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


Uploaded by WafeekWahby on 09.04.2012

Transcript:
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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]