Markets Slip 2% in 2011
Total construction starts last year slipped 2% to $421.4 billion, following the slight 1% gain in 2010, according to McGraw-Hill Construction. "After the steep declines reported during the 2007-2009 period, when activity dropped a combined 38%, new construction starts have essentially stabilized at a low level during the past two years," says MHC's chief economist, Robert Murray.
URS Agrees To Pay $1.25 Billion For Canadian Oil-and-Gas Firm
Engineer-contractor URS Corp., San Francisco, took a big step into the Canadian oil-sands and related energy sector with its Feb. 20 agreement to acquire Calgary, Alberta-based Flint Energy Services Ltd. for $1.25 billion. Under the deal, set to close in the second quarter, URS also assumes $225 million in Flint debt. The $25-per-share price was a 68% premium over the firm's Feb. 17 closing price. Flint has 10,000 employees in 80 North American locations, with 20% of its revenue derived in the U.S., says URS. Flint, which would become a new URS division, would add $3.5 billion in revenue. Flint's work includes well-pad construction, equipment manufacture, small- and medium-dia pipeline installation and large oil-sands facility building and maintenance. URS said it predicts 2012 revenue of $9.9 billion to $10.1 billion. While positive on URS' push into oil and gas, Avram Fisher, construction-sector analyst for BMO Capital Markets, noted the company's traditional focus on the "asset-light formula of construction management," adding that how it "manages this transition between asset-heavy and asset-light work will define the acquisition's near-term success."
Delayed Homicide Trial Restarts In Fatal 2008 Crane Collapse
The negligent homicide trial against New York City crane-rental firm owner James Lomma, delayed since November 2011, began on Feb. 21 with a dramatic computer model of the fatal crane collapse that killed two workers in 2008. Prosecutor Eli Cherkasky told a packed courtroom that the cab in which crane operator Donald Leo sat fell 140 ft, killing him and ground worker Ramadan Kurtaj. The latter's father, Uka Kurtaj, later told reporters, "There is nothing that I can do, but I only hope the law puts [Lomma] where he belongs." Cherkasky said Lomma allegedly tapped his employee Tibor Varganyi to buy a substandard bearing from an "unknown" Chinese firm, causing the crane's failure. Varganyi, who will testify against his former boss, pleaded guilty last fall to criminal charges of manslaughter, negligent homicide, assault and reckless endangerment. Defense attorney James Kim said his case would show that the bearing "was a symptom of the collapse, not its cause." Judge Daniel Conviser will decide the case in a bench trial without a jury verdict.
Cat Shifts Some Production Back to U.S. With Georgia Plant
Caterpillar Inc. is building a new plant in Athens, Ga., to meet the demands of a large client base in the Americas and Europe. The $200-million factory replaces an existing plant in Sagami, Japan, which the company plans to retool to build high-tech components. The one-million-sq-ft facility, set to begin production in late 2013, will build small bulldozers and mini excavators. At full capacity, about 40% of the plant's output will be for export, Caterpillar says.