Trash to treasure
From start, Henry has knack for picking up pieces
Jerry Henry Jr. has been dabbling in waste hauling since he was a teen, but his latest connection to the garbage business bubbled into a controversy for Fort Wayne's mayor, Henry's brother Tom Henry.
Jerry Henry became the subject of controversy in September, when businesses he has a hand in made a bid for the city's $9 million-a-year garbage-hauling contract. But when he was still in his teens, Henry made his start in business hauling scrap, dirt, garbage and anything else he could fit into his battered pickup.
"I was a trash man before the retail trash businesses existed," Henry, 59, said recently as he took a break in his beehive of an office downtown on East Berry Street. Pink phone messages littered his desk and assistants buzzed around outside.
Earth First LLC, a firm in which Henry has a 5 percent interest, was one of five companies to submit proposals for Fort Wayne's garbage business. The Earth First proposal was the lowest submitted, but the city delayed action amid questions about Henry's relationship with the mayor, whether the company has sufficient capital and whether a different procurement process should have been used.
Earth First announced last week that Henry would relinquish his interest in the company, but he still owns the Pontiac Street transfer station where garbage would be taken before being hauled to a Jay County landfill.
At the same time, the current contractor, National Serv-All, offered to continue serving the city for the next two years at its present rates - which are cheaper than any of the bids.
The city announced Tuesday that it would extend the Serv-All contract for a year then open Fort Wayne's garbage business to competition.
Bob Young of National Serv-All said Earth First has no experience hauling garbage and might not have accurately estimated expenses.
He wouldn't say why National Serv-All agreed to extend its contract at a rate that was lower than the proposal it submitted.
"There's a very good reason, but right now, we're not going to get into it," he said.
Henry says he won't be hurt financially if Earth First doesn't get the garbage contract. But he says the Earth First proposal was the best deal for Fort Wayne.
Certainly he has plenty of other irons in the fire. Henry owns an interest in more than 50 other businesses that employ more than 1,000 in Fort Wayne and hundreds more in northeast Indiana. But he started much more humbly.
Along with an Oscar Robertson-autographed basketball, a portrait of Mother Teresa and Notre Dame bric-a-brac of all kinds, Henry has a framed copy of his first business card in his office. It offers to deliver "good black dirt" and lists his parents' phone number.
Even at 16, Henry knew he wanted to be his own boss.
"I didn't care if I dug ditches as long as I owned the shovel," he said.
The son of a social worker and the oldest of 17 children, Henry didn't go to college. Instead, he bought a used pickup, delivered new appliances and hauled away old ones, from which he'd strip the motors, copper and other valuable scrap.
Henry was an indifferent student in school but remains a voracious reader, devouring a book a week. He was preparing for a business trip to Austin, Texas, last week. But what Henry said he really was looking forward to was touring the Hill Country ranch of President Lyndon B. Johnson, about whom he'd been reading.
Henry's education in business was similarly informal.
As a young man, he had long conversations with a scrap-yard owner, Melvin Krel, and confided that he wanted to start his own business.
Krel, whom Henry described as a philosopher, helped Henry start a company when he was just 18. Henry used a corner of Krel's scrap yard to salvage and resell usable steel from loads of refuse from General Electric Co. and other businesses.
It was the first of many ventures into the steel business, but life was hard for Henry in those days. He has a laminated loan application from Nov. 15, 1972.
The night before, he came home to his wife, Becky, after another discouraging day of scrapping. The couple was panicked about how to make ends meet.
"We sort of cried ourselves to sleep," Henry said.
The next day, he went to Fort Wayne National Bank, which granted him a $1,000, 90-day loan on little more collateral than a handshake. Henry went downstairs, cashed the check and got nine $100 bills and five $20 bills. When he got home, he put the money under his pillow.
But his luck turned that day. He had a succession of good days scrapping and didn't need to use the borrowed money to pay bills.
On Feb. 13, 1973, "I went right back and paid them the same bills they gave me - plus $20 for interest," Henry said.
The business Henry ran out of his pickup grew into Midwest Pipe and Steel Inc., a company that cuts and sells steel tubes, sheets and other products. Henry now runs all his businesses out of the company's headquarters at 323 E. Berry St.
Along the way, he's made something of a specialty of buying and turning around troubled industrial companies and maintaining manufacturing jobs in the region.
In 2001, Henry headed up a group of investors that bought the assets of Markle auto parts maker Wayne Metal Products Co. weeks after it shut down. The move saved about 100 jobs, and the new company, Wayne Metals LLC, grew to 215 employees, according to the 2009 Harris Indiana Industrial Directory.
In 2005, Henry formed the Sherman Group, an investment consortium dedicated to turning around industrial companies.
The same year, it bought the Deister Concentrator LLC, a maker of equipment used in the mining industry that had moved to Tennessee in 1998 after a century in Fort Wayne. The Sherman Group bought Deister when it was about to go bankrupt and brought it back to Fort Wayne, where it continues to operate.
Henry and his associates also have acquired G&S Metal Consultants LLC in Wabash, FabWeld Inc. in Fort Wayne and other troubled companies.
In August, Henry and two partners, Walt Fuller and Wally Comer, bought a manufactured-housing plant in Garrett from bankrupt Fleetwood Enterprises Inc.
Comer, who ran the plant before the bankruptcy, said it was headed for closure until Henry and Fuller helped him make the $1.75 million purchase. The move preserved 80 jobs and employees kept their seniority. They took a cut to base pay, but with bonuses, they're making between $19 and $20 an hour at the new company, Adventure Homes LLC, Comer said.
'A long-term guy'
The Adventure Homes purchase sums up Henry's investment philosophy.
Henry says good management is the key to making a company work, and he admits that's not his strong point. Rather, he has a knack for recognizing businesses with potential, investing in them, finding good managers and giving them the support they need.
Comer says that's exactly what has happened with Adventure Homes.
"They say, you're running this thing, let us know what you need," Comer said. "That just doesn't happen in business."
Henry says he doesn't buy businesses just to turn around and sell them for quick profit. Rather, he buys businesses with an eye for the long term.
As the United States comes out of recession, Henry expects Americans to take a new look at manufactured housing, which is cheaper than stick-built homes but has improved in terms of quality.
"I think they're going to sell," Henry said. "These aren't your tin cans of old."
As with his other businesses, Henry has no plans to sell his interest in Adventure Homes.
"I'm a long-term guy," Henry said.
In contrast, many private-equity funds are buying industrial plants out of bankruptcy with an eye toward selling them in five or six years. That's what New York-based American Industrial Partners Capital Fund IV LP plans to do with Fleetwood RV Inc. in Decatur.
Galen Eberhart, director of the DeKalb County Economic Development Partnership, hopes Henry and his partner, Fuller, serve as models for others in the area with money to invest. Instead of sending all their money to Wall Street, Eberhart wants investors to consider long-term investments in businesses nearby, creating jobs for their neighbors and boosting the regional economy.
"They're doing my job for me," Eberhart said of Henry and Fuller. "And I need all the help I can get."