Brand new
February 19, 2009 By: Mike Dunn Pit & QuarryAmidst an abysmal economy — especially in residential construction — 35-year-old Franklin Construction of Chico, Calif., had its best year ever in 2008.
Rod Winkle, president, attributes the feat to aggressive bidding and doing just about any type of job to keep his general engineering contractor crews working as much as possible. "If you're not afraid to discount your work and go outside of your normal work area, you have a much better chance at having work lined up and to keep making money," Winkle said.
Even though the company is licensed for work in eight western states, Franklin Construction typically works within a 50-mile radius of Chico, doing clearing, demolition, earthmoving, paving, chip seal coating and striping in both the public and private sectors. "Our income can range from $300 to rent a piece of our equipment to another contractor to $5 million for a long-term city street reconstruction project. We'll go wherever we need to. We want to stay aggressive and keep working,” Winkle said. A common project size for Franklin Construction is $100,000 to $500,000, with most jobs lasting between two and three months.
The company supports most of its work with its own material plants and 50 employees during the peak May to December season. With three gravel plants and one asphalt plant, Franklin Construction can barely keep up with its own demand for base rock, pea gravel and asphalt rock. On the other hand, the company doesn't let owning its own materials limit how far out it will travel for work. "We'll use other people's materials if that's what it takes to make the numbers work," Winkle said.
"The roots of our company are that we scrap and fight for every job. Years ago, we were always much smaller than our competitors, so we learned to take the leftover work — slow, tedious street improvements or small asphalt driveway jobs — and we got good at it. That has served us well."
Despite residential subdivision work being "dead" according to Winkle, Franklin Construction has balanced its schedule by doing more public works jobs, such as local and county lots, and commercial site work, such as office complex preparation. As a result, the company hasn't had to lay off any employees or cut any wages.
"Our area just doesn't have the glut of residential lot work that big cities do – especially now. While some developers in the Bay Area might be sitting with 500 to 1,000 unsold lots, maybe only 20 lots have been developed here this year,” Winkle said. “So, we have to get out in the market and do whatever we can."
Doing more for less
If aggressively pursuing projects is the first half of Winkle's equation for success in tough times, reducing operating costs is the second.
"One way we deliver an attractive value to customers is by keeping our cost-per-cubic-yard of materials down," Winkle said. "That means we need well-made, economical and dependable equipment for loading, moving and dumping those materials."
A few years ago, spurred in part by Tier 3 emission compliance needs, Winkle began updating Franklin's fleet of excavators and wheel loaders. "We worked with Brain Hamre of Hamre Equipment in Chico to weigh the pros and cons of buying new versus used. The bottom line with the new Terex equipment we chose was that they were the best machines for our needs and for the money. For the price of buying a three- to four-year-old piece of equipment with a big-time traditional brand painted on the side, we could obtain new Terex units and get better equipment."
In the end, Franklin Construction purchased one Terex TXL 500LC-2 and two Terex TXL 300LC-2 large wheel loaders. The company uses the TXL 300LC-2s at its asphalt plant to load materials into the feeder and push up stockpiles. Both the TXL 300LC-2s and TXL 500LC-2 are being used at other plants, too, to load sand and gravel, load trucks and push stockpiles. The TXL 500LC-2 is also being used at the company’s quarry (where they mass produce asphalt aggregate) for loading and pushing stockpiles.
Franklin also bought new Terex TC75 and TXC 300LC-2 excavators from Hamre.
The excavators are often used on job sites, as well as at the plants. At the plants they are used to stockpile material and make room on the pit floor. The larger excavators are also being used to sort out large boulders from the material pile before processing at the quarry.
"We bought our Terex TXC 300LC-2 excavator three years ago and we’re substantially impressed. It's a great size — not too big, not too small — for what we do in our shot-rock pit, mass excavations, truck loading and slope shaping. All in all, it sees around 3,000 hours of severe conditions each year and just keeps coming back for more,” Winkle said.
Terex Construction Americas, www.terexamericas.com
Mike Dunn is with Performance Marketing, West Des Moines, Iowa.
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