The Wal-Mart Guy: Questions & Answers About Building Wal-Mart Supercenters – Full


♪ [music playing–
no dialogue] ♪♪ Welcome to ITT 253, which is
section equipment and materials. Today, we have a dear guest,
friend, and supporter of our program,
Mr. Steve Wright. We call him the Wal-Mart guy. He builds Wal-Marts, and some of
you had the opportunity to write some questions for him. He will be kind enough
to answer these. If you have questions that come
to your mind now, on the fly, you can ask him. He is open to that. Without much ado, I
will give the microphone. Thank you. Well, guys. One time I came over, and there
was one girl in the class. I got 116 questions
from you guys. A lot of them have the same
interest, but I thought I’d start by giving you a
little of my background. You are all
upperclassmen, I guess. Do you know where
Oakland, Illinois is? About 16 miles away? That’s where I grew up. The point of me telling you that
is that every class I tell them, you don’t have to leave
home to be a success. You don’t have to go
to Chicago, big city. That’s a very small
town over there. I attended school here for
two years in the 1960s when the only technical program they
had for us was pre-engineering. After that, I transferred
to SIU, and my degree is in civil engineering from
Southern Illinois University. Doctor Wahby calls me the
Wal-Mart guy, and that is a lot of what I do these days. My company is located
in Sullivan, Illinois. It’s called Colcon Corporation. We started out in,
I was 33 years old. That was 30 years ago, so
you can kind of figure my age. Just building anything, a
fire station or an addition to a warehouse. But over the years it sort
of evolved into doing these big retail stores. Mostly I do Wal-Marts, but I
have built some Home Depots, the one in Mattoon,
for example. I’ve done some Lowes
Home Improvement Centers. That’s the sort of work I do. Jobs you would be familiar with
is the Wal-Mart here in town. We built that. We built the old one
that was on the westside. In my company now, we are
about a 50 to 60 million dollar a year company. So, you don’t
have to leave home. We work within about 300
miles of Sullivan, which takes in basically all of the
states that border Illinois. Occasionally, I have gone
as far as Ohio, Kansas even. But mostly within 300 miles. To get to the technical, there
are a lot of questions here about Wal-Mart’s size and cost. In size, they vary. A small town will get one
that is 100,000 square feet. Mostly everything now is
supercenters which have the groceries, and they
run all the way up to 230,000 square feet,
a 5 acre building. The cost on them complete,
including the site work, these days it runs anywhere for
a small one around 10 million dollars to a large one about 14. If you ever get any
unusual site conditions, they can be a little higher. On occasion, they will pick
a site that has all rocks and we have to blast
and things like that, and that gets pretty expensive. We had some questions
about the site work. Basically, the site part of
those is somewhere upwards of 20 acres. And there was a question
about how we handle drainage and things like that. Course these days, anything
big has a detention pond which is capable of containing a
run off of the parking lot of a building and allowing it to
drain off no faster than it did when it was just dirt and it
was soaking into the ground. That’s kind of the universal
criteria for drainage off of a paved surface. So these ponds can sometimes be
3 or 4 acre ponds, 8 feet deep. But they are a
very environmentally conscious company. Of course, they have sort of
been forced into that by the EPA because they got a huge
fine several years ago. Basically, Wal-Marts are a
structural steel frame, columns, beams, and barjoints. There is a steel roof deck
on them, and most of the time a rubber roof itself. The walls are various
kinds of masonry units. They sort of change. Maybe every 3 or 4 years they’ll
put a different finish on it. Currently, they are using
a thing called quickbricks, which is really just a concrete
block that the mold makes it look like large bricks. That is your wall system. Wal-Mart does not use tiltup,
pre-cast that sort of stuff. I’ve done that kind of work. Home Depots do use pre-casts
where it is hauled in on a truck and set up by cranes. We do not cast them on
the slab and stand them up, which is another method. Are you asking a question? Which do you like better:
the pre-cast or the blocks? Well, the pre-cast is generally
faster, but I build these. I don’t design them. So, Wal-Mart says
blocks and we lay blocks. The pre-cast takes more
preparation to get ready for it. And you have to
be very, very exact. Where with masonry, if the
foundation is off a quarter of an inch, you can make
up for it in the joints. If it’s off with precast,
you are kind of stuck with it. Beginning to end, I
think pre-cast is faster. Because you are getting 8
feet by 24 feet at a time. But it does take, it’s more
expensive equipment because you got to have huge
cranes to lift those things. It’s probably a toss up. It’s more expensive. Quite a lot more expensive. Pre-cast? Yes. Even though you would think
the other is labor intensive. Because you know Michealangelo
was laying bricks. It’s generally like
that, a trade off. Some of the architectural
pre-cast is pretty nice looking stuff. Then Lowes, who is the other
big company that we work for, they use block as well, mostly
it’s always decorative block now on probably the
front and two sides. The backs are
usually pretty plain. Let’s see. I kind of went through
the steel with you. There were some questions
about foundation size and things like that. Of course by now you
guys have learned it. It’s all a function
of sawbearing pressure in the location
where you are. You get in something with 1,000,
1,200 pound per square foot sawbearing pressure then
they are going to be huge. Occasionally, we have
actually built them on sort of mucky property. Now that becomes very expensive
because you have to treat as if it were an
elevated structure. Drive piling and then when you
pour the floor there are beams cast right in there. You count on nothing
from the soil. Have to drive the
piling down to bedrock. So, I haven’t done
any of those for a while. I mean those things will run
two to three million dollars more than one that
you put on solid ground. Sometimes just the anecdote
to hit some of these projects. We did one over in Indiana
where we filled a coal mine with concrete before
they could start building. They pumped concrete into
that thing for 5 solid weeks, 24 hours a day. So, of course, we kid about it. Not to Wal-Mart,
but around the office. I mean they could of bought the
whole town for what we spent on pumping that concrete. You do run into
some interesting stuff. This is a really
good profession. As long as I’ve been
at it, I still enjoy it. There is a real gratification
when your efforts result in something that is
there after you leave. I have a cousin who is an
attorney and makes a lot more money than I do. He hates his job, shuffles paper
all day and when he is done, there is nothing. I leave buildings behind me. It’s a pretty
gratifying profession. Concerning the concrete
being poured for five weeks, was it cost effective? Why didn’t they move the site? Well, you know. I really can’t answer that. It was about 3 1/2
million dollars to do that. It’s just like grout,
not really, no stone in it. I don’t know. I doubt very much
that they got surprised. It was an abandoned coal mine. In fact, when we bid that job, I
told you that they are usually 10 to 14 million, these
bids were 18 to 20 million for a 12 million dollar store. They rejected everything
and finally nobody, there were 4 bidders on it, and none
of us would bid it firm for that concrete pumping. So, we finally got it where
we bid everything but that, and then they just paid us
cost plus a 10% fee to do that. I just can’t hardly believe, as
thorough as they are, that they got fooled by that,
that it was a surprise. They have not done any
more I can tell you that. It took 15 months to build that. Generally a Wal-Mart,
we’ll be there for 7 months. At the end of the 7 months,
we turn it over to Wal-Mart, it takes them about 6 weeks to
set one up, bring in the shelves and all of their
stuff, stock it. We leave someone there
that entire period because a lot of stuff gets damaged. We have to kind of fix it,
so on the grand opening it looks brand new. Generally, these days, and I’ll
get into why, I have three supervisors there. We don’t do any of
the work ourselves. We are a construction manager. We hire guys to do the
concrete, guys to do the, or subcontractors to do
the electric and the mechanic, all of it. I still have three supervisors
there, which gets into several questions about what kinds
of problems we run into building these things. First of all,
the schedule is key. My company has never
been late building one. Most companies that I’m
aware of that have been late don’t work for them anymore. They are a killer
about the schedule. Wal-Mart plans these things
anywhere from 18 to 24 months ahead of when they
are going to open them. They schedule a delivery of
stuff to the store 18 months ahead of time. I’ve been down to Bentonville,
Arkansas where their headquarters is. A lot of times. You think, biggest private
company in the world in Arkansas. There is nothing
fancy down there. No giant office building. They are very Midwestern
people, but they are huge. They are a very demanding
customer, but I’ve always, I’ve been building
them for 25 years. I find them very fair. The first one we built
was the old store in Mattoon. Most of you fellows are probably
too young to remember because that was 1981. We’ve been building
them ever since. They do about, they plan
to open 400 stores per year. At any one time, there
is probably 300 of them under construction. And with that 7 to 9
month construction period, you get a little
bit of overlap. Last year they made
378 new openings. I’ve not built one in a
town that didn’t have one for the last 8 years. Generally, we are building
big ones across the street from little ones. A lot of people resent them,
and I told you where I grew up and we don’t have any
stores left over there. It’s big companies
like that that do it. But they are the biggest
construction user in the world. In fact, I bet 2 or 3 of you
will wind up working either for Wal-Mart or for somebody
that works for Wal-Mart. Because there are
more opportunities. We constantly try and steal men. Our competitors try and steal
each other’s supervisors because they are in such short supply. When I hire somebody at
my place, it takes about, depending on how sharp you
are and how ambitious, anywhere from 2 to 3 years
before we think you are ready to go out and be, pretty
much, in charge of one of these projects. I do all that work. I have 25 employees
is all I have. Getting back to, I had
three people on the job. One guy, pretty much, is
there to ensure the schedule and the quality. He doesn’t control the cost very
much because we do most of that from the office with
the project managers. Pretty much, by the time we
start work, everything major has been contracted out, and
we have a fixed price to do it. If there are money issues,
they sort of wind up back at the office. The other two people, one spends
maybe half their time being a clerk and doing the record
keeping, but some new issues have come up in just
the last few years. It’s not just Wal-Mart. It’s all the bigger users
of construction. EPA is really, federal EPA,
is really becoming stringent about stormwater pollution. During construction, you see it
out there, even when they are building highways, there
is mud all over the place. Wal-Mart’s policy is
zero stormwater pollution gets off those sites. One of my guys spends most
of his time looking at that. We have salt fences and all
sorts of devices to control this water, put it where
we want it, let it settle out and when it does
leave the site, it’s clear. We do that to the extent,
and I may have somebody that we got from job service
standing at the gate, say we’re pouring concrete,
he is standing at the gate with a high pressure washer. If a truck comes out with mud
on the tires, we wash it off before he goes on the street. That might be 100 loads a day. It’s really become a big
issue to the tune of 250,000 to 300,000 dollars
each job just keeping. It’s interesting the things that
are pollution that you just don’t think about. We don’t let our contractors
fuel their vehicles on the site. Because if they run a
gas tank over with diesel that is stormwater pollution. It goes into the ground
or washes away. Plumbers for example use
a lot of oil to cut threads on their pipe. They have a big plastic baking
pan that we make them do that work in, so it’s
contained in that pan. The jiffy johns are
sitting in plastic trays. I mean that’s how tough
EPA is getting now. I think those are
the kind of things you don’t
hear about here. Safety has always been an issue. We have a 45 minute to an hour
safety meeting every week. Everyone is required to attend. When a new person comes on
the job, they are indoctrinated before they are allowed
to go to work as to what our safety policies are. The newest thing is
illegal immigrants. I know you hear
about it on the news. There are about 200, from start
to finish, we probably see 200 different workers
on those jobs. These days, 40% of
them are Hispanic. We are required by law to verify
that my employees are entitled to work in the United States. In my case, I don’t have
any foreign nationals, so it’s pretty easy. There is a program you sign up
with the federal government, and you can check
social security numbers. I am also required by Wal-Mart
to ensure them that all of our subcontractors have
legal employees. And a lot of those
are foreign nationals. The real world of the illegal
immigrants is what we are experiencing since this
became such a hot topic a year or two ago. There are fewer and fewer
subcontractors out there doing the tough jobs. The Hispanics are willing
to do work that I guess Anglos are not. Masonry contractors are tough
to find, drywall contractors are tough to find now,
roofing contractors. Those guys come up here from
Mexico, and they are more than happy to do that
kind of work. They are well paid to do it,
but I think a lot of them were illegals. It’s something you would
learn if you go to work for any good-sized company that
is watching that kind of stuff. There are rules about
checking people’s credentials. You must do this, but if you
get, for example, a passport. If you got a passport,
you don’t need anything else. If you don’t have a passport,
then you’ve got to have a drivers’ license and a birth
certificate, or this or that. There is any number of
identification that will work. But once you’ve asked for that,
and it’s been delivered, even if you think it’s phony,
that’s the end of it. You cannot ask for anything
else because that’s a violation of civil rights. It’s really become
a tough issue. We have just instituted
this this year. Everybody on our job has a
badge with a photograph on it, his name. We have a guard at the gate. If you show up for
work without your badge, you just don’t work that day. If we’ve seen the guy 40 times,
and he comes to work without his badge, he goes home. Because that’s part of
our contract with Wal-Mart. What you’ll find that
you got in the workplace. All your technical education
allows you to do your job, but you run into things that I’m
not sure you’re told in school because there is just not
enough time. My experience has been is that
there are three things that any client is interested in. It’s the price, the quality,
and the schedule. They already assume you
know what you are doing, and if you don’t, you won’t
last very long. Those are three things that if
you don’t remember anything else I tell you today. That’s what clients are
interested in. All the Wal-Marts we do, and I
have done over 100 now, we’ve always been the low bidder. We don’t get favors. I mean, if I were bidding one
and one of you guys was bidding one. If you beat me 100 bucks, and I
had done my 100 and you had never done one, you are going to
get the job. They are absolutely fair about
that, they don’t negotiate later to get the guy that they want. They are very selective about
who they let bid them. Their assumption is that
they are happy with any of these guys. To work for Wal-Mart now, you
have to have been a 25 million dollar a year minimum contractor
for 5 years. To actually be a supervisor,
they want 5 years, minimum of 5 years experience. Old story for young people,
don’t want you if you don’t have any experience, if you
don’t have any experience you can’t get a job. Then how do you get experience? But we have a program there at
our place where for the first 2 to 3 years, we run young
employees in and out of the office and get them acclimated
to it. We take the position that these
4 years you’ve spent here is experience. Wal-Mart has never quarrelled
with us about that. That’s kind of how you get
working for either them or a contractor. Someone wanted to know how many
stores there were. About 4,000. Is that worldwide? Nationwide, probably includes
Alaska and Hawaii. No, their international division
is something different. I’m just basing that on last
year when I was in Bentonville. We always go down there at the
end of the year, and they were telling us something over 3,600. If they did this year what they
did last, they have another 350, 400 in place. There was a lot of questions
about whether or not they were the same. They are really not. Certain municipalities want it
nicer. Wal-Mart usually tries to comply
with that. I was just in Hawaii for about a
week, and I saw two of them out there and they are green. I’ve never built a green one. They try to blend in with
whatever the city fathers want. I know in some quaint areas like
New England or up in the Rocky Mountains, they really do some
fancy things, that won’t look like what you see around here. I had a question about
how they pay us. They are terrific. We bill at the end of the month. We are usually paid by the 25th. Retainage, the 10% that they
hold each month, we’ll get half of that within about 60 days of
completion. The other half may be up to six
months. They are about like everybody
else. They keep your 5% a long time. I think I’ve covered a lot of
the questions you had. So why don’t you. Do you got any new ones. How do you manage to be the
low-bidder every time? I’m not. I’m the low bidder about 1 out
of 4 times. We’ll bid 40 or 50 of them a
year. Well that’s not true because I
only do 5 or 6 a year. So, we must be bidding about 25. One reason we are consistently
successful is, I told you, that the first one I did was 1981. There has never been a year
since then that we haven’t done some, and it’s just grown. In 1981, when we started working
for Wal-Mart, the company did just under 2 million dollars
that year. My company and the people I have
working for me, we have almost all local people. We’re really flexible. I’ve told you about some of
things that are coming up new and we just adapt to it. Colcon right now, we’re the
oldest contractor Wal-Mart has. Just a little podunk company in
Central Illinois, but we’ve survived all the purges and
changes of management down there. Simply because I have understood
for almost since I went in the business, this thing about price
and schedule and quality. If we get behind because
it rains for three days, then we work 7. If that’s not enough, then we
work 7 days, 12 hours, or 16 hours. I just believe in that. We made a deal that we would
have it done on this date. You give me this much money. That’s the deal. It’s not, oh, I’ll get it done
if I get around to it. You want to see some of that
attitude, go watch home builders. That’s the truth. There are some professional ones
out there, but generally speaking there are sort of two
attitudes about construction. I got a job, I got to
get it done and move onto the next one. Or I got a job let’s make it
last. I just happen to take the other
attitude about it that I want to get on to the next one. There were some questions about
whether it was boring to do the same thing over and over. I suppose the guys. I’m not out on the job, just to
visit them anymore. There are always enough
different or the problems are different that. That it’s not that boring. I suppose they would probably
rather do something a little prettier, maybe a little easier. This is what we do, and we are
real good at it. Personally I don’t find it
boring. Although I have to admit that
over the years I’ve kind of changed. I don’t think of myself so much
as a civil engineer, as I do as just a businessman. As you grow, you wind up having
time to do less and less of what you ever got into the business
for. I did it because I liked to
build things. I never build anything anymore,
even though I’ll tell you I did. My superintendents build things. That’s the best job in
construction to tell you the truth, in my opinion. Superintendents? Yeah, because you can go
home and tell your kids, “I built that”. And you really did. I would tell my daughter that,
and she knows better. I did provide the vehicle for
them. Are you a union contractor? No, I’m not. Wal-Mart is not a union client. I have to admit. I pick my spots. I won’t go work in Chicago. I won’t go work in East St.
Louis. There are places where the
unions really give us a lot of hard time. A lot of places we work, we’ll
get pickets and stuff. I don’t know anybody’s
background here. I’m not anti-union. We mix them up. But what we run into is, for
example, we’ll award two or three sections of work to union
contractor. The next thing you know, the
ones that didn’t get the work are out there picketing and the
ones that did get the work want to honor that. We don’t tolerate it. I’m very upfront with that with
everybody is that we’ll give you the work, but you’ve got to do
the work. I don’t care about what other
deals you’ve made. It’s not nearly the trouble it
was in 1976 when it started. I used to never work in Peoria,
and I’ve built several in Peoria and that area lately. Right now, just to tell you how
far we go. Springfield, Missouri, which is
damn near Oklahoma, Anderson, Indiana, which is up north and
east of Indianapolis, we have one in Galesburg, Illinois,
Lincoln, Illinois. We just finished one clear down
in Flora, South Effingham, and Washington, Missouri, west of
St. Louis on the Missouri River. So, we really travel. My guys are out all week. Something to think about doing
this kind of work. Since we only go up to 300
miles, it’s really not a problem to get home for weekends. But it is a problem if you have
an emergency in the middle of the week and you got a 4 or 5
hour drive ahead of you. The company owns 3 airplanes
though, and I’m with the guys because I know how tough that is
to be away from your family. If they need to get home,
then I’ll send the airplane after them. It’s hard enough without sitting
out there thinking my kid broke his arm and I’m not there. I’ve just started doing that
more over the last 5 years because we keep going farther
and the jobs take longer. People from the office have to
be out there a minimum of every 10 working days. You can think if you are driving
almost to Tulsa, that’s not a one day deal, that’s a two day
deal. In the airplane, we can leave
Mattoon airport at 7 o’clock and have them back here at 3:30. Or we can get the
superintendents in an emergency. So, while on the job do they
just stay in hotels? Yeah. Well some of them rent
apartments. We are there for several months. How much do you pay on average? Okay, what I try to do, and I
use my accounting firm, and I use industry standards. I try to do is look at what the
wages are in this area for whatever job it is I have. Then I try to be on the high
side of the median. Not at the top end, but I want
it to be enough that I hire a guy and I’m training him and
he’s not looking for another job. What I do. I tell you a lot of stories
about my life. At the end of each year, I take
10% of what we make and I distribute it amongst my
employees. This will make you smile. My project managers, estimators,
and project managers they work on a commission base. They get about 40,000, 42,000 a
year. But I got one fellow whose
salary is 42,000 a year and he made 1/2 a million bucks last
year. And everybody at my place is on
incentives. These supervisors, the full
fleged supervisors, I pay them 1,000 a week. So they are getting 52,000 a
year. I rent their trucks from them
because I don’t like owning equipment. Most of those guys last year
made upwards of 75,000 dollars. But usually fresh graduates I’m
hiring at about 600 a week. First year, I think, I hired two
guys last year. They made close to 40 on a
30,000 dollar salary. How many do you hire each year? That’s the most I had hired for
several years. One or two, I suppose. A week from today, I’ll be 64
years old. I don’t know how much longer I’m
going to do it. So I don’t want to get a whole
lot bigger. The company, I think will go on. Some of my employees would like
to buy it when I get tired of it, I guess. I’ve got really good employees,
so I’m able to take more time off than I used to. Or come and talk to young guys
who want to do this for a living. That is kind of the marketplace
to tell you the truth. A lot of my competitors, and you
know it’s funny, you become friendly with your competitors. They are not your enemy. There are ones that will cut
corners, and they don’t usually last too long. With the quality guys, I know
at least a half a dozen contractors. If we go somewhere and can’t
find a plumber, then I can call and say, “Do you know any
plumbers in Washington, Missouri”. And they’ll tell me 3 or 4
guys, and I would do the same for them. Wal-Mart has so much work that
none of us need it all. We call it the big river of
opportunity and all we need is a bucketfull. These other guys they tend to
pay their guys more salary than I do. But most of them have no bonus
program. When I got out of college, I
went to Florida. I lived in Fort Lauterdale for 3
years. I came back home because I
couldn’t stand it. While I was there, I was a
superintendent for a guy. I built a sackreet plant for
him. I brought it in under budget,
and he made an extra 40,000 dollars. He gave me 100 dollar bonus. I started looking for a job the
next day. I was really offended by that. So, that’s why I’m generous with
my guys. They are doing the work. Those guys have made me a fairly
well-to-do guy. You got to, all the dollars are
not mine. You want to try and find
someone like that who values what you do. The big trick with being a
success, I think, is you got to make enough money to live on. The real key is to find
something you really like to do and learn to do it really well. And the money just shows up
because I never had any goal to have a company this big or make
a lot of money. I just wanted to do something I
liked. You know you got to do it
five days a week for the next 40 years. You better like it. You just got to remember. Whatever deal you made, just
live up to it with your customer or client. From day to day, how is work
being advanced meaning suppose you have an item of work, like
walls or electrical wires, who gives orders to commission him
to start this day, and then how would inspection go? We use critical path method to
schedule this stuff. We monitor it all the time. I have these 3 people there who
are seldom in the trailer. They are out there walking
around making judgements about if this is progressing. One thing has happened with us
now after doing them so long, I know that between week 21
and 26, we better have 12 electricians on the job or we
won’t get it done. So you go out and you count
noses. If it’s only 10 and they are
working real good, we won’t say much. That’s one of the biggest
problems we fight. Especially, with subcontractors
who haven’t done very many. There is no question than an
electrician knows more about wiring that building than I do,
or probably my superintendents do. But we do know how many it takes
to get done on time. So, if they are only out there
with 8, I’m pretty sure it’s not going to work. And Wal-Mart’s construction
managers who come out a couple times a month, they know it too. If they go out there and count
noses, we better have already yelled at them. Second, if a subcontractor
doesn’t show up when he is scheduled to, we call him that
day. We give him about 48 hours to
get going, then we put a lot of pressure on him. We send him telegrams
threatening to fire him, things like that, replace him. Because you just don’t
have, I told you the big ones are 5 acres. Five acre buildings and 20 acres
of site work. You’ve only got 7 months to do
it, which means around here, if you start the last day of March
and it’s nice and you get done the first day in November,
you pretty much used up the good weather. Like right now, we are coming
down towards the end of the season. October will be fine and usually
most of November. But everything we’ve got needs
to be closed in so we can work all winter. The thing that usually
fluctuates because of the weather is when we do the
parking lot. If we start now, let’s say, then
we don’t have enough time to get ready and do the earthwork, get
the stone down, put the asphalt paving or concrete whichever it
is before weather gets bad. So we would have to do that next
spring. That’s probably the biggest
adjustment. For the building itself, there
are steps to do it. Sidework is the only thing that
really changes a lot. Wouldn’t you start with the
parking lot first? No, because it tears it up. We grade it and then we’ll put
temporary roads in and use large stone, it’s pretty rough. First thing we do is build the
pad, the building pad. That’s the very first thing we
do. They are maybe two feet out of
the ground and again 5 acres, 200,000 square feet. Get that up so they can start
foundations. Then the site contractor he
usually builds that. Then he goes out and starts
doing the grading. While we are building the pad,
the utilities are going in, underground sewer and the water
and the electricity. So that all that excavation is
done and filled back in before we start smoothing things out. Ideally, which seldom happens,
what you would like to do is that order and then the
next thing you do is put the rock down. The stone under the parking lot
and the first layer of asphalt. Then you have something to work
off of. It’s clean. It helps you with all of this
EPA stuff I’ve been telling you about. It just really doesn’t happen
that way very often. But the parking lot is the last
thing we do, as a matter of fact. They want it clean, and they
don’t want ruts in it from heavy concrete trucks. Most of it, like where you park
your cars over there, that is not made for heavy
traffic. I’m sure all of you have driven
by Wal-Mart in the middle of night and there is 14 semis
parked out there and guys are sleeping in them. Next thing you know I get a
call that, “Hey, my parking lot is breaking up.” I actually have to send guys
there with video cameras to film these trucks that are parking
there in the middle of the night when the manager doesn’t see
them. That’s tearing up their parking
lot. Now the part where they bring
their trucks in, that’s heavy duty. It’s like an interstate
construction. What are some examples of
changes in technology from the time you started until now in
dealing with materials, equipment, metals, etc? Any of you guys own a slide
rule? Or even know how to run one. That’s a big change. You got those. I’ve been fortunate that I’ve
stayed up with the technology pretty well. I mentioned that I’ve got a 25
year old daughter. So, I had her pretty late in
life. Because I kind of understood,
she was going to have to know about all of this stuff,
I forced myself to be computer literate. That’s probably the thing. The methods, I mean you’ve got
better equipment and more environmentally friendly
equipment, but there are still cranes or there are still
bulldozers or there are still scrapers. They are just bigger and newer,
and they work better. I would think the biggest change
has just been using computers instead of doing it by hand. It speeds everything up. And then of course, we have
these new issues that people are concerned about. They’ll about beat you death
about safety, pollution, and immigration. That really don’t have a whole
lot to do with construction. Somebody asked me, I shouldn’t
even talk about it. I have never had a bad accident
on my jobs. Certainly no deaths, really no
serious injuries. A few broken bones. We are pretty strict about
safety. So OSHA is happy with you? Yeah. I once got a 300 dollar fine
because we didn’t have rails on some scaffold. It was an oversight. It was our fault. My superintendent knew it, and
let him get away with it. But we just don’t. And nobody likes to wear a hard
hat. Everytime you lean over it falls
off. Too bad, it’s part of the job. Is it break? Go ahead. Do you prefer to own some kinds
of equipment or do you rent? And it’s just me. I don’t want to own anything
that can be rented. Part of the reason for that is,
this is a management style. I think it’s any business. I hate debt. When you go buy a 1/2 a million
dollar piece of equipment, and as you know our friend Charlie
Adams owns lots of that stuff. I don’t want to own it. Reason he does it is for
convenience, not because it’s that cost effective. I rent sky tracks, something to
lift material with. Maybe a bobcat to clean up trash
with. He’s got to have that big
stuff, and he’s got to have it right now. Even big highway contractors
like him will have rented equipment out there. Because the particular job, you
need 12 and he owns 8. I don’t do that kind of work. On the rare occasions we when
need something, I’ll rent it for 2 or 3 months, paying a huge
price. I’ll tell you what I do own. I own generators. I own trash pumps, 2 inch water
pumps. I do that because of this EPA
business. If we get a big rain, we
got to keep that stuff on the site somehow. Sometimes you don’t have time to
go to 3 different rental stores to find what you need, so we own
that. Then, I own trailers to haul it
in. I own 2 pickup trucks. Yeah, that’s it. How practically successful is
the just-in-time concept? I don’t. For my point of view, I don’t
want it just-in-time, I want it there now. If we don’t it until January
14th. But I have to admit, here’s
what we do and here’s what Wal-Mart does. You get it here, so we know we
got it. I’ll pay you for it. In construction, I think it’s
foolish not to buy because everything is priced. Usually any pricing quotation is
good for 30 days and plywood is 32 dollars a sheet. Three months from now when you
need, it is 35 dollars. If you had bid it at 32. So, get it here, protect it. I will pay the sub and Wal-Mart
will pay me. Now I think for manufacturing
it’s probably way better. You know you really don’t need a
bolt until the thing gets down the assembly line to where the
bolt goes. It’s repetition. Ours really isn’t repetitious. You really have to be flexible
with these. Maybe the concrete guy is having
a problem. And the electrician can’t start
work until the floor is there to run his equipment on. So, he’s got to shuffle over
here and maybe work in the EDC, the Electrical Distribution
Center, instead of running overheads like he planned to. You know Wal-Mart just looks
like this. They light them up to about 80
foot candles. You’ve probably got 100 in here. How hard is it to add on to a
store once it’s built? I hate additions. It is difficult. But the most difficult thing is
you can’t close them. Not only can you not close
them, you can’t get those customers
dirty. Usually, they do a lot of it,
remodels. I can’t tell you the last time
we got one. Because when they insist that we
bid and we’re just so high that. They may tear a whole in the
wall in three places. You got to build this queen
barriers to keep the dust off of the customers and get them new
entrances so they are safe. The manager is just yelling at
you all the time. I hate remodels. But it’s difficult. Well, I’ll give you a good
example. About 99, I think, we did a new
store in Mt. Zion in Illinois up by
Decatur. At the same time they were
adding on, it was 180,000 square foot store. At the same time, they added
40,000 feet to the existing store, which is on the north end
of Decatur. Ours cost less and we got it
done faster. So, our 180 cost less than 40,
and we were done 2 months sooner. I can’t even remember the dollar
numbers now, but I guarantee you you will spend a million dollars
protecting those customers and keeping them open. Just insane. But maybe they are landlock. In certain places, a new
piece of land is the price of the store. I’m sorry. Have you always done commercial
buildings? Since I’ve been in business for
myself, yeah. Commercial or institutional,
not residential if that’s what you are asking. [unclear dialogue]. I’ve built 2 houses both for
myself. I was over budget and late both
times. I heard somebody grouch when I
said something about homebuilders. Whoever it was give me the name
of that good one you know because I’ve got 40 people who
would like to know who he is. It does seem to be very typical
to not worry about the schedule. That is so foreign to the way I
have to do mine. One thing about commercial work
is that you are not dealing with anyone’s wife, generally, that
wants to change it. Oh that’s not the way I thought
that would look. The commercial user or here’s
another observation from 30 years of this. Wal-Mart would build no
buildings if they could sell that stuff out in the parking
lot. Since that doesn’t work, if they
could sell it out of a tent that would be the next best choice. Because it’s cheap. My point is all we are is
necessary evil to any business. Buildings are expensive. A good example is look at this
university. Who knows how much money is
invested here. You use it 8 hours out of the
day, maybe 10. Not very practical. Wal-Mart runs 24 hours a day. Most manufacturing companies run
24 hours a day. That’s why there are a lot of
advocates that school ought to be year round. Maintenance, commercial building
of pleasant appearance and good quality that’s not going to
break or wear out quickly. That’s the quality part of it. The price part of it is no
building at all is best. Schedule, since I’ve got to have
this building and you’ve given me a low price and by God I need
it. Seven months from now, and
honest to God guys they don’t mean 7 months and one day. If my completion date is,
well I’ve got one coming up November 18th. If we don’t give that store, on
the 18th, there is going to be about 30 Wal-Mart semis show up
there. I’ve never had that
happen to me. Have you ever gone over the
agreed upon completion date when building a Wal-Mart? No, what are you guys? Twenty, twenty-two years old? I didn’t know that
when I was your age. I am really a believer
in a contract. I think my dad taught me that,
and his dad probably taught him. It’s like the old thing around
here that if you give your word, you’ve got to do it. Well, we have agreed to build. They gave us a set of plans. We were going to build that, and
we were going to have it done on this day, and they
are going to give me 14 million dollars to do it. We both got to hold
up our part of that. I’ll tell you to avoid, now
we have had jobs where I remember one year, we were
building one in Carbondale. I spent 3 years down there,
didn’t have two inches of snow the whole time. We got two 10 inch
snowfalls in 3 days. Even Wal-Mart says look guys,
you got to shut down here. We are going to give you
a two-week extension. But you don’t ask for them. The easiest answer is no. But they are realistic
sometimes, and if they know it soon enough then the 30
trucks don’t show up. The problem you get into is
those 30 trucks are supposed to come there and unload in 48
hours and be at some other new job site a week later. If they are sitting on
mine, they are mad. It’s a good thing to learn. It doesn’t have anything
to do with college. If you make commitments,
you got to live up to them. We’ve managed to do it
100 and something times. What’s the penalty
for being late? You don’t get to build anymore. Actually, they do have–
that’s the worst penalty. Actually they in the contract
it says if we are early we get $1,500 a day. If we are late, then
we give them $1,000. But think about this. They do about a million dollars
a week out of those stores. This is all public information. They make about 8% on that. So, that’s $80,000
a week profit. A thousand dollars a day
doesn’t really make up for it. You got to have something. I have to admit that I’ve never
collected a bonus either. Well, I did get one from Lowe’s
once for being done early. The big penalty, oh I suppose
you could get away with being late once if it wasn’t insane,
but I’m postponing my one free one as long as I can. There’s a few things
you just don’t do. You don’t let someone get
killed on your job site. One of our competitors was using
the same electrical contractor we were, and this was
recent last 2 months. Pulled the crew off of our job
because they were behind on one in Bloomington, Indiana,
sent them down there and electrocuted 5 guys. Because they were behind, the
general contractor would not let them shut the power down and
they wanted to hook it up hot. Some tool fell into 440 volts. Only one of them died. There is just no, how are
you going to explain that to someone’s family. We were too busy to
turn the power off? I was wondering if the
job is $10 million, how much of that do you get? Well, that’s on extra
work we get 10%. That’s something else I
want to talk to you about. But to answer your question,
that’s kind of priveleged. My company will run anywhere
from 6 % to 8% net before taxes. That’s after paying
the overhead. I kind of forgot about this. I wanted to run through this
before, change orders. Here is something that Dr. Wahby
and I always differ on this. You guys are, or will be taught,
you never do a change order without paperwork. I’m here to tell you, if
you take that position, that 7 month Wal-Mart
will take you three years. We always, if they tell
us, we are not going to have a vision center up there, we are going to put
a camera shop in. And the vision center
is already built or not. Then we start changing right
then, and we keep track of our costs and we
negotiate it at the end. Because I know
my client is fair. They have never beaten me
out of a dime that I’m aware. We do it. Is Charlie Adams still coming
or is Hollie coming now? Or both of them? [inaudible] He’ll tell you
the same thing. Even working for the Illinois
Department of Transportation. There isn’t enough time to go
through that beurocracy because I can’t tell you
how many levels. Well, in Wal-Mart, a change
order up to a million dollars can be approved by the vice
president of construction. If it’s more than that,
and they have been, it can go to the
board of directors. Can you imagine getting to
the board of directors, it’s like going to the general
assembly for a big change order on a highway. It’s months. And you’re sitting there
not doing the work. It’s real world, fellas, you
got to pick your spots. There’s people. I have to say this. I would not do it
for Home Depot. I’d do it for Lowe’s,
I’d do it for Wal-Mart. I don’t have to have
all the formal stuff, but I want something
in writing. We want you to change this. What is the reason you
want changes in writing? Because they want to
argue with you afterwards. So, this way we are
agreeing to each other with written thing is just for
guaranteeing that the person. If somebody proves before
that he is a man of his word, or a person of his word. His word is enough? Yeah, what I ran into
with Home Depot. For example, when we built
that one in Mattoon, they were just starting their
kind of big expansion program. We installed a fire
alarm system. The one that was specified. Nobody ever quarrelled
with us that it was right, but they changed
to a different one. They said, “we want to tear that
one out and put this one in.” So, we did. That is electrical
contractor work. So we told our electrician,
go ahead and do it. We watched them, and we don’t
let the subs skin our client. These were guys we had
worked with many times. They did it, they were
efficient, they gave us a bill. We take the bill on,
and it’s too much, according to Home Depot. I said, you know, it shouldn’t
have taken any longer to put that one in than the first one. Well, maybe, but we had
to take the first one down. What about that? They wanted to argue with that. Then they did the same
thing with light fixtures. We hung one kind, they
changed to the high bay kind. Then, they wanted to argue
about how much it cost. Wal-Mart, now when we
have something like that they want to see how many
hours at how much an hour. They might. These guys are building
400 stores a year, you are not going to fool them. If they are paying $58 an
hour for an electrician, then $58 or less is
what they want to see. You’ll get subs who are
a little behind, maybe, on money on their
part of their work. They’ll try to make
it up on extras. We’re sort of the first line of
defense for Wal-Mart on that. We kind of know
what it ought to cost. Plus we keep track of how many
guys are on the job every day. That’s why I say I
got three supervisors. I wouldn’t be surprised if I
come and talk to you next year and I only have 4. The administration of those
things is more and more complex. You ever lost money on one? Once, about 20 years ago. And no, It wasn’t bad weather,
I have no excuse. We just didn’t do
a very good job Bid it too cheap to start with,
and then didn’t do a real good job managing it. But, we’re pretty good. You know, you do a 100. I always like to tell
people when we leave, there’s not enough lumber left
over to have a wienee roast. We don’t miss a lot
of tricks on it now. Then, they’ll change
the prototype. Let me see, what was the last… We used to build several
car dealerships. It’s interesting. Build a 35,000 square
foot car dealership. Or a quarter of a milllion
square foot Wal-Mart takes the same amount. They all have the same pieces,
sort of the same sequence and in order to get one done in
the same amount of time then you put the 12 electricians
out there instead of 2. That kind of thing. One of the reasons I’ve gotten
away from doing smaller stuff is I have these superintendents,
and I have five sets of these three-man crews. In seven months–or say nine
months by the time we’re really free–those guys will go
out and make $600,000-$700,000 gross profit. I’ve got to pay overhead
out of that, but…. Or they can go build a million
dollar, two million dollar car dealrship. We make a higher percentage–
maybe we make 10%– so we make $200,000. Same amount of time My limited resource
are my people. It’s not that I can’t
get enough asphalt or I can’t get enough fuel. I’ve had any kind of
[unclear dialogue] you know, you’ve got resources In my case, my limit is how many
crews I’ve got that are capable of doing this in the price,
schedule, quality they want. One thing, I am very good for
people like you because I like young guys,
or young women. You bring them in, you give
them the best job they ever had and as they take on
more responsibility, you give them increases
when they need it, and you teach them to do
it the way we want it done. My oldest superintendent’s
probably 56, 57 years old. Of these three guys one’s
kind of the senior guy. The youngest one of those
is probably 33, yeah. He’s really a superior
young guy., you know. He loves it, he picked it
up fast, he’s not intimidated. One of the things you find as a
young person, you’re out there dealing with construction
workers that are my age. They’re not very interested
in what you’ve got to say. They know better. I fought it for years. I’d say I went into business
when I was only 33– 50, 60 year old carpenter really
didn’t think i knew much, and I probably didn’t but I did
know when it needed to be done. I couldn’t have done what he
was doing, but I did know when it needed to be done About 100 contractors is all,
nationwide, that build these Wal-Mart stores, and every
one of us needs help. Honest to God, every one of us. Come to my office and we’ll
give you a list of everybody that we know. When you start
applying for jobs, send everyone of them a resume. Just understand, they
have to be done on time. So, but there are, there are,
in Illinois there’s probably six of us and then you’ve got
them in, you know probably that many more in Indiana. There’s seems to be a
lot of them in Missouri for some reason, 8 or 10. But you know, you start
thinking about it, nationwide, there’s a hundred
of us, not many. Yeah?>>male speaker:
What sort of degree do you require someone to have to
be in a supervisory role? Some sort of engineering degree?>>Steve Wright:
Nah, some of the best superintendents
I had came out of Lake Land’s
engineering tech program. Two year deal. I , I think you need some
education, because the technical part of it takes too long to
learn with on-the-job training. But, what I use of my,
I don’t mean this to sound like it’s wasteful, I
just chose to be a contractor. But what I use of my education,
I could have gotten one year if they have taught me
all at the same time. I could have used more
business courses, because I had some
entrepreneurial spirit I guess, I wanted to make
my own decisions. Because I’ve never been afraid
to suffer the consequences if I was wrong, and
I’ve been wrong. I’ve made some costly mistakes. But you just fix them and
move on, you don’t whine and looking for somebody
else to pay for it. I think that all came, I was
in the Navy in Vietnam era, and I got out of there and I
knew I wanted to minimize the number of people telling me what
to do, cause everybody told me what to do in the navy. This place is way different
than when I was here. You guys are about half
mile south of anything that was here when I was.>>male speaker:
So have you ever hired anyone out of the Industrial
Tec Program here at Eastern?>>Steve Wright:
Haven’t had anybody apply. I would, you know, assuming
we needed somebody. Now I’ve got this young guy i
was telling you about that’s such a super star for us, he’s
out of ISU’s CM program. But no, none of you guys have, since I’ve been coming
over here you know. We’ve got a lot of Eastern
grads, my controller is an accountant, graduate
accountant from here. Actually you know, it’s
interesting, I won 100% of the company, but a guy that I
roomed with when I was here is my good right hand. He’s got an MBA from Eastern. He [unclear dialogue]
a degree in MBA. I’ve got an MBA from
University of Illinois. Got another guy with a
business degree from here. I’m the only Saluki. I like to see the education,
only cause it proves to me that you can stick to it
and finish something.>>male speaker:
Do you guys do internships?>>Steve Wright:
Uh… well, not.>>male speaker:
[unclear dialogue]>>Steve Wright:
Well, we try to cooperate with things like that. The problem you get into for us,
there’s really not a lot you can learn there in the office,
with those project managers, because it goes so fast. If you’re not there day after
day after day to see that whole process and to actually just sit
there and listen to these guys and how they’re negotiating
these contracts. You know it’s pretty interesting
to go out on the job sites, and I think most of the classes
have been able to do it. The closest one I have
right now is in Lincoln. So you’re looking at what? A two and a half hour drive. I don’t know, are you going to
try and make that trip or not?>>male speaker:
What stage is the project at?>>Steve Wright:
Oh it’s great. I mean it’s, it’s, there’ll be
a hundred plus workers.>>male speaker:
What stage of the building are you at?>>Steve Wright:
I mean it’s [unclear dialogue], it’s roughed over, you know
they’re working outside, they’re working inside.>>male speaker:
[unclear dialogue]>>Steve Wright:
Yeah, I mean they’re past setting the steel, pouring
the early concrete, but there’ll be a lot going on. You know, it’s October,
have to hurry.>>male speaker:
[unclear dialogue]>>Steve Wright:
Yeah.>>male speaker:
What would you say for to a student who is graduating
in two or three years, and he wants to start
his own business?>>Steve Wright:
I would say work for someone else for five years. It’s too hard. We’ve talked about this before. it’s so tough now to get
a technical degree, even in four years,
that there’s no time to teach
you any business. But if you want to be in
business you have to understand that stuff. It took me ten years. I was in business for seven or
eight years before I could read a financial statement. My gosh, I can read
them now, you know, just the little management. It’s amazing just the little
things that you can do to make your business more profitable. You know, I learned get out of
debt as quick as you can. Now I’ve been at it so long,
we have a little extra cash. I keep it invested. Last year I think, we made
$120,000 just off of interest, just from having
our cash invested. I mean it’s like doing
a small job, for free, found it in the street. And it’s little stuff like that. But you can’t do it
until you’re out of debt, so you wanna get out of debt. Not hey I’ve got my first big
check, I’ve paid everybody, I’ve got enough money
left to get a BMW. Pssht, don’t do it. Just invest it and five years
from now you can have a bigger, better BMW. I don’t have one by the
way, I’ve got a jeep. But, I, it’s really, well, you
know, i mean I’m, hopefully I’m, I’m still enthusiastic
to you guys about it. I like what I do. And I enjoy, I even enjoy this,
I hate being old enough that I’m like an institution where I’ve
really got anything to tell you. Most of the time I
still really enjoy it. There’s bad days. Bout five years ago we dumped
a bunch of mud into a lake in Missouri; had to
pay to dredge it out. I didn’t like that much. But, you know eight inches
of rain in our controls failed. That was about 10 days
that wasn’t any fun. Most of the time
it’s still enjoyable. Where you fellows from? I mean local? Or near local?>>male speaker:
Paris.>>Steve Wright:
Paris? You’re from Chicago? How about you?>>male speaker:
DuQuion.>>Steve Wright:
DuQuion?>>audience members:
[unclear dialogue] Newton.>>Steve Wright:
My right hand man’s from Newton.>>male speaker:
Palatine.>>Steve Wright:
Yeah?>>male speaker:
Close to Chicago.>>Steve Wright:
Yeah, how about you?>>audience members:
Oblong. Outside Chicago. Monticello. Washington.>>Steve Wright:
You probaby saw my Wal-Mart up there. How about you?>>male speaker:
Ottowa.>>Steve Wright:
Iowa, where?>>male speaker:
Ottowa.>>Steve Wright:
Yeah, where? Oh, Ottawa,
I thought you said Iowa. [audience laughter] I’m 63.>>male speaker:
Morton Park. Chicago. Up near Chicago, Palestine.>>Steve Wright:
Ok, so we got you know everything north
of I-80 is Chicago to us. Did I get everybody? Um, so you’re all Illinois guys. There’s tons of jobs in this. If you come from the city,
you’ll probably like the city. And the truth is, you’re
going to make more money, but as I’m sure you know,
it costs a lot more to live up there. You can buy an awful
nice home down here for 125-150,000 dollars. It doesn’t get you much
in the city, you know. But, so the wages reflect that. That lifestyle I didn’t
deal well with it. You know I grew up
in a rural setting. When I went to
Fort Lauderdale, I thought that’d be the
greatest thing on Earth. You know, I’d seen
“Where the Boys Are,” which is a movie you guys have
probably never heard of. But uh, I just loved it for
about a year and then I just couldn’t wait
to get home. What I found, and this
goes to the city alright, but you get away from
here out on the coast, people think differently
than we do. They’ll tell you anything if
it furthers their purpose. Whereas generally
here in the Midwest, we don’t do things like that. You know, if we are telling
you something, it’s because that’s what we think it is
and we intend to live with it. And I really was uncomfortable
with that whole and [unclear dialogue]
prepared to deal with it. I don’t ever hire anybody from
the coast or from the mountains. We don’t have water or
hills around here much, so I don’t think
they’d be happy.>>male speaker:
If a student has a family business, would you
advise them to work with the family business for
some time or work outside and then come back?>>Steve Wright:
I would not reccomend going right into it. I have two stepsons,
who both work for me. And they’re doing fine. They both worked two or
three years for other people before I would hire them. One of them graduated from
Southern and he came and ‘I want to come
to work now!’ You know, you go do
something else for a while and then come talk to me later. And there’s a lot
of reasons for that. First of all, their coworkers
are always going to think you got in on a pass. Whether you are the
best guy on the payroll. But if you go somewhere else,
prove you can make your way without dad, come back, you
know, somebody says anything to you like that, or talks
about it, you can say hey, you know I didn’t need this job,
I had a good job you know. Because when I did hire
these two sons of mine, by the time I hired them, I
asked them to come to work because we were in this growth. Four years ago, I was a
$15 million company, this year it’s 60. I mean that’s what
Wal-Mart’s doing. [unclear dialogue]>>Dr. Wafeek Wahby:
Any other questions or comments? Well, then let’s thank him for. [audience applause] Also let’s thank, give
a hand for Pete Grant. [audience applause]

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