Henry Lewin Schweich

Henry Lewin Schweich, Cerro Copper Products Company, St. Louis, Missouri. Interviewed March 1998. Courtesy of the Institute of Scrap Recycling Industries. Transcription by Speechpad.

Henry: If you go back far enough, my great-grandfather whose names was Sam or Shmuel Lewin came over to the United States with his son, William Lewin who was the founder of our company and they came from a small city in Russia or Lithuania. I think the border changed back and forth several times. And settled in Pueblo, Colorado. I found out last summer after my mother passed away that one of the documents that was in her safe deposit box referred to a Shmuel Lavine or Lewin who, when he applied for citizenship agreed to renounce all other loyalties to anybody else and including specifically the czar of Russia. So the name Lewin which has become associated with our family, with our company may be Levin or Lavine. We’re not quite sure. But I think it’s Lewin and we have been known as in various forms as Lewin Mathes Company etc. which I will get to.

My grandfather started in Pueblo, Colorado, William Lewin and he was in the scrap business as I was told pushing a cart in typical fashion. And then they moved from Pueblo, Colorado to Kansas City where my grandfather remained in the scrap business with a gentleman by the name of Cohen, C-O-H-E-N. Mister L. J. Cohen. And in Kansas City my mother was born and they remained in the iron and nonferrous metals business.

Herschel: Can I interrupt you?

Henry: Sure.

Herschel: How did the family get to Pueblo? Is there a story there?

Henry: I’m sure there was a story but I don’t really know what it was. It predated me by so many years. But after the Kansas City venture they came to Saint Louis and were partners, my grandfather William Lewin and Mister Cohen until Christmas day of 1918 when a train hit their car on Christmas day and Mister Cohen was killed. That began the Lewin Metals Corporation.

Herschel: In Kansas City?

Henry: This was in Saint Louis now.

Herschel: Saint Louis.

Henry: They had by this time moved to Saint Louis for whatever presumably economic reasons they had decided to do so. So 1918, what had been the L. J. Cohen Company Lewin Metals Corporation. And at that time with Mister Cohen dead my grandfather brought his brother whose name was Tanne, T-A-N-N-E, Lewin also into the business.

Up until this time as I understand it most of the electrolytic refineries in the world were devoted to the smelting, refining process in primary mining companies and at that point nobody had been in the secondary business but Tanne felt that the molecule of copper was a molecule of copper. So they established in the very early 20s a pilot plant and subsequently an operating plant. In 1927 we established as far as I know the world’s first secondary, exclusively secondary copper electrolytic refining operation with patents in what is then was Monsanto, Illinois and has since been renamed Sauget, Illinois named after a family member.

But the refinery continued and it was successful and we have…or the company had patents at that time on the refinery which remains to this day and as far as I know is today the world’s only electrolytic refinery which uses nothing but scrap and is totally secondary in feed. There are several others. One in the United States. Brixlegg in Austria but they also use primary. But ours is strictly a scrap fed electrolytic refinery.

My grandfather who was undoubtedly genius and a brilliant man retired at age approximately 42 for ill health in order to be able to play the horses in Florida. And he had rather an interesting lifestyle. He spent six months in Miami, Florida at the Hialeah Track and then his chauffeur drove my grandmother and him to Los Angeles where they went to whatever the horse track was in Hollywood Park I think among others. And in the meantime wrote letters of advice to his brother Tanne who was then running the business. And ultimately unfortunately died of a coronary while my grandfather was establishing his own lifestyle.

The business continued and I think that the next major thing of significance was in 1939 when we decided to go into building a copper tube mill.

Herschel: After Mister Tanne died?

Henry: No, Tanne was still alive at the time and other members of the family were still involved including my father who in 1928 married the boss’s daughter, married Dorothy Lewin in time for the Great Recession and to get his…at the time to get his salary cut progressively four or five different increments but he was lucky because, you know, he still had a job and of course in the Great Depression that was significant. But a lot of our family was in the business. Tanne’s sons, Dick, Bram and Roddy had been in the business. My father was in the business for his time and I, more or less grew up in the business although in 1939 I wasn’t all that interested.

But the tube mill was built just in time for the beginning of World War Two at which time our production was largely shell bands which are rotating…it’s a tube. They are bands of approximately this thick, circular and they go on the exterior of a projectile, a shell which we used in World War Two and I think we made something like 40% of the entire rotating shell bands for the war effort. We also made…

Herschel: I’m sorry. So the supply of the raw material during that time was a problem?

Henry: No, I don’t think so. We had the…the refinery was going by that time and the refinery produced what is now known as grade A or grade one electrolytic copper cathodes so that was a source of raw material and the purpose was then and is still to back up the efforts of the tube mill from a raw material standpoint which at periodic times in the history of the United States…there has been shortages and it’s nice to have an operation which is fed internally from hundreds and hundreds of scrap dealers throughout the country.

We made 90-10 copper nickel, we made 80-20, we made 70-30 copper nickel for ships. We made aluminum tube for aircraft. I don’t think we made a dime on any of this business by the way but it helped the war effort. At the end of World War Two of course we decided to go into plumbing tube and that was…in business you make a lot of decisions. Some are correct. And hope you make 50.0001 correct decisions and that was a major one that we made that was correct because steel pipe which had been the primary method of conveying water was becoming replaced and subsequently was completely replaced for all intents and purposes by copper tubing. And of course there was a boom period following World War Two and we were doing progressively larger and larger tonnages.

Frankly we were also in some other product lines which were not all that great. Brass rods and re-burned fittings which we did not do a great job at.

Herschel: The decision to do the plumbing after World War Two, was it a difficult one to come to or was it just a natural…looking at the most viable market…

Henry: I think it was probably…and I wasn’t there at the time so I’m going by history. I think it was simply a decision that was made either by Tanne with my grandfather’s concurrence that that was going to be a good market and because…and it over a period of time was progressively and totally replaced cast iron pipe. Decurrently is a serious threat of plastic but that’s a totally different discussion.

For those people who were nameworthy and I forgot to include the fact that in 1931 we merged with the G. Mathes Company and it became Lewin Mathes Company from 1931 onward. The independently operating fabricating company was bought by Cerro de Pasco in 1957. And the first day I ever worked full time for the company was the day of the merger, July the 1st, 1957. And it was part of…hence the Cerro name which in Spanish means hill. The Cerro name has continued. The entire corporation of Cerro of course was ultimately 1974, ’75 purchased by the Pritzker family of Chicago and is run in its various divisions as members of the Marmon group of companies which is a loosely affiliated group of separate companies all of which are owned by the Pritzker family in Chicago. And they make everything from the seatbelt that you flew up on, American safety equipment, the casters and you name it.

But I guess our personality…we have grown up in the scrap business throughout the entire history of the company and in addition to the scrap which is used for the electrolytic refinery we buy probably an equivalent amount of “low-grade scrap” which is fire refined and goes into…directly in the plumbing tube. So we have always been involved with the scrap dealers. I grew up…I had summer jobs when I was in high school, you know. So query 40 years or 45 years. I don’t really know but I’d always grown up in the business and I love the business quite frankly. I loved it then. I was…started full time after law school in 1957.

Herschel: What did you do when you began?

Henry: I did a…well, I can remember the discussion because in those days the going rate for Harvard law school graduate was $400 a month. And I went in for my interview with Felix Drier and Felix said, “Hank, you know, what do you think you ought to get paid to start?” I said, “Well, you know, Felix, the starting rate is $400 a month for, you know, for Harvard law school graduates.” And Felix said, “Absolutely not.” He said, “There’s no way I’m gonna pay you $400 a month.” I go, “Oh, my God.” He said, “You’re gonna get $700 a month. Not a penny less.” And I went home and I told my wife Esther, I said, “Essie, I am so rich. You can’t believe the salary that I’ve got.”

But I think I started, Herschel as I guess an assistant and I was an assistant in the sales department. I got…I was an assistant in the scrap buying department. I was an assistant in the tax department. I did labor relations. My first major job was doing industrial relations negotiating labor contracts which I guess my background suited me for. And it really was quite a diverse background and…

Herschel: Role based training.

Henry: Role based training. The issue of the kind of background that is good for this business is a real question and I recall that when I was in college I had a conversation with Tanne, Tanne Lewin and I really couldn’t at that time decide whether I should go to business school or law school and it was a choice so…and it was probably one of the most difficult choices that I’ve ever made really because I applied…I was fortunate and had fairly good grades so I got accepted everywhere which made the problem more complicated. And Tanne said, “You know, Hank…” He said, “I think law would be a good background for business.”

So for better or for worse I went to law school and in hindsight it was the correct decision because it’s a horrible commentary I think on our society that you almost need a legal background to be in business. And since I’ve been president I’m sorry to report that the law background has come in extremely valuable. Not that I go to court because I don’t but in terms of being able to select various lawyers and counsel for the vast array of meritless lawsuits which every business is subjected to as well as the vast array of meritless government activities with which our industry is constantly beset. And I have been fortunate because I love doing what I’m doing and I love the buying, love the manufacturing, I love the selling, I love the personnel, I love the growth and the commercial part. The part that I don’t love and the only problems that I have had in this job have been government. It is not my intention to give a speech but that is the truth. I mean, our threats to the viability of our company and the suppliers had been almost exclusively government originated. Usually without much merit.

Herschel: So you are very interested in General Powell this morning.

Henry: I was most interested in General Powell this morning and philosophically agree with really 90% of what he said. And there is an almost direct one on one correlation between the economic and financial success of a country and a society with freedom and economic freedom and loaded government. And for all the problems that we face we still have a much more limited role that government plays in our current society than do most other competing countries.

So it’s been a fun exercise with the exception of rigorous super fund antitrust. I mean, you can go down the whole list of problems that are created.

Herschel: One of the questions we’ve been asking everyone was what was the one or what were the one or two instances in your professional career that really made an impression as related to this industry?

Henry: I think the most…well, there are a couple of things that are satisfying. One is when I bought 20 tons of scrap metal. I’ve been gone from the company for a few years, came back from Jake Sellman [SP] and my grandfather who was in the scrap business bought scrap originally from Moses Feldman who started commercial metals company. So I had been gone for a couple of years. I understand that Jake wanted to make a sale and by this time we were buying 12 million pounds a month of scrap but this was 20 times that. He and I got on the phone and I bought just 20 tons. He got to me a little bit. He got next to a half a cent but we did it. Other than that I think the fascination of the copper business and where I think we at Cerro have a really unique advantage is the exposure you get to the world of copper and I’m gonna lead up to an answer to you here. [inaudible 00:17:48] fashion. Because we have access to hundreds of scrap suppliers we have input from one whole source of raw material. We also buy from mining companies. We also buy blister. I also go to London once a year in order to be able to have if you will a world perspective on what’s really happening in the copper market and it frequently does not repeat itself exactly the same. But I think our perspective is good and it fascinates me, absolutely fascinates me that the mining companies have a certain mindset whereby they do not recognize and most of the media doesn’t recognize the significance of scrap in the marketplace whether it’s 40, 45 or 47% of the market. And that perspective has enabled us, our perspective to make a lot more money I think than most other companies. And I’m still gonna lead up to your question. Now is a classic example and when the market was in the mid-70s we felt strongly it was going higher because scrap was getting tighter and tighter, it wasn’t moving. There…we watched all of the exchanges. We watch the LME Exchange, we watch the [inaudible 00:19:10] Exchange, we watch the outcharges and we pretty well know what’s going on. So and we knew that there as a rail problem in Utah of significant proportion. So this has to translate into some strength.

Getting back to the answer to your question. And I give credit to the people who work for me. I had been to the annual London metal exchange dinner in the fall of 1987. In 1987 in the fall copper in all forms was getting into short supply. Primary, secondary, blissful, you name it, it was going into short supply. I came back from the LME…I think I was in an ISRI meeting in Chicago and our VP of raw material gets me out of bed at five in the morning and my immediate reaction was, “Why are you doing this to me? Boy, why are you getting me out of bed?” He says, “Hank, copper’s gone done 10 cents a pound on London.” He said, “Makes no sense at all.” And this’ll translate into [inaudible 00:20:10] drop. So I said, “Bill, this is insane.” So we started pricing copper. Not buying all new copper but copper that we have under contracts and we started pricing and pricing and pricing and we did that…I’m not talking about speculation. I’m talking about using common sense market judgment on it. And we priced…as copper dropped we kept pricing and pricing it and we never went beyond the first of the year or did we get beyond the copper tube backlog that we had booked or could book and we went into January of the following year, 1988 with a 85 cent metal cost in a $2 plumbing tube price and we made $8 million after taxes in January. By April we made 20 million after taxes and we went to the annual Marmon meeting and my boss came to the…Bob Pritzker came to the meeting with a Cerro T-shirt on. Yeah, and then later one of the group guys accused me of speculating which really was not what we did. I mean, we really…if he had done that we would’ve priced three months wrong because we do not speculate. But in a commodity business which plumbing tube is that was satisfying, making money. And I think, Herschel beyond that what is more satisfying is seeing younger people come up and develop through the business and through the industry and seeing their jobs, their salaries and their scope increase because we do at every level whether you’re executive director of ISRI or whether you’re the president of the company we do what we do through people completely. And, you know, I can give guidance, direction and some feel as to what I think you ought to be two years, three years and five years out but I can’t execute it all. Clearly we do this with people. And watching these people develop in a growing company is my greatest source of satisfaction. And watching the marks which are never listening.

Herschel: You’ve been in the business now a number of years. How has that ability to see what’s going on in the market, to understand it, how have the analytical tools impacted the ability to make a profit doing it?

Henry: They have made a huge difference because quite frankly when the Pritzkers bought Cerro my view is…I did not get this from Bob. They really were not comfortable totally with Cerro Sales which is a trading company which wasn’t their thing and they didn’t really like a commodity to business that much. Because in the fall of ’74 was…it was also losing money. We weren’t that well managed quite honestly. My predecessor who…Harold Lewin who you may know went to Bob and said, “Bob, is this company properly managed to make money?” Two things happened. Number one, he was a wonderful manager. Absolutely honest. Wonderful reputation and the economy picked up which is nice. And it started picking up in ’75, ’76 and ’77. And we ran what is not just…was not…at least in plumbing business is not just a fabricating operation. It’s a metal operation and that was Harold’s concept and that…since I came up through the buying route of the business really primarily raw material, that was my orientation as well and it makes a huge impact on profitability. It has to. You have to…it’s a real time business. You have got to know what’s going on. Our metal buying people know instantaneously even when they’re on an airplane they know what the market is. If something really significant happens our guys will get me out of bed if it makes a huge difference. But yeah. I think the perspective that you get in the copper business separates us from just a…the plumbing tube portion of it just in the fabricating operation.

Our company has grown and I think scrap will always be a major part of our raw material business.

Herschel: How does a young person come to work for Cerro? How do they get to know how to do this? Sounds like an incredibly sophisticated…maybe I’ll ask it the other way. How do you find these young people and what do you do to get them up to speed?

Henry: Major challenge. It really is because it’s an unusual business and the skill requirements are unusual. You can’t hire into the buying department a buyer of widgets and gadgets and parts. He may be a wonderfully professional person, he may do everything exactly right. There is almost an intangible feel or instinct for metal which you get when you have been used to watching for a period of time. Some people have it. Some people don’t. Our people now have a hunger and a feel for the business and it’s…

One example. Harold used to come in when I was in the metal buying and he would say, “I think the market’s going down. I think it’s going up.” And I go, “Harold, how do you know?” And he’d say, “I can feel it in my bones.” I’m like…I was thinking why are his bones so much different from my bones because I can’t really tell it? But I get those same feelings now too which is not…I don’t forecast copper prices nor did Harold but you do get a feel when you have Reuters behind you and looking at it for decades. You really…it’s not just Reuters. You…and I’m a fundamentalist. I’m not really a chart person head to shoulders. To me is…you have to know about it because it affects the thinking, the behavior of a market place over the short range. But essentially I’m a fundamentalist. And it’s more fascinating than any other job that I can think of because even today to do it correctly you have to be able to understand economies. What is China gonna do? You know, what is Asia gonna do? And what effect is that current depression gonna have on the copper in this correct market? When they’re really in the market they buy off the West Coast and we can’t possibly buy anything. But then in Japan, you know, they may buy four times what they need and they don’t buy anything for a period of time. How do you train this? It’s a…the old…the best…I would say the requirements Herschel for this person or people…and I heard it from the speaker before but you have to have absolutely impeccable integrity, you have to be straight, directly. Today, well educated, professional. You have to like the business and you have to be exposed to it. And of those people who are exposed…and I’m sure this is true in the, you know, wholesale scrap dealer industry. Some will take to it and some will not and you have to like it or not, you know.

Herschel: Our interview processes the personality sensing thing as much as anything else.

Henry: Absolutely, absolutely. And I think…I don’t think the personal energy will ever…again, ever’s a long time but the body language and the instinct and the personality and the sense of humor…these are all intangibles and we probably will almost never replace the individual interview. For people who are coming with Cerro and even executive…I usually let them to be screened by everybody I can think of. You know, if it’s in the sales area they’re screened by everybody in the sales area, all personnel department, background check out before I ever even talk to him. Then if he gets through this process then for…then I do in an executive level the final interview but a company, any company I think carries the personality of the top guy and I am uniquely fortunate to have worked all my life for totally honest people. I never met a Lewin that was dishonest, I never met a Shrike that was dishonest. We were bought by the Pritzkers and that’s a dream relationship in that all I have to do is what I do legally, do it honestly and make a return on investment. And in addition grow the company so that they will be passed on generations later. And this is so consistent with the way our owners operate.

Herschel: It’s incredible.

Henry: It’s wonderful. I mean, if I wanna build a $16 million plant in Mexico, Missouri, I decide I wanna build a $16 million billet casting facility in Mexico, Missouri. I run into Bob Pritzker by accident in London. I said, “Bob, I wanna build a $16 million…” I said 12. I want to build a $12 million plant in Mexico, Missouri. He said, “Tell me about it.” And I do and then later we do the more sophisticated cash…you know, paybacks and present value and all of these sophisticated things you do but it’s wonderful to be able to operate that way. Even if you’re buying a company. You can buy them and as long as you know what you’re doing and have a success record.

I would say that integrity, education and professionalism are important but you do have to like the business. And really even our buyers for example…it’s a weird job. I mean, I would be the first to admit. They go out and they go into the trucks and look at the rail cars. If there’s a problem, real or perceived with the material they’ll call the shipper, explain it to him, tell him what it is, send him samples, send him photographs, whatever we have to do. But it’s not every buying job where you have to get dirty and get out in the yard and see this thing. I do the same thing. I walk through the plant. I get more out of physically walking through than I do sitting up behind a desk.

Herschel: Let me interrupt your train of thought there. One of the things we were hoping to get as a result of this was some fun stories, interesting stories of things that have happened or apocryphal stories that you heard from others in your business. Can you think of one or two that would be descriptive of the earlier days of this business or even…?

Henry: Oh, yeah. I’m sure I can but…and these are not…these are older ones because what has happened to us now is we’ve gotten somewhat colorless in that we’ve gotten professional and organized [inaudible 00:30:39]

Herschel: I understand that and we’ve just…we’ve come across that as we’ve done these interviews.

Henry: But I have an uncle, Alan Bud Lewin who did the buying for many, many years and many of the viewers of this will remember my uncle Bud. And Bud was one of these…he had half of my grandfather’s sales ability and he headed our sales department, he handled our buying department. And when Bud was doing our buying you never knew what was gonna happen. I mean, we had…one day he admired a red fire engine in somebody’s scrapyard in Los Angeles. I wouldn’t believe this except that I know Bud. And all of a sudden one day there was this tremendous commotion in the plant and a rail car comes in and everybody’s out there unloading it and they’re scrapping it of course and there…by golly, there’s this red fire truck of Bud’s. You never knew what you were gonna get.

Bud…when I’d been gone for about four or five years and then I came back and I went on a truck with Bud and we wound up not…we call them scrap dealers but we also wound up where they were wrecking the Kearsarge, the aircraft carrier and Bud spent more time buying parts for the Kearsarge and he’s still in business in Saint Louis. He still…chandeliers from our country club were made by Bud from scrap parts etc. approved by an architect, very fine architect. So yeah. I’m sorry he retired. He had a drawer full of candy of various types. Cases of wine would come in at all time. And when he was head of the sales department he…I won’t mention the account but Bud was an incredible salesman. When we first went into making air commissioning tubes. We made a horrible product. I mean, we’ve been in plumbing tube. The requirements for making level once coils of air conditioners were a lot tighter quality. And we made a sale to…with a major…one of the largest US air-conditioning manufacturers. It went up there and got rejected. Bud went up and talked them into taking a second shot and it went up and the quality…it was really pretty awful stuff. To make a long story short, Bud [inaudible 00:32:57] three times in a row and it finally stuck the third time. Just sheer ability. He would go into a scrap dealers business and say, “I’m not leaving this office till you give me an order.” I mean, we don’t do that anymore. I mean, we really don’t. Yeah. I’d say by now we’re organized. We have four AS400s in our information systems. Everything’s on computer with the exception of our scrap operations. We’re still not totally…I do have a record. I mean, I could click in PC remote to the office to find who gives us how much business and how much but we still retain and try to retain the personal contact and the…up until two or three years ago I saw every final settlement that went out of our company.

Herschel: Really?

Henry: Yes.

Herschel: As recently as that?

Henry: Well, five years maybe. Yeah, I did. I like to find out who we were buying from, how much we were buying and if the settlement’s got really all of a sudden great, were they really getting great or was something else going on. And usually it was a change in the dealer’s source of supply, you know, buying more industrial scrap [inaudible 00:34:06] whatever. But yeah, I did. And it’s a hands on business but I think we’ve lost a lot of the color with the…

Herschel: Do you ever see it possibly coming back or is that…we’re gonna look at videos and read books and that’s about it?

Henry: I think…I don’t know whether that degree of color will come back. Certainly sales ability is a great asset. Dealing with people is the greatest asset which you can have. It’s still the most important executive attribute and mostly if people aren’t successful it’s because of the interpersonal skills, not because of what they know. I doubt if it will ever totally come back. I think what happened last year is going to be…continue to happen in the industry. You will get increasing consolidation of everything. You’ll get…on our customer base, the plumbing wholesaler, the air-conditioning manufacturer, you name it. Increased consolidation. We’ll get increased consolidation of scrapyards, of…and you’ll get increased consolidation with copper too, manufacturing operations. And when I first went into the business we had maybe two dozen copper tube manufacturers. Today there are six in this country, you know. And it’s like anything else in life. It’s a…there is no easy business really. It’s…

Herschel: I guess the more you consolidate, the more has to be standardized which takes away the…

Henry: Yeah, that’s…

Herschel: [inaudible 00:35:37]

Henry: Yeah, it is and it’s all…the information systems are incredible. I agree totally with Colin Powell. I think the…what is going on now is a major quantum leap forward and will be so to all of American industry. We just…it’s all activity based cost and the activity based management and it seemed very sophisticated when we started it but now that we’re completing it it’s nothing relative to the other computer programs that are done in other areas. But we’ll be able to plug in the what ifs. What if we do this, what if we made more of this or that, what if we expanded the plant, what if increased 20% here? And it’ll go right down through the system because it’s all programed into these models and the models have to make some sense and I think my virtue is I can tell them they don’t. You know, so if you get garbage in you will get garbage out.

But I don’t think you’ll ever replace the interpersonal relationship or the personal interview totally. But that degree of color is probably gonna be disappearing [inaudible 00:36:50] Yeah, it really is because we had an awful lot of colorful characters. One of the buyers that…like way, way back in our company. I understand he used to smoke cigars and he was in the second floor of the building and he got very excited. I forgot what the guy’s name was. And when he got really excited he put the phone down. He would scream. And he’d scream, “FOB, FOB, FOB upstairs. That’s where FOB. FOB upstairs.” But that guy…you know, that doesn’t go on any more, you know. [inaudible] place for it.

Herschel: What else would you like to tell us about you and the company?

Henry: Oh, I think that our company is going to continue to grow, continue to expand. We’ve got four plants, we’ve got the largest currently…our Sauget operation’s the largest copper tube mill in the world at 200 million pounds. We have been able to…through really the efforts and the foresight of our sales department and the people…we have a billet plant, state of the art in Mexico, Missouri. We’ve got Shelbina which…Missouri which makes level one coils, air-conditioning coils and has now become unknown to most the third largest level one coil maker in the world including the Japanese by the way and bought a plant in Bossier City, Louisiana which when combined with the Shelbina production puts them at approximately a 100 million pounds per year plus our 200 plus in Sauget. And I don’t know whether there’s ever an ultimate end of this process. It depends on keeping the…it is really. It keeps that…keeping your cost down. I read a letter written by my grandfather. One of the letters of advice he wrote…William Lewin who wrote to his brother Tanne Lewin. I use that as the basis of a speech to our sales department. And everything he wrote in it was as germane when he wrote it…that was germane today as when he wrote it. It’s keep your cost down, diversification. Your customer comes first. It’s absolutely true today if you’re not customer devoted whether you’re Walmart or sell copper you won’t succeed. You’ve got to satisfy his requirements first. He’s the reason you’re in business. He’ll determine your success. And I think given that there’s the opportunity that is available to young people today [inaudible 00:39:24] copper as one example of many is just unreal. The biggest problem we have is getting people of talent who will grow into the business and ours is not a unique situation.

Herschel: That’s what I was just gonna ask. How do you find these people? Or is it a difficult thing to find?

Henry: Yeah, it is difficult.

Herschel: Do you go out looking? Do you go to college campuses? Who do you look to see among your suppliers? Where do you find these people?

Henry: Well, all of the above really.

Herschel: Really? They do go through interview at college campuses?

Henry: We’ve had it for years with the Colorado School of Mines. We’ve had a relationship. We got some of the technical people from there. We frankly do not do as much of this as we should. We currently have everything…recruiters are behind this wheel and little people because with the growth it’s difficult to get people…it’s the biggest single problem not only of us but of all the Marmon companies who are honest and capable of growing into those jobs. So we go to our own people for recommendations. And we try to train our own which takes longer but seems to work out as well or better. But for anybody in this country, much less at our company to say there is no opportunity it’s mindboggling. And we will hire people without having a job for them. Then I am so protoplasm oriented if you wanna call it that that given the right capability of the person, we’ll find a job for them. I don’t mean we make work. We don’t have…if we had to cut staff I don’t know where we would begin and we are always “lean burn”. We don’t have extra people. But if you’re in a company that’s growing and is going to be around there’s just loads of opportunity. I’d rather have a guy with the capability and we’ll find a place for him to move.

Also I don’t have an organization chart. I must tell you.

Herschel: Really?

Henry: I do not have one. They…in our plant they have them but I think organization charts limit you and philosophically I like it when people do what they do best and grow to the greatest extent that they can and this results in some really weird organizational structures. If you try to map these you’ve got a lot of trouble doing it.

Herschel: [inaudible 00:41:40]

Henry: And incidentally this is also true of our orders generally because we’re…I think my boss, Bob Pritzker should have a PhD in ad hocricy or something like that. I mean, you do what works. I mean, they buy companies. When a company comes up and it’s available and it’s the right price there’s…you buy it, you know. And there’s no synergism to it.

So we do the same thing. I’ve got…when we built this new billet casting facility in Mexico, Missouri which now is making above 10 million pounds of month of fully continuous cast billets I had it…the responsibility for constructing it and running it belonged to our VP of operations in Sauget even though 80% of the production goes to Shelbina for making air-conditioning tubes because he was the best, had the best background. He’s a Purdue graduate, metallurgical background, has a wonderful track record of billet casting in Sauget. So you take that capability and put him in charge of the project. Doesn’t mean you do it necessarily forever that way but the contribution was greater. He had the greatest capability. People were otherwise applied. In the end there is a certain amount of R&D that goes on in our business. We not only…I have to brag a little bit but we not only develop the secondary refining process for secondary metals but the high ratio extrusion process which is standard throughout the world was developed by a number of people. Bram Lewin, Ted Schweich, my father, Sandy Silverstein, our engineer. And extruding a tube underwater with a closed end seemed to me to be impossible but we did it in 1962. And then when I go over in 1982 or ’83 to Sumitomo and they explain to me the great virtues of extruding under water and what it does on the [inaudible 00:44:14] I just sit there and smile because they copied it. I mean, literally totally copied this one, our plant. They ordered an extrusion press to the identical specifications of the Lewin Mathes Cerro press. But that was innovation and we’re still doing some of this which hopefully will result in some major breakthroughs. It may or may not but…

Herschel: I’m sure that…I think I know the answer already to this question but if you had the…if you were asked to give advice to a young person looking at opportunities in the economy today, where would this industry bring?

Henry: I think the industry makes…I’m prejudiced. Admittedly I’m prejudiced.

Herschel: Tell me from [inaudible 00:44:56] perspective.

Henry: I think it is the most fascinating business. I don’t…whether it’s in the scrap recycling industry or the consumer end that utilizes the processes that…and the…[inaudible 00:44:37] I think it’s unlimited and I think it’s a more fascinating business. I tend a little bit toward copper and aluminum because they move more. I think the “Green Sheet” that was printed for so many years by ISRI was required reading. Absolute required reading. I think it’s the best it has been for the best thing ever written. Really. In the markets. And perception. And then you can pretty well ignore most of what you read in the Wall Street Journal. I mean, you read it but nobody…number one, nobody knows what the copper [inaudible 00:45:18] really. If you knew what our economy is gonna do and what China’s…you could forecast it but I can’t think of any more challenging, fascinating, growing industry than our own. And as Colin Powell said, “What is past is prologue.” He didn’t put it quite in those terms but in terms of the future of this country he did. If you can keep the government from…our government from destroying our industry.