing its annual “Safety Week” program, which helped it earn the National Safety Council’s bronze plaque award in 1956 for excellence in the preparation and presentation of safety material – a distinction it won at least five times. This work also enabled ISIS to secure workers’ compensation insurance for all of its members, augmenting its existing life insurance benefits.
Barringer retired in 1960 and was succeeded by William S. Story, who served as executive vice president until 1971. During Story’s leadership, ISIS assisted the federal government with one of the nation’s biggest problems: abandoned cars/ in 1965, in fact, President Lyndon B. Johnson invited 800 industry and government leaders, including ISIS President Harry Marley of Abe Cooper-Syracuse, Inc. (Syracuse, N.Y.), to attend the White House Conference on Natural Beauty. In the end, ISIS was instrumental in developing a supportive Highway Beautification Act that differentiated between auto graveyards and scrap plants. From this time on, ISIS urged its members to avoid using the word “junk.”
Also in 1965, ISIS formed the Metal Scrap Research and Education Foundation to help develop new processes and markets for scrap. The group continues to exist today as the Recycling Research Foundation under ISRI. The high point for the ferrous scrap industry – and ISIS – in the late 1960s, however, was the decision in the Interstate Commerce Commission proceeding titled Ex Parte 259, which reaffirmed that scrap is competitive with iron ore and must be charged accordingly by the railroads.
Entering the Environmental Age
In the 1970s, the terms “recycling, “ “ecology,” and “solid waste” came into vogue, and the scrap industry was called on to help improve the nation’s recycling record. “The scrap industry has indeed been placed on center stage and has, in fact, become a pivotal cog in any discussion of solid waste control, ecology, resource utilization, and environmental activities,” Oberman wrote in 1973.
In response to the newly recycling-conscious times, NASMI changed its name to NARI and adopted a new “chasing-arrows” logo. In its second year as NARI, the association started its tradition of commodity roundtables, with aluminum being the first commodity of focus.
Meanwhile, at ISIS, Herschel Cutler, who had served as the association’s transportation consultant since 1967, was named executive director in 1972. Publicly funded “recycling” centers became an issue, but the decade’s overriding issues were export controls, recycling tax incentives, inequitable transportation rates, and energy conservation. These challenges prompted ISIS – and NARI – to become more active in government and required the associations’ leaders to spend more time testifying on Capitol Hill, as well as sponsoring or opposing recycling-related legislation.
In 1978, ISIS reached a milestone – its 50th anniversary – and it celebrated by commissioning artist Mark di Suvero to create a sculpture out of scrap iron and steel. The artwork – titled “Isis,” of course – was dedicated at the Hirshhorn Museum in Washington, D.C., and was displayed there until 1992. It’s currently on loan to the Nathan Manilow Sculpture Park in University Park, Ill.
The simultaneous inflation and recession in the early-to-mid-1980s leveled the scrap industry with soaring interest rates, low scrap demand, and operating cost squeezes. As a result, ISIS and NARI both lost about 25 percent of their members during hese difficult years, recalls NARI Past President Stuart Padnos of Louis Padnos Iron & Metal Co. (Holland, Mich.). In fact, by 1986, ISIS had only about 1,200 members and 16 employees, while NARI had just 800 members and an 18-person staff.
On top of these poor economics, the government accelerated enforcement of its major environmental laws, such as the Resource Conservation and Recovery Act (RCRA), Superfund, and the Toxic Substances Control Act. Consequently, ISIS and NARI had to become even greater “activists” to ensure realistic treatment of the industry under the new laws and regulations.
Though the idea of an ISIS/NARI merger existed almost from the moment ISIS was formed, the issue intensified in the early 1970s. NASMI President M.D. Schwartz of Pacific Smelting Co. (Torrance, Calif.) asserted in 1972: “To not create a comprehensive and federated organization would be a terrible tragedy. . . We cannot permit ourselves to regress to the conditions of former generation sor allow our industry to recede to the position which it held 20 or 30 years ago in our national economy.”
Despite Schwartz’s plea, the proposed merger was set aside for more than a decade, though several attempts were made to join the groups along the way. In the meantime, ISIS and NARI tried to work together on some industry problems.
In the 1980s, several factors underscored the need for an ISIS/NARI merger. For starters, the harsh economic conditions at the time made membership in two associations a growing burden on many recyclers. More important, however, the scrap industry needed a unified voice to respond to the growing volume and increasing stringency of existing and proposed laws and regulations.
So, finally, in 1987, the 73-year-old NARI and the 58-year-old ISIS decided to become one. Their progeny, initially called ISIS/NARI, became ISRI in July 1987, with offices in Washington, D.C. NARI President Howard M. Meyers of RSR Corp. (Dallas) and Bayou Steel Corp. (LaPLace, La.) – one of the “architects” of the merger along with ISIS President Sandy Shapiro of Cambridge Iron & Metal Co. Inc. (Baltimore) – remarked at the time: “We believe that, with the combined strength of both organizations, our industry will be able to exert even greater force in the future to achieve our mutual economic and legislative objectives.”
Now, six years later, most recyclers seem to agree that the merger has been a success. “The reason the merger worked is that the members of both associations truly wanted it to work,” says Cutler. “It wasn’t a marriage of convenience; it was an undertaking of commitment. There was no prenuptial agreement in case the merger failed. Everybody was committed to making it work.” Richard E. Abrams of B. Abrams & Sons Inc. (Harrisburg, Pa.) – and ISRI’s first president – observes, “The merger has given recyclers a much more effective association. We’ve now got a more unified, single organization that truly gives the industry one voice.”
As the offspring of ISIS and NARI, ISRI incorporates attributes of both, such as ISIS’s chapter structure and NARI’s commodity focus. At the same time, it is different from them, both externally and internally. “In the early 1980s,” says ISIS Past President Morton B. Plant o Key wall Corp. (Baltimore), “ISIS put out fires as they came up, but now ISRI looks ahead to put them out before they start. Also, ISIS wasn’t nearly sophisticated then as ISRI is now.” Stuart Padnos recalls that NARI’s main efforts a decade ago “were to find out what the government could do for its members. Now, ISRI’s main efforts are to address the effects of existing laws and regulations, as well as anticipate new governmental actions.”
Internally, ISIS/NARI has seen its staff go from 34 – reflecting the combined association staffs at the time of the merger – to a “skeleton crew” of 16 in ISRI’s beginning months to 37 today. That current number reflects employees added primarily in the areas of publications (one of ISRI’s first acts following the merger was to purchase Scrap Age, which was soon renamed Scrap Processing and Recycling) and government relations, which deals with the ever-expanding legislative and regulatory issues facing the industry. As an example: Whereas ISIS and NARI each had one or two employees to address government matters, ISRI now has a government relations staff of seven full-time employees and works with several consulting and lobbying firms on retainer. Will ISRI’s staff continue to grow? Abrams and Cutler think not, noting that current staff should be able to meet member needs for some time to come.
Other internal ISRI changes have included expanding former ISIS and NARI committees, forming new committees, and embracing NARI’s Paper Stock Institute of America as its national PSI Chapter. ISRI’s most significant change, however, came in 1992 when it implemented a strategic reorganization plan to better represent the industry’s diverse materials and players. In these and other ways, ISRI has attempted to carry on the goal of its predecessors: to unite the recycling industry, giving it strength beyond the capacity of individual firms.
Staying Ahead of Change
Much of ISRI’s immediate work lies in addressing the life-threatening environmental/recycling-related laws and regulations facing the scrap industry. “We don’t have the luxury of looking too far ahead now,” says ISRI Immediate Past President David Serls of Colonial Metals Co. (Columbia, Pa.) and L. Lavetan and Sons Inc. (York, Pa.). “We have issues that must be dealt with to secure the industry’s future, such as reauthorization of RCRA and Superfund. When they’re behind us, we can take a longer-term look ahead.” Abrams echoes this remark: “The association’s main priority will be to continue to serve the industry on environmental issues. The environment is going to be a major focus of the Clinton administration, so environmental regulations won’t get any easier to comply with.”
Though ISRI is focused on addressing the industry’s current concerns, it must be flexible to “meet the industry’s needs and requirements of the time” – whatever they may be, notes ISIS Past President Bernard Landau of M.S. Kaplan Co. (Chicago). In essence, ISRI’s mission is to stay ahead of change. “As time goes on,” Serls says, “the association will be further refined to better serve its members.”
ISRI has come a long way in six years, but it still has a challenging road ahead of it. “Are we better off today than we were six years ago?” asks ISRI President Arnold Gachman of Gachman Metals & Recycling Co. (Fort Worth, Texas). “The answer is yes. But we should also ask, can we be better off six years from now than we are today? The answer is also yes. The success of ISRI and the scrap industry as a whole goes beyond the progress we’ve already made. It’s what’s ahead that counts.”