The following excerpts are additional questions and further discussion that occurred at this year's Concrete Construction Annual Industry Roundtable, held prior to the American Society of Concrete Contractor's Annual Meeting on Sept. 17, 2009, at the Evergreen Marriott Conference Resort outside of Atlanta.
Gregorski: Do you find it is easier to get money owed to you than it was three to four years ago?
Tull: I have found it to be easier to be aggressive about being paid without offending the customer. I tell them, "You know how the economy is, I have to get paid right now."
Winkler: I think they are a little more understanding when you place a lien on a project.
Dalrymple: We've been in business 25 years and up until two to three years ago, we never placed a lien on a job. We've never gotten stiffed for a large amount. But recently, everyone has been slower to pay. We've put liens on the job and they end up being bonded over.
DeCarlo: The only problem when you slap a lien on a project, the job goes into foreclosure and the bank is the first lien holder. There is usually nothing left by the time it gets to you. Dalrymple: Usually the banks have first rights on the liens but by the time they get down to you there is not a whole lot left.
DeCarlo: It is difficult for projects to get money from the banks because many of the projects are no longer being funded. They are not worth the value they were originally appraised at.
Gregorski: Are there any segments showing growth?
Padelford: Schools and hospitals.
Winkler: Wastewater treatment plants.
Gregorski: What about parking lots?
Tull: Why not, there is opportunity there.
Dalrymple: We joined the Ohio Ready Mixed Concrete Association for parking lots but it's a fight. When someone wants 4 inches of asphalt, they want 10 inches of concrete and it has to be reinforced. Our Ohio Ready Mixed representative is spending a lot of time in engineers' offices trying to educate them on concrete parking lots. There are plenty of positives to a concrete parking lot?lighting, for one example.
Gregorski: Are you incorporating sustainability into your business?
Dalrymple: We went into that push about two years ago. We had a lot of response from architects because they didn't understand sustainability. A year ago, it all fell apart. We've asked architects 'What's going on?' and they claimed there was no money to build sustainably. No one wants to spend the extra money to redesign a project. Meanwhile, the owner is looking at cutting costs. Low bidder is always the winner.
Gregorski: How many concrete contractors attend the ACI meetings? How many engineers come to the ASCC meetings?
Winkler: We need to get contractors and engineers together somehow. Just to get some dialogue going with the goal of working together more often.
Houck: Adding value at the one-on-one level is important, but you also should be creating industry awareness through the national association meetings.
Nasvik: The national ACI meeting is a place where engineers come together. ACI needs more contractors to attend ACI meetings and mix with engineers and architects that are on certain committees debating specific concrete guidelines. An aging membership at ACI is a problem, something they are very concerned about, as well as the transition to younger generations. The younger generation doesn't appear to be into associations the way other generations are; it's a change in attitude.
Tull: The point is that there are more ASCC members attending ACI meetings than there are ACI members attending ASCC meetings. The exception, ACI 302, has a fair share of contractors involved.
Nasvik: ACI 302 has a fair number of engineers that are involved in ASCC that is one place where the crossover does happen.
Gregorski: Has ASCC looked at getting engineers more involved by expanding their participation?
Dalrymple: I don't think so. We've discussed it once in a while but there has never been a real push.
Houck: The real bang for your buck if you are trying to influence architects would be to get industry representatives on the docket at CSI, AIA, or other national trade shows. Then, it is a representative from the concrete industry educating a larger group.
Gregorski: What about equipment, have any of you purchased new equipment recently?
Dalrymple: We have been looking at it, but with the way the economy is right now and our industry, I am concerned about taking on the debt. I am concerned that if we don't replace or update our equipment, we may run into trouble. We must continue to add and update our fleet to stay ahead, and eventually the older equipment will go by the wayside. Ultimately, I think most contractors are not making enough money to purchase new equipment.
Gregorski: How is the financing for construction equipment?
DeCarlo: That is the only lending market that has been proactive. We've had multiple calls from independent lending institutions asking us if we want to borrow some money to buy equipment. We just paid off a piece of equipment and the lending institution asked us if we wanted to borrow money to buy more equipment.
Nasvik: What kind of technology are you following at this point? One of my thoughts is that equipment manufacturers are quietly innovating to get ready for the next round of construction. In a way, the equipment you own now may not put you in a competitive place once you start getting busy again, so what are you looking at in this regard?
Dalrymple: BIM is one area that we are looking at. For us, it's good to recognize points of conflict.
Winkler: I saw a BIM demonstration using a 50-foot wall as an example. It tells you how many square feet it is, how much concrete is in there, how much labor you need to form and pour the wall. It's unbelievable.
Dalrymple: The future is in education because you are going to need someone who can understand BIM and other high-tech tools and equipment.
Gregorski: Does that person exist in your company?
Dalrymple: Yes, we have that person.
Houck: As soon as BIM starts getting integrated into the construction management and architecture courses at the university level, it will be easily known. I think one of the big hiccups with BIM, from a manufacturer's standpoint, is that some of the companies are charging for information to create objects so they can be put into a BIM system rather than just tying into an existing database.
Gregorski: Is there new competition out there?
Padelford: Yes, and they don't belong there. They are inexperienced and throw out the lowest bid just to get the job. Their original business has dried up, so they are getting into different areas.
Tull: The light commercial concrete contractor is the one who is getting pinched. He has residential contractors coming into the business, as well as the larger contractors vying for the same business.
Padelford: One of the things helping us is that we are more diversified than our competitors. We pretty much bid the complete job.
DeCarlo: We are trying to be the best we can at what we do. In good times, it's easier to diversify but right now you can't afford to bid something that isn't your expertise.
Gregorski: How far in the past were things considered 'good'?
Padelford: I would say the summer of 2008, and then the bottom started to drop.
Tull: Let's say 2006, life was good, and the foreseeable future was good. If you could go back to 2006, what would you do differently to prepare for where we are at now?
Winkler: I don't know what you can do when the banks won't lend money to build projects.
Dalrymple: We are very conservative company, so I don't think we would have done anything differently. Maybe we'd be more selective for better jobs, more productive, and more profitable trying to get the margin bigger.
Winkler: In 2006, we were talking about a whole different set of problems. We were trying to find people to run our business, succession planning, and immigration problems. Everything was good, business was going well, and then it just fell off a cliff.
DeCarlo: In a couple of years from now, the problems with skilled laborers could be worse because a lot of the workers have moved on to other fields.
Gregorski: Are you retaining skilled laborers so they won't go to a competitor?
DeCarlo: Yes, absolutely we are. We are nothing without our top people. We have even asked superintendents to put on a toolbelt and help out, and they are happy to do so.
Tull: Before that was a problem. Now they get it and are willing to help.
DeCarlo: I don't think it is as much about the guys in the field as it is the guys in the office who have been getting laid off.
Dalrymple: It's very hard to tell someone they are not going to work tomorrow.
Winkler: Now, you have to tell someone who has worked for you eight years that they can't come in tomorrow simply because you don't have any work for them to do. CC
Past Industry Roundtables
Take a look back at past Industry Roundtable discussions to see how well panelists predicted the industry's direction.