Retire? Maybe Not
The recession has curtailed retirement plans for many construction firm owners even as their average age rises, says a new survey by FMI. In a study sent to 6,700 contractors with revenue of more than $15 million, more than half of the 4.1% of owners who responded say they don’t yet have a team of management replacements ready, and 56% don’t have a formal plan to transition themselves out of a job.
“Many business owners now want to work longer, benefit from the profitability of their existing business versus alternative investments, and rebuild their business in the wake of the economic decline,” says FMI, which last did the survey in 2007.
Executive Changes, Movers and Shakers
• John L. Hopkins, Fluor Corp. group executive for corporate development and new ventures, retires in March to become CEO of NuScale Power, a Portland, Ore., nuclear power startup firm in which the contractor is the majority investor.
• Hensel Phelps Construction Co. has promoted Jon W. Ball and Richard G. Tucker to executive vice president. Ball, formerly Northern California district manager, now also runs the Pacific district. Tucker, Plains district manager, adds corporate program development to his role.
• Bob Schafer has been named president of Ranger Construction Industries, a West Palm Beach, Fla., asphalt and heavy-highway contractor. He succeeds Mike Slade, who is retiring but will continue as a consultant. Slade also is former chairman of the Florida Transportation Builders Association.
• Hunter Roberts Construction Group LLC, New York City, has hired Bob Belitz as vice president of finance and controller. He was a division controller at ARCADIS and CFO at Malcolm Pirnie Inc.
• Joseph P. McGonagle has joined CM firm Project Time & Cost Inc. (PT&C), Atlanta, as CEO. He succeeds James P. Rispoli, who becomes senior executive adviser. McGonagle was a senior vice president at Parsons Corp. Rispoli, who also plans to teach at North Carolina State University’s Center for Nuclear Energy Facilities and Structures, had been an assistant secretary of energy.
DPR Tries Something New
DPR construction, the California building contractor that has built itself into a $2-billion-a-year business on high-tech construction and a push for innovation, is trying something else relatively new—a big acquisition. The firm said Jan. 18 that it has agreed to buy Hardin Construction Co. LLC, the Atlanta general contractor, in a move to further boost DPR’s national scope.
DPR, based in Redwood City, is buying 100% of Hardin shares from its manager-owners in a move to expedite regional growth. Brantley Barrow, Hardin chairman, says the new link provides a bigger platform and new markets such as data centers and pharmaceutical facilities.
View from the Street
Analyst bullish on energy: The Shares of the group of publicly held engineering and construction firms tracked by investment firm Credit Suisse rose only 1.3%, on average, for the week ending Jan. 18. Analyst Jamie Cook says the results were affected by KBR, which saw its stock drop 5% following charges announced in its initial 2013 outlook.
But Cook is bullish on “the resurgence of energy infrastructure spend in North America, which will become an investable theme,” she says. Cooke estimates $70 billion in project spending across petrochemicals, LNG and gas-to-liquids in North America, “with signs the market is tightening, meaning margins could rebound quicker.”
Cook adds, “We think the Street is missing that capacity is tightening in North America, which ultimately results in better pricing and margins.” She says Fluor and KBR are “best positioned to benefit” from regional energy spending.