Starting Over From Scrap
Photography by Morgan Anderson
As a divorced single mother of two young children, Marsha Serlin hardly seemed destined to become a high-powered CEO 35 years ago. Yet starting with only $200 and a rental truck, Serlin became not only a successful entrepreneur, but also the leader of one of the largest industrial recyclers in the country: United Scrap Metal.
Based in Cicero, Illinois, Serlin’s company processes more than 140,000 tons of steel and 50,000 tons of other materials every year, bringing in more than $215 million in revenue. From 2007 to 2009, Crain’s Chicago Business listed United Scrap Metal as one of the Chicago area’s 50 fastest-growing companies. (One of her kids, Brad Serlin, is now the company’s president, while the other, Cindy Serlin, tutors children with developmental delays.)
Serlin’s success can be traced to the Chicago Blizzard of 1979. While other scrap dealers were paralyzed by the snow and the rail lines shut down, Serlin kept her single truck running nonstop during the two-day storm, helping Del Monte Foods remain open by delivering its backlogged scrap to U.S. Steel. Today, Serlin demonstrates the same unflagging commitment to more than 2,500 customers nationwide. However, her success didn’t come quickly or easily.
“I had three jobs at the time I started: I was selling insurance at night, working in a retail store for health insurance on the weekends, and I had a scrap metal job during the day,” Serlin recalls. “So after a while, I decided which could be the most lucrative. I had to take care of my children, and as a single mother, it was difficult to figure that out. [Scrap metal] was a business where I didn’t have to go back to school, and I could earn money if I wanted to work hard. So that was really what drove me.”
Forward spoke with Serlin about her experiences as a C-level woman executive, her thoughts on the industry and her advice for aspiring entrepreneurs.
When did you realize you were going to make a legitimate business out of a tough, part-time job?
That was about three years after I started. I finally realized I was really good at talking to the customer in a very professional manner in the business environment, and looking at large and small manufacturers and medium-sized companies in a fresh way. I had no experience in the business. So when I looked at how people were doing business, I could see problems in a way others were not, and suggest novel ways to fix them. If a scrap dealer is very good, they know how to handle the materials so that the customer, the manufacturer, has less handling and lower costs in moving scrap material from the manufacturing facility to the truck. So it saved the manufacturer a great deal of money. I really observed. I looked at how a man would go from a line where he brought the material, and I really studied that material and tried to figure out ways that they could save efficiency and time. We became very good at that, and that was the beginning. Manufacturing customers became our bread and butter. That’s the mainstay of our business.
What had the business been before then?
I was cleaning up boneyards. Or I would go to auctions to buy materials. I mean, anywhere. I was picking up free material in the alleys, loading it up on a truck. And then at the end of the day, I’d take it to somebody—like me now—and have a few dollars. That’s the beginning of the business. And when I had enough money, I purchased a truck, and that first truck was $3,500. Then it just developed into this manufacturing service center, and now we are one of the largest companies in the Midwest. We have thousands of large roll-off boxes that handle materials coming off lines of manufacturing companies.
At United Scrap, your customers reportedly get free bags of popcorn when they drop off a load. Beyond small perks like that, how do you attract and retain customers?
We are fair. We do all the right things, and we are dependable. We look at our customers’ companies as if they were our own, and we try to devise methods of materials handling that significantly save them money and time, and provide them with equipment that they may not currently have. We even do software programs that are consistent with their books. They can get into our system and see all of their operations.
What challenges have you faced as a woman sitting in the CEO’s chair?
I was really underestimated. People think you’re going to be gone in six months or a year. Here we are 35 years later and still rocking and rolling and getting bigger, and most of my competitors from that time are gone. They just said, “A woman in this business is never going to succeed, so don’t bother with her.” Being underestimated was really good for me. It really moved me to do better things.
United Scrap employs more than 200 people and boasts one of the industry’s lowest turnover rates. How do you keep employees happy, productive and sticking around?
Our employees understand and embrace our culture. Our backyard is Chicago, so we are very involved, and the employees also have to be involved. We have a recycling day where we give a huge amount to the Ronald McDonald Houses in the Northwest Indiana and Chicago area. We’re on our ninth or 10th year doing that. You can’t get hired here unless you’re involved. If somebody doesn’t want to devote some portion of their time—not their money but their time—to a charity, they don’t get to work here. Maybe because I’m a woman, but my whole philosophy is I’ve been so fortunate to get to this place in my life. It’s not by luck. It’s hard work. But I want other people to experience the same thing.
Have you had any problems obtaining credit for expansion and buying equipment?
No, we have always had good relationships with our banks. We have consistently been a profitable company, and I think they recognize this. But smaller companies can’t get money today. I really am advocating for them because the government has such strict guidelines on the banks that it’s very difficult for a lot of companies to get money. There’s so much money around, but the banks are keeping it, and so are individuals. Now, if banks are keeping money, then how can a little company grow? How can the guy down the street hire two more people if he can’t get any more money from the banks? We went from so liberal in our lending practices to very strict, so I think it’s a big problem as a country.
Who are your most common and loyal customers?
Our business comes from everywhere—every single place you can possibly imagine. Even a bakery is a client. Why would a bakery be in scrap metal? Well, the racks that they have are all aluminum, and they constantly are breaking or replacing their stoves and ovens. We also do a lot of business with steel manufacturers, and service centers that have nonferrous metals.
How does the global economy, and specifically China, affect your operations?
The world is changing, and we’re now in a global market. The concern about China is that its economy is slowing and they are not going to be building. They’ve got a billion people. They are in the process of creating a middle class, and in order to do that, they need communications, brass and copper, they need aluminum, stainless and infrastructure, and they’re building. But as their economy slows, they are going to stop building as much. And if that happens, we won’t have the demand from them that we have had in the past. China is such a large consumer of the world’s nonferrous and ferrous metals that they make a very big statement for the world, for everyone.
Do you do business with Chinese companies?
Very little. My feeling is that our domestic mills deserve our metal. We can sell to China without a doubt. But I choose not to, in many cases. I’d prefer to keep our American mills going. I want the jobs here. I’m pretty nationalistic.
While China’s appetite for scrap metal has moderated, Turkey’s has increased.
Oh, well, Turkey, they’ve been after us for years now. They’ve been a very solid player in that market. They’re rebuilding the Middle East, and we’re not—that’s what bothers me. Turkey is rebuilding the infrastructure for Iraq. They’re very large players, and the Turks have always been that way, but much more in the last few years. They’ve been all over the U.S. trying to get metal because they need it. We have more scrap metal than anyone because we don’t have bicycles—we have cars. China will be self-sustaining after only another generation because the cars will then be recycled just as they are here.
How then do you feel about the future of your company and the economy as a whole?
We can’t complain. We’ve had some very good years. But that has been based on turning our inventory quickly. You sell me materials today, it’s been sold today at today’s market. We don’t speculate. Money is always my concern. And for me, I look at the bottom line. And if we made only a small profit, I’m fine with it.
A lot of people say, “Well, if the market goes down…” Well, in that case, I’ve already sold it. The material that came in a month ago, it’s gone, and we’ve made a profit on it. It hits our door, we know we’re buying it, and we sell it the same day, so that we don’t have risks. I don’t like a lot of risk. There are people in our business who speculate a great deal, and it just is not the way we do business.
What advice do you have for those who want to reach that CEO spot?
Reaching the top CEO spot takes a very long time. Be willing to work 16-hour days, six days a week. This is not for wimps. This business is not for anyone who wants a desk job. She has to be able and willing to do what all of the employees are doing. If you can do what you say, I think it means an awful lot in our business if you follow through and you execute.
Profitability is No. 1. I am not a not-for-profit, and if people expect us to work and not make any money, then they can’t be our customer; we’ll fire them. There’s no other way. If a deal is too good to be true, it probably is, and you have to be constantly aware of that. It’s important for customers to know that.