04/26/02
MICHAEL TOMBERLIN
News staff writer

Bermco Aluminum isn't resting on its cans when it comes to the automotive industry.

The company began in Birmingham in the early 1920s as a scrap metal operation and has evolved to a formidable, if low-key, player in the business.

Bermco takes cans, old auto parts and pieces of aluminum scrap and makes metal used in everything from lawn mowers to refrigerators to barbecue grills. But Bermco sees the automotive segment as the company's chance for major growth.

"When you look worldwide at the secondary aluminum industry, which is what we're in, 70 percent of the market goes to automotive," said CEO Stephen Weinstein. "We've already had great success in that industry, and I believe we can have more."

Weinstein has reason for optimism. The company has been certified as a supplier to all of Honda's North American plants, including the one in Alabama. The Lincoln plant takes Bermco's aluminum ingots and turns them into engine blocks and manifolds.

Weinstein said the Honda contract has boosted Bermco's business, and though the automaker is not yet its largest customer, it could soon be.

He said the company had 100 employees before Honda; now it has 125. The Honda contract also led to a $1 million expansion of its furnace and plant at 3230-P Airport Highway.

Bermco not only ships aluminum to Honda, but also receives aluminum scrap and imperfect engine castings from the plant to be melted back down.

Honda is just the latest of Bermco's automotive customers.

Robert Hollabaugh, head of sales for Bermco, said the company began shipping aluminum to Toyota in Japan in the 1980s because favorable currency exchange rates made it cheaper to the automaker to buy aluminum from Birmingham than from Japanese suppliers.

In the years since, Bermco has sold to Ford, General Motors, Saturn and to companies that supply BMW, Toyota and others.

Hollabaugh said Bermco is going after work from Teksid, a Fiat subsidiary that is expanding its engine castings plant in Sylacauga. Bermco also wants to supply Hyundai, which is building a $1 billion plant in Montgomery, and Toyota, which is building an engine plant in Huntsville.

Winning any or all of that business would prompt Bermco to undertake an expansion costing at least $2 million. The company also plans to eventually relocate from downtown to its scrap yard site in Bessemer.

Though the company remains small, Hollabaugh said he believes Bermco has shown it can thrive in a global economy.

"Fifteen years ago when I got in this business, it was about relationships and handshake deals," he said. "Today it's all about contracts and price, and we can work that way too."

 Tough customer:

Weinstein said after undergoing the rigors of being certified by Honda, he believes his company's products could pass any quality standard. Honda studied Bermco's processes on site and performed more tests in Japan.

"We understand why Honda was so tough on us when it comes to quality," Weinstein said. "Ultimately, the quality of our products reflects on them and the quality of their products."

Bermco recently spent $750,000 upgrading its environmental controls at the plant.

The company has two large traditional furnaces for melting scrap. It also has added a rotary furnace, which helps produce a cleaner metal. It casts aluminum into 1,200-pound blocks known as sows or into smaller brick-shaped ingots.

Weinstein said Bermco gets its aluminum from all over the place. For instance, large blocks of shiny aluminum at the plant came from the Airbus plant in the United Kingdom.

"Just think, we can take a chunk of aluminum from Airbus in the U.K. and melt it down into ingots that could be shipped to Japan and used to make Toyota engines," Weinstein said. "It's really incredible when you think about it.