Reach the Beach
Although the surf reached a maximum height of 2 feet and the hotel restaurant said the tuna steak was "not here today," attendees at the first Walls & Ceilings Business Solutions Conference couldn't care less. The nearly 300 contractors, distributors, manufacturers and other industry key members were not in Myrtle Beach, S.C., for the seafood and salt water but for a two-day conference chock full of topical industry issues and concerns. Held at the Kingston Plantation, attendees were given the chance to discuss and network with the roofing, and walls and ceilings contracting professionals.
The event officially began Monday, Nov. 8, at the Kingston Hilton, and was held in conjunction with sister magazine Roofing Contractor's Best of Success seminar.
The W&C segment began with Bill Pitt, a risk reduction advisor, with Harold W. Wells & Son Inc. During his two-hour presentation, along with assistant Holly Biasi, Pitt discussed risk management issues for construction companies. As a result of gobbling up smaller companies, larger insurance companies are allowed to be more selective as to who is insured, and many construction companies as a result are feeling this weight.
World events, such as the war on Iraq and potential terrorist attacks, have influenced rates. Another major influence comes from a litigious community that plagues everyone-no one is safe, including the walls and ceilings contractor. With the settling of the asbestos dust, lawyers and other prowlers have turned to mold as the moneymaker, and the drywall/EIFS subcontractor bear the brunt.
"Insurance companies are being forced to pay large settlements to cover damages that they didn't intend to cover at all or didn't realize how high the loss potential was for the coverage once it hit a courtroom," Pitt said. "In order to protect themselves, most companies that work with the construction industry have begun to issue exclusions that make it very clear what they do and do not cover. Most of the exclusions deal with liability issues that are found when subcontractors are used, as well as EIFS, mold, asbestos and lead paint. Many of these exclusions are new and contractors need to be aware of the steps they need to take to properly protect themselves and their company."
There are risk management techniques that can be practiced in relation to worker's comp. Programs such as Drug-Free Workplace policies, Fleet Safety programs and Substance Abuse policies can help reduce the number of claims. Companies that have vehicles should be aware and cautious of whom they have driving. In addition to this, Pitt said having an accident investigation procedure allows a timely and concise collection of witness and evidence documentation.
"It is important for today's construction company owner to be informed about the current insurance environment and to be partnered with a risk advisor that will keep them up to date on any new exclusions that are issued to their policies," said Pitt. "An advisor should also offer them risk management techniques that will help them better manage their total insurance program and ensure the success of their business."
Table talkBeyond risk management and the tips the Harold W. Wells' team provided, complementary notes were presented in a 75-minute roundtable talk in the W&C Trends Q&A session. Moderator and W&C Editor Nick Moretti introduced magazine cohorts and columnists Michael Gardner, Robert Thomas, Bill Rogers and Danny Bonnell, who all shared from their experience and expertise on trade trends and thoughts.
Asked by the moderator what the number-one industry concern was, the four speakers each responded with what they perceive highly topical today. Thomas said that the insurance crisis, as noted by Pitts's seminar, was something on everyone's radar. From the EIFS perspective, he said more information has to become available.
"I think you could take the insurance comment one step further and pull in the litigation concept," Gardner extended in his answer. "What we've seen on the industry side in the last two or three years are just crazy, crazy litigation concepts. Concepts that go beyond what a prudent person involved in the legal industry really should be attempting to accomplish. This is not specific to this industry. I think it is germane to industry in general ... I think what you're going to see in the next three to five years are movements toward protection for industry within congress and the courts to remove some of the burden that's placed on the industry, that's placed on the contractors, to pay insane claims in cases where they're really not even involved in the first place."
Although Rogers agreed that the "insurance issue" is important, he also stressed the shortage of skilled labor as a trend that needs to be addressed.
"We need to be viewed as a career opportunity for young people to come into the construction industries," he said. "If it's not viewed as a viable career to come into, we're going to lose the brightest and best."
Bonnell concurs that insurance is a constant battle but notes that it's the contractors' job to take responsibility in all situations and to think positively. He says the contractors also need to assemble a strong workforce, not just hire trunk slammers.
"As an employer, we have to be responsible to train ... people," Bonnell said. "Don't stand on the street corner expecting to pick up guys to come work on the job. Don't take a job that you don't have the abilities or the expertise to do."
Other topics discussed were EIFS-related issues, such as the quality of rolled/trowelled on weather barriers and how well they perform. Thomas said these type of systems, with the liquid-applied water barriers and some type of adhesive pattern that is vertical that creates a drainage cavity are going to become a standard way of doing drainage EIFS. A question was asked why there are two different numbers on the end tape of gypsum board. Gardner, using a flow chart, said that these two numbers are issued by ASTM specifications for the manufacturer to meet. All gypsum board products fall under the specification ASTM C1396 and each type of product also is categorized under an individual product specification, such as C36 for drywall. (But during the last C11 meeting in late November, a ballot action passed that withdrew the individual standards, placing all products under ASTM C1396.)
Rogers explained the differences between the union apprentice and a Job Corps trainee.
"Job Corp is sort of a quasi-military environment-they actually live at our facilities for seven to 12 months, in dormitories," he said. "We wake them up at 5:00 a.m. to get them used to the daily grind of the basics of holding a job. We try to simulate a job environment for them. They spend half the time finishing up their high school education, half the time learning their vocation. Job Corps has every type of vocation in it. We operate plastering and cement masonry classes, there's auto mechanics, there's carpentry, painting, computer building, dental hygienists. These young people spend their first 30 days trying to figure out what they want to do with their lives by looking at all these different offerings. They make a choice and for the next six months to a year, work at trying to learn that trade."
Bonnell, an AWCI-certified EIFS Smart contractor, was asked whether or not the cost of general liability insurance cost his company EIFS business, which he responded by saying:
"In the early stages, it certainly had an affect on how we were able to sell the product. I think overall a broadened awareness-to our trade and market-was that it was important and how to handle it. As the increases started coming ... I would take my policy when I would renew, and go to each one of my contractors and lay it down in front of them and say, ‘This is what I'm paying; this is what you get for coverage; this is the best I can get you right now; do you have any heartburn?' And some of them would say, ‘Look, next time I bid a job, there's going to be some increases and here are the reasons why. I'm trying to find the best possible solution.' In handling it that way, I think we've been able to maintain our market share.
"In the early days, I had a strong concern about losing that market. Because that's all we do: We're strictly an EIFS, plastering contractor. EIFS is roughly 95 percent of our business. And it's hard to survive on that (other) 5 percent. We don't get into the metal studs, drywall; we're not a combined-type individual firm."
Habitat's fullAfter the Q&A panel, a lunch break followed, with the keynote speaker beginning the afternoon round of seminars. Millard Fuller, founder and president of Habitat for Humanity International, told the group that he felt "very much at home" among the building trades and that this group should be especially proud, since, "Everyone needs a roof, walls and ceilings."
Habitat for Humanity builds houses for individuals who cannot obtain a mortgage. The agreement is that the person still has to pay for the house but that the organization doesn't charge interest or make a profit.
"The only thing Habitat for Humanity gives away is opportunity," Fuller said. "We work with families, not for them."
Fuller also announced that all the Habitat houses survived the recent hurricanes in Florida, 400 of which were affected by Ivan. "Not a single one had severe damage," he said, noting that the results were similar during Andrew in 1992.
Ellen Rohr, author and occasional W&C feature writer, followed with an energetic session on management strategies, "Should He Stay or Should He Go? How To Take Back Control of Your Company." She introduced the seminar with past experiences on how her contracting company was failing and the steps she and her husband/partner used to revamp the company's business philosophy to a high level of success.
"You get the employee you deserve," Rohr told the group. She emphasized the need to keep a scorecard on each person and have written policies, because according to her, "it's not real if it's not written."
Rohr's formula for a successful business plan entails some of the following points:
• Be worth following. Be trustworthy, accept your role, and intend to be successful.
• Do what leaders do. Hold yourself and your team accountable. Know your finances. Track and train your workers. Deliver fair and reasonable consequences for people unwilling to do things your way.
• Have integrity in all that you do.
Next, John Alfs, legal columnist for RC and a shareholder in the Troy, Mich., law firm of Cox, Hodgman & Giarmarco, explained to contractors how to protect themselves through intelligent contracts. He covered internal contracts (the kind one uses to set up a business and hire employees and subcontractors, as well as external contracts) that one has with clients. As he stressed to the audience, the most important thing to remember is to "do business with good people." A handshake with a reliable, trustworthy individual is better than a good contract with a person of questionable stature.
Jim Olsztynski, W&C/RC's Smart Business columnist and editor of sister publication Supply House Times, offered "101 Smart Business Tips." For each tip he presented, Olsztynski shared examples and insights on why these points were of value to the contractor. Although each tip could be considered quite obvious, the presenter stressed that many of these tips are ignored. Through regular exercise of these points, business owners could give themselves the advantage over competitive bids. A taster of these subjects include:
• Return phone calls promptly
• Under promise, over deliver
• Know your cost per billable hour
• Pay for referrals, including employees
• Get friendly with realtors and people who work at Home Depot-they are a good source of leads
• Cultivate relationships with successful people
• Solicit testimonials
• Time direct mail to arrive mid week
• Church bulletins are a great means for networking
The second day started out with RC's safety columnist and occasional W&C feature writer Chip Macdonald, of Best Safety LLC, who donned a harness and told the group how to write a health and safety plan.
"Fall injuries and fatalities in the construction trades are not going away without our own maximum efforts," he said. "Some of the best fall protection equipment on the market today was developed directly by those workers mandated to wear personal fall protection or build adequate fall prevention systems."
Such a plan has 10 components:
• Corporate management and commitment
• Assignments of responsibility
• Hazard identification and control
• Safety and health policies and procedures
• Random safety audits
• Enforcement and discipline
• Employee training
• Record keeping
• First aid and medical assistance
• Human resource issues
Former U.S. Marine and past head of Corporate Relations for Labor Frank O'Sullivan gave a reflection on his 22 years experience with Hercules Inc. He talked about the power of the union, the need to organize, and conveyed the powers of mutual gain negotiations.
John D'Annunzio, president of Paragon Roofing Technologies, Shelby Township, Mich., and RC's technical columnist spoke on building codes for the seminar's finale. Within this presentation, he discussed current codes and how they impact the contractor. In addition to this, he spoke of what the local codes require, compliance reports and special inspections.
Many sponsors contributed their time, sending out representatives, as well as tabletop displays. For the wall and ceiling contractor, sponsors Lafarge North America and the EIFS Industry Members Association faithfully attended the seminars and networked with many contractors. US Gypsum was also a conference partner.
Post conference feedback has been strong. Many of the participants remarked the information was strong with a great roster of knowledgeable speakers.
Roofing Contractor Editor Jo DeLorenzo contributed to this article.