Don’t expect the future to be like the past
An interview with Robert T. Armistead, PE, president of Armistead Mechanical Inc., Waldwick, N.J., and 2010 president of the Mechanical Contractors Association of America.
When and why did you make the decision to join the family firm? What was the deciding factor? Is there a fifth generation coming up through the ranks?
The Armistead family has been in the mechanical construction and engineering business for four generations. I was raised in the family-run business started by my grandfather. At a young age I worked summers and school breaks in the business, learned the trade in the field and later worked with the estimators and project managers in the office. I received my Bachelor of Mechanical Engineering from Villanova University. After college, I served as a Naval Engineering Officer aboard the guided missile destroyer USS Richard E. Byrd, stationed with the 6th Fleet. Upon completion of my tour in the Navy, I returned to New Jersey and went back to work in the family business. I am very proud that my sons are now in the business and I’m hoping that down the road at least one of my grandkids will see fit to join the company, which would be our fifth generation of Armisteads in the business!
What is the most difficult aspect of running Armistead Mechanical?
Probably one of the biggest challenges is keeping our people energized and motivated in this very difficult and slow market. It is very disheartening to our staff at times trying to acquire work when the competition has been so keen of late. We have to trust that if we keep doing the right thing and adapt to the changes we see coming that we’ll be OK in the long run. I see that as one of my most important jobs — making sure that the people that are working so hard know how much they are appreciated. Communication and letting them know how much their efforts are appreciated is key.
What are the advantages and disadvantages of working out of the Northeast? What are the strongest markets (for example, hospitals, educational, data centers) in your area?
The disadvantage of the Northeast is that it is a built-out market with a lot of capacity. In our area, the cutbacks in the financial sector certainly had an impact on our vacancy rates. However, the advantage is that it wasn’t as overbuilt as some of the Sunbelt markets, for example. Looking ahead, I see a huge market in energy efficiency retrofits, especially if Congress would pass the Rebuilding America Coalition’s Building STAR package of short-term incentives and rebates for retrofits of commercial, institutional and multi-family residential buildings. As for market strengths, hospital construction continues to be steady because of the ongoing healthcare needs and data center construction appears to be robust in the Northeast due to the advances in technology. Our pharmaceutical market continues to be off with fewer and smaller projects.
In general, is it more difficult to run a contracting firm now then when you got into the business? If so, why? What can MCAA do to help?
At Armistead Mechanical, as at so many other contracting companies, we’re facing the fact that our business has changed dramatically. We need to develop new skills in order to make the most of the opportunities ahead.
First of all, we are thinking outside the box to search out new market opportunities and reach out to owners and clients. MCAA and its service contractors group, MSCA, and its plumbing contractors at PCA are helping members think about how to rebrand our companies and develop new business lines.
We are also developing our skills in new technologies like Building Information Modeling. Keeping up with technological change and making the necessary investment is a challenge, particularly in a down market. MCAA is helping by providing workshops and learning opportunities on BIM, as well as advice for contractors from our Information Technology Committee.
What do you love about your job?
I love that every day is different and this industry is made up of really great people.
What do you hate — the one task you wish you never had to do again?
Having to lay good people off, which we do as a last resort because the economy and our industry are in a downturn. It’s never “easy,” no matter how necessary or justified it is.
What is the most important thing that you’ve learned in your years in the business?
The future never turns out to be like the past. That’s especially true right now. Anyone sitting on the sidelines waiting for the economy to “come back” is going to have difficulties. This is the time to invest in yourself and your people, pursue educational opportunities, develop new strategies and ramp up your skill set for the challenges ahead, many of which will be different than the ones we faced in the past.
What is the mechanical contracting industry’s biggest challenge?
Educating policymakers and the public on the contribution this industry can make to solving our environmental problems and ending this nation’s dependence on foreign oil. It’s interesting to me that when you talk to our students, they get it instantly. But convincing our policymakers in Washington that investing in energy efficiency is the right policy solution is much more of a challenge. We have to continually educate the public, and their elected officials, on the value this industry contributes to our economy and our country’s security.
What has been the impact of different methods of project delivery? Is project management turning into process management? Are owners trying to buy out equipment? What’s been the impact of BIM?
In the future integrated project delivery will be the norm. This will put a premium on keeping up with the latest management developments and skills like BIM. The contractors who keep advancing and learning new skills and technologies will be best able to compete.
How long do you think the troubles in the construction market will last? What should mechanical contractors do to outlast the tough times?
The turnaround has technically begun, but for the construction industry the recovery will be long and slow. And when markets do “come back” they will be different. We believe sustainability will have taken hold, owners will be looking for a range of services over a building’s life cycle, and technologies and ways of working like BIM will become more commonplace. The contractors who last will be those who understand and adapt to changing times.
Past MCAA President Dave Kruse has been an outspoken advocate of sustainable construction. Will you continue that? What do you think the opportunities will be in 2010 for contractors in the green marketplace?
One of the markets that should be on every contractor’s radar is the “green” construction market. While we often think about the construction of new LEED-certified buildings, opportunities worth considering include remodeling and retrofitting existing facilities to reduce energy and water use.
Many manufacturers, companies and building owners are looking to differentiate themselves to their customers by upgrading and greening their operations. These opportunities cut across all market segments, and we think they are worth the extra effort it may take to pursue and develop them.
We will definitely be continuing the work begun by MCAA Past President Dave Kruse in this area. In fact, we’re just about to launch a new product unique in the construction industry to help individuals prepare for the LEED Green Associate exam. This DVD-training manual-Webinar package will ensure that industry professionals can obtain this important credential quickly and conveniently.
As an association, what is MCAA’s biggest challenge? Has the association’s income gone down? What’s going on with MCERF’s endowment?
MCAA’s biggest challenge is to continue to develop the educational programs that keep our contractors ahead of the change curve. We have been very successful in this respect despite the economy. Our revenues, which are based on hours worked, are of course down and we have significantly trimmed expenses, but have done so in a way that is transparent to our members. Our Mechanical Contracting Education and Research Foundation (MCERF) endowment remains strong and continues to fund great programs — educational and career development initiatives as well as industry improvement research to develop better ways of doing business.
If you could do only one thing for your members this year, what would it be?
Get the Rebuilding America Coalition’s Building STAR proposal enacted into law by the Congress. If the federal government could put just a little seed money toward financing energy efficiency retrofits of commercial and nonresidential buildings, this nation could make huge strides both environmentally and toward energy independence. Our industry can help solve some of this nation’s most pressing problems, with just a few incentives to owners.
At what point in your career did you decide to become an officer of MCAA and why?
When I became a member of the MCAA Board of Directors several years ago my hope was that if I was ever called upon to step into the chairs at some point that I would do my utmost to serve our association and industry to the best of my ability. I wanted to give back to an industry that has been so good to me and help this great association continue to do great things for its members. Being chosen to lead MCAA is a tremendous honor and a highlight of my career. Having served on MCAA’s Executive Committee now for three years I’ve seen how hard my predecessors have worked and what a great job they have done.
Do you have a list of goals for your presidency and, if so, what are they?
I am fortunate to inherit an association in great shape and with many fine initiatives under way thanks to Lonnie Coleman and his predecessors as president. I will try to measure up as I take over and continue that fine work.
During the next year, we will continue to develop and refine the world-class educational opportunities that we provide to our members. The educational opportunities available through MCAA help our contractors stay ahead of the curve as our industry changes.
It is not surprising to me that every one of MCAA’s programs has continued to sell out even in this business climate. Education is the way to help our members get through these difficult economic times and our programs also prepare them for the uptick that will eventually come.
Throughout my MCAA career I have been active in helping shape our career development program. Our industry needs to continue educating young people about the opportunities in this industry to attract the best talent to our firms. I will continue to support the growth of our highly successful student chapter program, and through my position on the national board of the ACE Mentoring program, continue extending that reach into the high schools.
And we will of course continue to work with our labor partners at the United Association to grow our markets. We will also continue our joint legislative initiatives to ensure a fair and level playing field versus the open shop.