When and why did you make the decision to get into the mechanical contracting industry? What was the deciding factor?
My introduction into the mechanical contracting industry started when I accepted an invitation in 1969 to serve a pipefitters apprenticeship in Cleveland, Ohio. Upon completion of the five year apprenticeship and working two more years as a journeyman pipefitter I realized there was not a lot of upward mobility for me as a pipefitter and decided to start my own mechanical contracting business. The founding of the business was accomplished in 1976.
What is the most difficult aspect of running Coleman Spohn?
The most difficult aspect of running Coleman Spohn Corporation is probably the same as running any other small business; that is, the management of its people and resources. Today our challenge is further compounded by the fact that we have a large number of baby boomers set to retire from our company’s workforce. For our company to remain competitive with the retirement of this generation it is going to be important to find ways to replace the knowledge and competence of our present workforce, built over years.
What are the advantages and disadvantages of working out of Cleveland? How do you overcome the dependence of Northeast Ohio on the auto industry?
I’ve never considered working in Cleveland a disadvantage nor can I recall being disadvantaged by being located here. In fact, I’ve always considered our location as one of the positives that helped Coleman Spohn become a successful company. We have a number of major colleges and universities located within the city, a world-renowned health care system led by The Cleveland Clinic and University Hospitals, and a growing biosciences sector creating stability and growth for our city. These facilities are a significant source of business for the city’s mechanical contracting industry.
Once considered a dead or dying city because of the loss of its steel and auto industry, Cleveland has found a way to re-invent itself through its health care delivery systems and biotechnology sectors. Today these industries have replaced the auto and steel industries as Cleveland’s largest employers.
In general, is it more difficult to run a contracting firm now than when you got into the business? If so, why? What can MCAA do to help?
I think it is more complicated to run a business today than when I started, which I attribute to the new technologies that have been introduced into the mechanical contracting industry. When I started thirty years ago we did not have cell phones, computers, fax machines, or the virtual office. In the past a company could survive without some of this technology. Today a business that does not embrace new technologies will be hard pressed to keep up in this industry.
That is why what is taking place at MCAA is so important. Long known as the “education association,” MCAA is serving its membership well by staying abreast of new technologies being introduced into our industry and making sure our membership has the training and expertise to integrate these technologies into their companies.
What do you love about your job?
I love the fact my job has put me in position to help make a difference in our industry. It has also allowed me the ability to create opportunities for others.
What do you hate — the one task you wish you never had to do again?
Chasing overdue receivables… I do it…but I hate it.
What is the most important thing that you’ve learned in your years in the business?
Integrity means everything…to be honest, open and up front with those you interact with.
What is the mechanical contracting industry’s biggest challenge?
As I see it we have two big challenges… finding the manpower necessary to replace the skills leaving the industry with the retirement of the “baby boomer generation” and making sure there is always room to embrace the new technologies entering our industry.
What has been the impact of different methods of project delivery? Is project management turning into process management? What’s been the impact of BIM?
The construction industry continues to evolve. An aspect of this evolution that has shown a positive impact on our industry is “fast tracking.” Fast tracking has resulted in increased opportunities for leadership and expansion by MCAA’s membership into the design build/design assist arena. Our challenge, if we are to stay ahead of the curve, is to be prepared.
The latest challenge is the implementation of BIM. Steve Jones of McGraw Hill states that “BIM is quickly becoming the gold standard by which firms do work.” There is great power in BIM, especially for mechanical and plumbing contractors. To stay abreast of this technology, MCAA has created a BIM Committee that is carefully examining the opportunities and the challenges so our members can continue to play a leadership role in its implementation.
How long do you think the troubles in the construction market will last? What should mechanical contractors do to outlast the tough times?
It is my feeling the Stimulus Plan being promoted to jumpstart the economy by the new Administration will create an improvement in the construction market within the next two years. From a mechanical contracting standpoint we know a large amount of the work under the plan has to do with green and sustainable construction initiatives as well as energy savings in mechanical systems. I would use these tough times to re-invent our company and take on green and the sustainable construction marketplace. Van Jones in his book, The Green Collar Economy, states that in 2006, renewable energy and energy-efficiency technologies generated 8.5 million new jobs, nearly $970 billion in revenue and more than $100 billion in industry profits. This will continue in a big, big way.
Past MCAA President Dave Kruse has been an outspoken advocate of green and sustainable construction. Will you continue that? What do you think the opportunities will be in 2009 for contractors in the green marketplace?
Yes, I will. Dave was “right on” in his assessment of green and sustainable construction and I will continue to promote it as did President Jack Wilhelmi before me. I also think 2009 will provide a host of opportunities for those companies embracing green technologies and sustainable construction. President Obama has made energy efficiency a focal point of his campaign and at one of his campaign stops visited MCAA’s McKinstry Company in Seattle. While there he spoke favorably of green and sustainable building initiatives and the need for domestic energy production to reduce our reliance on foreign oil.
Also, if we take a look at President Obama’s Stimulus Plan we find a large portion of what is being proposed under the infrastructure package involves improving the efficiencies of HVAC and plumbing systems in buildings as a means of energy savings. The movement to green and sustainable building initiatives in the mechanical contracting industry will, as Dave Kruse emphasized, add a third dimension to MCAA member companies, creating the triple bottom line of “people, profits…and the planet.”
Is the UA experiencing pension fund problems that will have an impact on contractors?
I believe that pension plans all over the country are faced with the same issue: loss of assets because of the economic downturn in the country. This is not unique to the UA and MCAA contractors. Everyone is being affected by it. Late last year our lobbying efforts, in concert with a broad coalition, resulted in a one-year fix in the pension reform law giving plans more time to recover after this year’s market losses. In 2009 plans will be given the same funding status classification they had in 2008, so if the fund was green last year it is green this year. However, that protection expires after 2009, so the business community will likely have to press for more action again this year.As the economy improves I am hopeful that pension plans throughout the country, given time, will also improve.
As an association, what is MCAA’s biggest challenge? I know it’s funded on a formula based on dollar volume, so is the association’s income going down? What’s going on with MCERF’s endowment? (Hope they didn’t invest with Bernie Madoff.)
MCAA’s biggest challenge will be staying abreast of the technology entering our industry and making sure our membership stays on the cutting edge of that technology. MCAA has a great opportunity to take a leadership role when it comes to the implementation of these technologies and can ultimately place its membership in position to become the “go to person” for owners and public agencies, because of their acquired knowledge and expertise.
MCAA’s funding remains solid as it continues to find new ways to benefit its membership. MCERF, like many foundations, is feeling the effects of the downturn in the economy. We are hopeful that time will improve the economy, markets will improve and we will see improvement in our MCERF portfolio.
If you could do only one thing for your members this year, what would it be?
I would increase market share for everyone…profitable market share that is.
At what point in your career did you decide to become an officer of MCAA and why?
I had served as an officer and member of the board of our local MCAA affiliate in Cleveland during the 90s and was nominated to the national board in 2002 and became an officer in 2006. Having gained so much by being supported by MCAA I felt that by becoming an officer I would have the opportunity to repay that support by assisting with the growth and long term viability of the Association.
Do you have a list of goals for your presidency and, if so, what are they?
We must continue the work of Dave Kruse in green technologies and sustainable construction. We must also make sure our membership remains on the cutting edge of new technologies entering our industry, as Jack Wilhelmi has advocated, through continued education of MCAA’s membership.
My goals are to continue the effort to improve market share for our membership, continue expansion of our highly successful student chapter program, work with the UA on legislative and market issues that affect us jointly, and to keep MCAA at the forefront in the education of its membership.
Will the Cavs win the NBA championship this year?
We are hopeful the Cavaliers can come through for the city and win it all. Having said that we understand the team must stay healthy, peak at the right time and have a little luck on their side. Winning a professional championship is not an easy thing to do. We are also mindful of the fact that our sports teams seem to have a problem closing the deal. So we try not to get our hopes up too much. Maybe this is Cleveland’s year…Go Cavs!
Contractors face a complex market in 2009
Lonnie Coleman, who takes over as president of MCAA during the association’s Scottsdale, Ariz., convention in early March talks about the market challenges contractors will be facing in 2009