Steel fabricator and erector SteelFab Inc. was certainly not immune to the construction industry's dark days of late 2008. At that time, the specialty contractor found itself in much the same panic mode that gripped many others as its project backlog suddenly, and literally, shrank to nothing.
The Charlotte, N.C.-based steel designer, fabricator and erector saw 26 projects mothballed or canceled as the local economy spiraled down in the wake of the nation's banking crisis. Project owners were left with no choice as sources of financing dried up.
"For the first time that I can remember, we had a negative number of order entries," recalls Glenn Sherrill, company president and COO. "That winter, we felt like we would never sell another job. And we hardly sold a job worth talking about during the entire first quarter of 2009." The downturn was widespread, hitting all seven of the company's divisions.
In the early days of the recession, profit margins took a back seat to simple survival strategies. SteelFab instituted a hiring and salary freeze and began analyzing its expenses, right down to how often it replaced trailer tires, and at what cost.
"We did anything we could to save money, including painful things like cutting employee benefits and reducing paid vacation time," Sherrill adds.
But once the initial panic subsided, management began to reap the benefits of several long-term relationships the company had forged over the years.
The company was founded in 1955 by Sherrill's grandfather, J. Glenn Sherrill, as a fabricator of light structural steel. In the 1970s, Glenn's father, Ronnie, along with uncles Phillip and Don, saw an opportunity to spin off a separate division to fabricate stairs and handrails. The creation of the new company—Charlotte Miscellaneous (CM) Steel in York, S.C.—enabled the Charlotte plant to focus almost exclusively on structural steel.
The spin-off of CM Steel as its own Sub S corporation produced an organizational template for the company's future expansion. Granting ownership to each of the division heads tied each of them more closely to the bottom line, which provided added incentive for improving the company's overall profitability.
Today, in addition to CM Steel, SteelFab operates separate divisions in Virginia, Alabama, South Carolina, Georgia and Texas, along with SteelFab Columbia Detailing in Columbia, S.C.
"If you're going to service the Georgia market effectively, it helps to be in Georgia," Sherrill explains.
While SteelFab doesn't restrict itself to bidding on local projects—the company is currently supplying material to a contractor in New Jersey—its local presence near major Southeast metropolitan markets has been a significant factor in its survival, Sherrill says.