...ArcLight purchased the remaining shares of stock from FirstEnergy Corp. This is part of a general trend for utilities to get out of providing contracting services to return to their core function, says Bill Koertner, MYR’s CEO.

Railworks Inc. also changed hands this past May, when MatlinPatterson sold it to Wind Point Partners and a management team led by CEO Jeffrey M. Levy. “We were lucky to have some choice in who would invest in us and we chose carefully,” Levy says.

Industry consolidation continues to grow. One of the largest recent acquisition was Quanta Service’s acquisition of InfraSource Services on Aug. 31. Quanta CEO John Colson says the buyout increases Quanta’s customer base. “It helps us penetrate the substation market.” Quanta may not be done. “We have a very strong balance sheet. In the last quarter, we had $400 million in cash and a $475-million credit facility, so we will continue to look for profitable, strong companies.”

The biggest cash acquisition this year happened Sept. 19, EMCOR’s $455-million buyout of Ohmstede Ltd., a Beaumont, Texas-based maintenance and repair contractor and heat exchanger fabricator for the refinery and petrochemical industries. “There’s a growing demand for expansion of refinery production,” says Guzzi of EMCOR. “Ohmstede gives us a bigger presence in that market.”

A Winning Season

Quata Services

Subcontractors’ rights got a boost this year on a couple fronts. The new consensus contract documents introduced recently were a major step forward. “Because these were developed by owners, general contractors, subcontractors and suppliers, they represent the best practices in the industry,” says E. Colette Nelson, executive vice president of the American Subcontractors Association, Alexandria, Va. She says that even if a GC rejects these documents and insists on its own, an arbitrator is likely to rely on the consensus documents to determine accepted industry practices.

Nelson also notes that it was a good year for state legislation. “We had a major win in Colorado, where Gov. Bill Ritter (D) signed a proportional liability law, to stop GC risk-shifting,” she says. Nelson also notes that a new law in Tennessee limits retainage on public and private projects to 5% and another law in Arizona virtually eliminates retainage.

Bob the Builder Needs You!

“Who is going to do all this work?” is a near universal lament among specialty contractors. “We’re going to need 1.6 million new people in the industry by 2014,” says Thomas L. Brown, president of Sierra Pacific West. “We need to reach kids before they get to high school. You have to get to the parents and the educators to show them that there are great opportunities in construction.” But schools don’t understand or refuse to recognize careers paths other than through college, he says. “It’s a staggering effort to explain this to educators,” he adds.

Hussing Mechanical/Robert Smith

The workforce problem is a national one, but “what’s being done is at the local level,” says Cramer of Dee Cramer. He says that new people coming into the industry are less interested in traveling than in the past, so solutions for recruiting must be addressed with an eye toward local conditions. “The one thing we all have to work on is the image this industry has with the public,” he says.

The financial rewards in many areas of construction are substantial and tangible. “Look at the wage rates for operating engineers. It’s $51 to $52 per hour in Southern California and $82 per hour in New York City,” says Brown. “With over­time, an operating engineer can make $80,000 to $100,000 a year here in Southern California.”

The financial side is just one incentive for students choosing a career. “Sure, you have a lot of plumbers out there making more than the people they work for. But you also learn skills that you can use outside of the job,” says Ed Rispone, chairman of Industrial Specialty Contractors (ISC). “Plus, you see engineers’ and computer programmers’ jobs being outsourced abroad, but you can’t export craft work. Craft skills are always in demand.”

Desert Commercial Concrete/Drew Erickson

One program that is expanding to lure people into the industry is the International Brotherhood of Electrical Workers “Florida Initiative,” which was started in 2005 to attract experienced nonunion electricians to union contractors. “That program has now moved into the rest of the Southeast, as well as places like Michigan,” says John Grau, CEO of the National Electrical Contractors Association, Bethesda, Md. In addition, NECA and IBEW are hosting a series of organizing blitzes where electricians from all industries are invited to local events where contractors can recruit and, in some cases, hire qualified nonunion electricians on the spot, Grau says.

Not all programs are doing as well. Rispone served on the Louisiana Craft Workforce Development Board. It included industry groups, state agencies and educational groups. “We produced a report with recommendations in October 2006.  But the recommendations got all caught up in politics,” he says. Rispone continues to work through Associated Builders and Contractors and other groups on craft recruitment and training. “Forget politicians trying to score points or educators trying to create more educators,” he says. “We have to solve the problem ourselves.”

There is increasing interest in construction in higher education. “San Diego State just opened a construction program and already there are 120 students in the first year,” says Brown. Another interesting development is the creation of a demolition sub-minor in the Purdue University school of construction management. “We provide some of the teaching materials, and some of our members help to teach the courses,” says Taylor of NDA. He says that NDA is exploring the possibility of establishing similar programs at the University of Houston, Arizona State, Cal Poly-Pomona and Cal Poly-San Luis Obispo, Virginia Tech and North Carolina State.

Immigration policy is one personnel issue that sticks in the craw of many subs. “Finding people is tough and a lack of clarity on immigration policy only makes it tougher,” says Santacrose. “The issue has gotten so political that I don’t expect anything to be done on the immigration issue until after the elections, at least until April 2009,” says McPherson.

ASA’s Nelson is concerned about  state and local laws punishing employers for employing illegal aliens. “Our members tend to be larger and more...