For many companies in the AEC sectors, business never seemed more fraught with risk and complication than in 2012. Lawsuits and indictments kept attorneys as busy as ever, especially as several legal matters reached the trial stage. Projects and risk management became more complex, while financial woes engulfed many recession-weakened small and midsize contractors.
News of sputtering contractors rolled in at a steady clip. Starting with the defaults of major cladding subcontractors, including Trainor Glass, earlier this year and continuing all the way through to the bankruptcy filing of Texas highway contractor Ballenger Construction, contractors reached the end of their financial rope (usually for a combination of reasons) just as the construction- industry recession seemed ready to sunset. For numerous companies, market recovery will arrive too late. However, there were also silver linings. Although surety defaults rose, they weren't so high that they wiped out overall surety profits.
Prosecutions for criminal and regulatory misdeeds filled the industry news channels.
Victories, involving costly legal defenses, outnumbered defeats in the most prominent cases. Several times plaintiffs and prosecutors failed to convince judges and juries of culpability by designers and contractors.
The most spectacular collapse may have been moral, not financial, and seemed to take place in the executive offices of a single major engineering firm.
Alleged ethical lapses drove several executives of Montreal-based SNC-Lavalin out the door. What started as a story that seemed to come out of a Graham Greene novel—millions of missing dollars and, arrested in Mexico, an SNC-Lavalin "agent" linked to a scheme to help smuggle out of revolution-torn Libya the son of the former dictator Muammar Gadhafi—ended the career of several top company managers, including the CEO.
More recently, prosecutors in Montreal charged the former CEO, Pierre Duhaime, with fraud over some work at McGill University. Duhaime was relieved of his responsibilities in March. However, none of the SNC executives has been convicted of a crime. Still, the unproven charges produced a media spectacle. How often do you see the CEO of one of the world’s leading E&C companies covering his face when going into a courtroom or police department?
His successor, former CH2M Hill executive Robert Card, is notable for being an outsider in Quebec business circles. He says he is committed to learning the local language.