"Four by eight," laughs a yard owner from Brooklyn. "That's about the size of my entire display room."
Still more slides show ingenious racking systems for compactly storing engines, or tires, or window glass. An operation with extensive dismantling, Isenberg explains, can save as much as 25% on materials handling. The visual tour continues, accompanied by a singular voice-over, one that ricochets from the nitty-gritty of dismantling -- of right-angle air ratchets and water-pump regulators -- to key marketing and management strategies and from unit costs to profit margins.
Some of the loftier concepts may be too far out for some of the people attending the seminar, especially those who never finished high school. Over the years, Isenberg has tried hard to scale down his vocabulary and his methods, as necessary. He once used a cigar box to prove the importance of warranties to a Cleveland salvage dealer. The owner, like many reluctant salvage operators, feared that offering a 30-day warranty on most parts would cost him plenty. Isenberg suggested an experiment: Start with motors, raise prices, say, 5% or 10% to cover the returns, and put those "surcharges" in a cigar box. Then, pay all refunds or warranty-related labor costs out of that box. At the end of the year, the contents of the cigar box spoke loudly. "I proved it to him, without a fancy accounting system," Isenberg says.
The slides and the talk hit home. The undercurrent of chatter boils up in the words of a struggling yard owner named Bob: "My wife wants a Seville, and I tell you, if I could have done this stuff five years ago we'd both have one by now."
Isenberg mentally notes those words. He has his mark. A bit later he breaks his eye contact with members of the group and glances downward in front of his lectern, to the carefully arranged set of bluebound cassette courses that stretch encyclopedia-like for a couple of feet. Isenberg explains that he doesn't want to get a hernia lugging those binders all the way to Springfield, Ill., his next seminar stop. Wouldn't it be nice if somebody would take them off his hands, somebody like Bob, for instanee? How badly, he asks, does Bob want that Seville? Pleading poverty, Bob tries to sidetrack the issue and the stares of his colleagues. His hook set, Isenberg tactfully eases up, insisting only that he will sell the cassettes to somebody by the end of the third day.
Over dinner that night, in a private conversation, Isenberg lays a bit of groundwork before he reveals an ambitious plan that would open the auto recycling industry to outside entrepreneurs. "I've come to a couple of conclusions," he says. "The first is, this is, in fact, a high-profit industry. The gross profit is much higher than almost any other retail business. You can easily triple or quadruple your money. You can run at 25% to 35% cost of sales. You can buy a car for $300 and sell the parts on it for $1,000. I have clients that do better than 50% net profit on sales.
"Secondly, it's a business that is shockingly simple to run, although most dismantlers won't tell you that, because of the way they run things. The man works his ass off. He's got two phones in his hands. He's yelling all the time. Most people succeed in spite of themselves. In the entire industry I can't name more than a dozen people I'd consider truly competent businessmen and managers. The industry is basically populated with people who are intelligent, hard-working, hard-driving, sales-oriented mechanics -- guys who used to own body shops, or towing services, or garages."
Isenberg then explains that he has recently decided to vary his approach -- by no less than 180 degrees. "I'd rather take a businessman and teach him the art of dismantling than take a dismantler und try to teach him the art of managing," he says. He launches into his plans for the near future:
In partnership with a number of existing salvage operators, a nationwide network he is beginning to line up, Isenberg will purehase failing junkyards. They often sell far below their real value, because buyers are scarce. The few parts of value will go to Isenberg's partner. The key purchase will be the land and the zoning approvals for a salvage business, all but impossible to secure nowadays for new yards. The yard will be bulldozed and a modern dismantling facility erected. Isenberg will then advertise for entrepreneurs with around $50,000 in venture capital to enter a state-of-the-art recycling business. He may not mention automobile recycling in his initial ads, because of the stigma that still hounds the industry.
