As design-build and design-assist projects have spread across the region, construction managers and owners continue to tap Southern Air Inc. to help design and build projects. The Lynchburg, Va., mechanical, electrical, plumbing and heating, ventilation and air conditioning contractor’s design staff has more than 100 years of combined experience.
Paul Denham, Southern Air’s president, credits the firm’s 14% revenue increase from 2016 to 2017 to the company’s design-build capabilities on projects such the the Hotel Madison in Harrisonburg, Va., and the Devils Backbone Brewing Co. in Lexington, Va. “We’ve been a design contractor probably since our existence,” he says. “We’re comfortable challenging design issues, whereas a lot of other [specialty] firms that don’t have the internal design experience are afraid to challenge a mechanical or electrical engineer and say, ‘Well, here’s another way to do it that may be less expensive.’”
The 72-year-old firm also has its own apprenticeship program that collaborates with dozens of school districts and community colleges in Virginia, West Virginia and North Carolina. Students intern with Southern Air in the summer and can earn a journeyman’s card in as little as four years, less than half the time it takes to earn a card through traditional channels. “We’re going to solve [the industry’s labor shortage] one person at a time,” Denham says. “If our industry thinks somebody else is going to do this for us, they are sadly mistaken.”
Southern Air contributes to its communities in other ways, too. The firm—which employees more than 800 people in 11 locations in Virginia, West Virginia and North Carolina—helped donate more than 10,000 lb of food, water, hygiene supplies and children’s toys to victims of the recent hurricanes. Employees also used their Labor Day weekend to rent trucks and drive to Houston to drop off supplies.
Every year, Southern Air joins with United Way during its Day of Caring to work with the Association for Retarded Citizens of Virginia. This year, the company donated time and materials for a variety of projects, including installing LED light fixtures.
Southern Air, which was named ENR MidAtlantic Specialty Contractor of the Year, moved up one spot in this year’s ENR MidAtlantic Specialty Contracting ranking, to No. 7, as its regional revenue increased to $125.98 million.
Despite catering to a generally rural clientele, Southern Air holds its own in revenue and capabilities against metropolitan-area specialty construction firms. “We’ve cherry-picked both technology and best practices that make us look, feel and act like a big-city contractor,” Denham says.
The firm traces its swagger to the late 1990s, when it joined a peer-review group with firms from across the country. “We open up our books to each other. We benchmark against each other,” Denham says. Denham says the peer group helped Southern Air realize about eight years ago that it had the “experience and capabilities” to expand its virtual design and construction (VDC) department. At the time the group had three people; today the VDC department numbers about a dozen.
Denham says expanded VDC capabilities allowed the firm to pursue larger projects, such as a $22.3-million contract for mechanical and plumbing systems on the Western State Hospital project in Staunton, Va. Previously, he says, “It was a big deal if we did a $2- or $3-million single project.” Southern Air was hired in the proposal stage of the public-private-hospital partnership project, completed in 2013, so it could help designers maintain the budget. The firm also installed a more than 1,000-ton variable refrigerant flow (VRF) system with dedicated ventilation systems for exhaust and fresh air, which it says is the largest water-cooled VRF system in North America.
Expanding the company from a 15-employee, $250,000-revenue business in the late 1940s to one of Virginia’s largest HVAC firms, Southern Air added plumbing to the firm’s portfolio in 1962. That was broadened into electrical services about 20 years later. Building-automation and industrial maintenance departments plus a pipe-fabrication shop, were added in the late 1990s.
Southern Air has widened its service territory to the entire state of Virginia as well as West Virginia and parts of North Carolina. Today, two-thirds of its revenue comes from large construction projects in the mechanical, electrical, controls and industrial maintenance groups. The other one-third comes from the service group, which includes building services, preventative maintenance and small projects, such as cooling-tower work.
The company has completed as many as 12 projects annually for the last 34 years at BWX Technologies Inc.’s manufacturing facility in Lynchburg for U.S. Navy nuclear reactors for submarines and aircraft carriers. The projects range from HVAC work to piping and plumbing installations.
Aside from the large projects for BWXT, Southern Air has had a yearly master-agreement contract there for the past five years for maintenance, construction and engineering services. “They are an integral part of the operations here and a very reliable and dependable contractor that we consider part of our team,” says John Compher, BWXT manager of industrial engineering maintenance and construction.
John Gallahan, a 23-year-employee at Southern Air, was one of the first to enroll in the firm’s then-new apprenticeship program in 1995 as an 18-year-old. He also was the first to complete the program’s electrical qualifications four years later. Gallahan, now 41, is a Southern Air project manager and an instructor in the apprenticeship program. “It’s a pretty big driver if somebody wants to accelerate their career,” says Gallahan. He adds that Southern Air is the only firm in its area to “sustain a program like this—some others have died out and a few others don’t really do what we do, at least in my opinion.”
The firm’s Wheels of Learning apprentice program is one of the few in Virginia that is certified through the commonwealth. The program allows students who complete 8,000 hours of classroom and on-the-job training to receive a journeyman’s license without sitting for the test with the Virginia Dept. of Professional and Occupational Regulation.
The program provides hands-on training in several fields, including electrical, plumbing, HVAC and sheet metal. Apprentices, who range from high school students to adults, work during the day and attend classes two nights a week, using a curriculum from the National Center for Construction Education and Research. The program has graduated 125 students since 1995 and currently has 94 enrolled.
At least 20 students from the Bedford Science and Technology Center in Bedford, Va., have interned with Southern Air during the last 12 years, some of whom have gone on to work for the company. Aaron Payne, an instructor at the Bedford school, says “Southern Air has given my students opportunity not only for a career but also to grow within an established company.” After graduating, several students are hired as full-time apprentices. They only require two years of school in the firm’s Wheels of Learning program before they can become fully licensed craftworkers, typically reaching that milestone before they even turn 21, the firm says. Some program graduates are hired by Southern Air’s clients or competitors, but Denham says, “we’re going to just saturate the market with people and it’s going to serve us, it’s going to serve our clients and probably other contractors.”
Denham doesn’t worry too much about poaching because the company—which is 50% owned by an employee stock ownership plan—is known for promoting from within. Since joining the firm right out of college seven years ago, Drew Faulconer, 30, has been promoted three times. The Richmond-branch manager says, “For me, personally, the sky has been the limit.”
The firm also looks to promote field employees, most of whom don’t have college degrees, into management positions. Denham says half of the nine-person leadership team never attended college and his predecessor started as a journeyman electrician before serving as president for 17 years.
Gallahan, who started as a journeyman electrician, hopes to head his department one day. “I’ve been here 23 years and I’m still one of the young pups,” he says. “There’s a lot of people that have 30 or 40 years in this company. To me that says a lot.”
Southern Air also has been turning around a safety record that, several years ago, was “horrible,” says Denham, including a “serious vehicle accident.” Its experience-modification rate (EMR) was approaching 1.0 and its total incident rate was nearing 5.0. The company hired a new safety director and made safety the No. 1 agenda item at every company meeting. Every six months, project managers are required to attend a safety audit on a job that is not their own. The firm is on track to move its total incident rate to 2.0 and its EMR below 0.70, “Which we want to be lower,” Denham says.