BF: I think one of the things we try to focus on is to not be ambulance chasers. We look for the right client, the right job. We�re what I like to call the �Sleeping Giant.�
MM: We just don�t go around blowing our own horn. We figure if we do a great job for a customer, we�ll get the next job. We don�t really bang on doors or market that aggressively, I guess. We�d rather just stay out of the headlines, do a great job, get paid and move on to the next one. But there�s a down side to that, too. You can find yourselves in a situation where people don�t know who you are. But that�s changing.
RC: I�d say we made a conscious effort to change that. We had all these conglomerated companies that Skanska had purchased and we operated them all under different names and no one knew who owned us. Then we went to a double branding, then a single branding to try to make it clear who we were. I mean, we�re a $20 billion company!
MM:And now, a third of Skanska�s worldwide revenue is here in the U.S. It�s by far the biggest unit within the company �
NYC: And how much of that is in the Northeast and the New York region in particular? I would imagine it would have to be pretty significant.
MM: If you look at both Building and Civil, in the Northeast, it�s close to half of our U.S. revenue. New York by itself is about a third.
NYC: Is it a big advantage to be able to have both a civil unit and a building unit that can collaborate on the same job? Do you have a lot of opportunities for self-performing on bigger jobs?
BF: We�ve had the opportunities within the last ten years, starting with the [John F. Kennedy Airport] AirTrain project. That was our first real collaboration. It�s becoming a much bigger focus for us. It�s an appetite for risk to take a billion dollar project and say we�ll give you a fixed price. It takes a very substantial balance sheet to be able to take those kinds of risks, but it allows us to say to an owner that we are the best value provider.
MM: That�s definitely something sets us apart. The civil group is working in a self-performing capacity with the building folks and that gives us a product that our competition doesn�t really have. That was the story at the Meadowlands where we gave a lump-sum price because we knew that our civil people had already given us a number for concrete and piles and steel, because they do all that. So we were able to give price certainty on a building-type job and compete against CMs that don�t self-perform.
NYC: You said earlier that there are fewer and fewer megaprojects out there to bid. What is the company�s strategy going forward in terms of jobs you�re bidding now?
RC:You know, a couple of things have happened to the New York market. First, there are definitely fewer megaprojects. And, obviously, smaller projects create for more competition. The second thing is that all of the multi-nationals are here now. So that�s created even more competition here. We�re never going to leave New York. But the next big opportunities for us, we think, are going to be on the West Coast. We�ve built offices in Seattle and Phoenix and Northern California, all with the idea of building a bigger business out there.
MM: I�d say it�s even simpler than that. I�d say our strategy right now is to grow. Let�s put some Building people in Civil offices, let�s put Civil people in Building offices and let�s grow our footprint so we�re in every major urban center in the company. So maybe it�s organic growth like that. Or maybe it�s through acquisitions. But we want to aggressively grow now and we think now is the time to do it. It�s easier to acquire great people and great companies in a market like this. The U.S. economy is going to come back, so investing now is going to pay off later.
NYC: I�m sure you guys aren�t in the business of economic forecasting, but what are you seeing and hearing in terms of the next couple of years for this region?
MM: I�d say the private sector is still dead and will probably continue to remain dead for a while longer. There�s no heartbeat. We don�t see it. I would say it�s going to stay rough for at least another year or so � at least on the building side. On the civil side, we�re optimistic that the pain the states are going through are going to lead to more public-private partnerships, which would be a good thing for us. The Port Authority [of New York and New Jersey] is already looking at it with the Goethals Bridge replacement. And elsewhere, Florida�s into it, Georgia�s into it and we think there�s going to be more and more of that. You talk about differentiators or �separators,� we think that�s a possible one for us. But the private side, I�m not seeing anything right now.
RC: Yeah, and you can see the private guys have started jumping in to the civil business, so there�s a lot of capacity out there but not enough work for all that capacity, which just drives prices down.
MM: It�s a stretch, though, to say that those firms that are jumping over [to do civil work] are really �capacity.� They�re just desperate.
RC: Right, but if I�m an owner, you still put your business out now. If you�ve got the money, do it. Because you�re getting record low prices.
NYC: A lot of firms tell me this market has caused them to see things some strange things: smaller firms tell me that all of a sudden, the small jobs they used to get easily are all of a sudden going to the Tishmans and Turners and Skanskas, while those larger firms are seeing smaller and medium-sized firms stretch and bid jobs that might be a bit out of their league. There seems to be a lot of that going on.
MM: Vertical builders bidding civil jobs is what we�re seeing a lot.
RC: If I�m an owner, and I see that, I�m thinking, �You�ve got to be kidding me.�