Scott Vollero is the first to admit that the top half of his CV lacks a unifying theme. After he graduated from James Madison University, he went to work at an old-line investment banking firm in Washington, D.C.
“The youngest partner there was in his 60’s,” he says. “But they were the most genteel, polite and caring people I’ve ever had the privilege to work for.”
Great coworkers aside, Vollero quickly realized that i-banking wasn’t his cup of tea. Feeling the bite of the entrepreneurial bug, he purchased a stake in a struggling California solar firm and headed west to run the place. He later admitted he didn’t really know what he was getting into, though he credits the experience with laying the groundwork for what would later become a cohesive (and sought-after) lean management philosophy.
In fact, Vollero’s prescient decision to surround himself with a talented team and give its individual members the space they needed to build their respective competencies may well have saved the company — or at least “allowed me to escape with my skin,” as Vollero self-deprecatingly puts it.
Scott Vollero later bought into a chain of fitness & racquetball clubs, a jarring transition from the renewable energy business. But it wasn’t until he got into the automotive parts recycling business that he found, arguably, his professional purpose. Here’s what happened next.
Catalytic Converters? …But Why?
Every modern vehicle has a catalytic converter. In layman’s terms, a converter cleans the exhaust produced by the car’s internal combustion engine before it exits the tailpipe, ensuring that the vehicle meets local emissions standards. Though emissions standards vary widely by jurisdiction, it’s more cost-effective at this point for automakers to simply make standard “cat” models for inclusion in their vehicle platforms.
Here’s the cool part: Every catalytic converter has a significant amount of valuable metal inside. Some metals, such as copper and nickel, aren’t worth salvaging. But some, particularly platinum complex metals — platinum, palladium and rhodium — are extremely valuable. Platinum’s per-ounce value can easily double gold’s, and rhodium is one of the world’s rarest commercially refined metals. The typical catalytic converter contains approximately $60 worth of platinum complex metals, and some go as high as several hundred dollars, depending on its make and origin.
This simple value proposition is made even more attractive by the fact that platinum complex mines cluster in politically challenging (to say the least) parts of the world: South Africa and Russia, for example. Companies that recycle the precious metals found in catalytic converters and sell them on the open market — or direct to auto parts manufacturers — provide a valuable risk reduction service.
Scott Vollero Builds a Global Business
Vollero stepped into this breach, founding Autocats in 2000. Vollero and his team of key associates developed and implemented an operational business model that was “close to the customer” and still achieved “low cost – economies of scale”. With a cost-effective means of acquiring and recycling platinum complex metals and Scott Vollero’s best-in-class management philosophy behind it, Autocats was off to the races.
Over the subsequent decade, Vollero built Autocats into one of the premier automotive parts and precious metals recyclers in the world. As he’d done in previous ventures, he hired a first-rate team and took care to develop his personnel, pushing them to do more — and better — than they ever thought possible.
Autocats opened several collection and processing facilities overseas, in such hot markets as India, Australia and the Arabian Peninsula. But Scott Vollero personally devoted a great deal of time and attention to China, whose rapidly growing automotive market — driven by hundreds of millions of newly minted members of the middle class — was leaving a heap of used catalytic converters in its waste.
Vollero traveled the Chinese countryside, speaking with villagers and networking with local businesspeople, in search of opportunity. He’d later characterize it as one of the most educational period in his life.
An Exit for the Ages
By the late 2000s, Autocats was the dominant catalytic converter collector in the Western U.S. as well as several key overseas markets. That attracted the attention of Toyota Tsusho America Inc. (TAI), The trading arm of the Japanese automaking giant.
TAI and Autocats effectively entered into a strategic partnership in 2000, and Vollero officially sold his company to the automaker in 2011. Although Vollero retained a 20% stake in the firm and stayed on to help manage the transition, he’d achieved an exit for the ages from the greatest challenge (and opportunity) of his life.
On to the Next Challenge
Although Scott Vollero retains a minority stake in the catalytic converter business he helped build into a global powerhouse, he’s no longer involved with the firm’s day-to-day operations.
Whatever he does next, is probably not going to involve extracting precious metals from old catalytic converters — and is not at all clear that he’s interested in a traditional employment arrangement.
“I’m not sure I’m interested in working as a full-time, retained employee in any capacity,” he says.
Building a multinational business from the ground up does put the “yes, boss” part of the daily grind in perspective, to be sure.
But it’s equally clear that Scott Vollero has a lot of gas left in the tank — perhaps more than just a few years ago, when he sold off Autocats and contemplated sailing off into the sunset. Vollero is still a registered environmental assessor with the state of California, and is currently in the process of attaining his personal development goals of completing his 6 Sigma lean black belt and Project Management Professional (PMP) certifications.
Across the big pond, the China market is changing fast, and Vollero is one of the few American-based entrepreneurs who understands its vagaries and iniquities — the rough yet intoxicating “real story” behind the placid, rah-rah headlines. Plenty of American firms desperately need an ally with that sort of expertise.
What’s certain at the moment is that Scott Vollero’s Autocats experience is the best-read chapter in a book that’s still being written. Here’s to an entertaining epilogue.
Scott Vollero is an international entrepreneur and expert in the precious metals and automotive parts recycling industries.