As published in the July 1, 2014 Toledo Business Journal
Kevin X. Smith
Associated General Contractors
of Northwest Ohio (AGC)
The importance of working with area firms
Toledo Business Journal recently interviewed Kevin X. Smith, CEO and general counsel for the Associated General Contractors of Northwest Ohio (AGC). He shared the following thoughts:
Toledo Business Journal: Can you provide an overview of the Associated General Contractors of Northwest Ohio including its members and geographical coverage?
Kevin X. Smith: The AGC represents about 400 union contractors in northwest Ohio and southeastern Michigan, and there are about 15 labor contracts that we deal with. We are categorized as a (c)6 non-profit, but I would say that the best way to describe us is that we act as the HR department of those 400 contractors. We negotiate the labor contracts with the unions on behalf of management, and we’re also involved in safety and training, and health and welfare, and pension administration.
TBJ: What impact do the members of your organization have on the economy in our area?
Smith: It’s huge. We have about 15,000 building tradesmen, and large general contractors and small trade contractors who are doing about $500,000,000 in gross revenue. Most of them are very well-known in the community, and most of these companies have been around 40, 50, 60 years. They’ve been staples of the industry for a very long time, and, frankly, they helped build Toledo.
TBJ: Why is your organization working to raise the awareness of the importance of using local companies for construction and other projects?
Smith: If you don’t have professional jobs in your local area, you’re not going to keep people in the area. I have two kids that live in Chicago. I don’t know if they’re coming back to Toledo, because there aren’t any jobs. Any time you hire someone from Chicago or New York, you’re creating a job for someone else and causing your kids to leave and not come back.
Then there’s the retail side. When general contractors come in from out of town, they’re not going to the hospitals, or banks, or retail shops. In other words, they’re not putting money into the local economy. The people that hire these contractors from out of town ask the local people to shop locally and support local businesses, but they hire people from out of town? It’s confusing.
It’s not a competitive thing, from my perspective. Our members are fiercely capitalistic. If we’re not competitive, we don’t deserve it. But it should be an issue in your decision, within reason of competitiveness and cost, that you say, “We’re going to support our local economy.” It not only helps that local business, and other businesses in the area.
If you have a headquarters here and you have 500 people in an office, they live, shop, work, and invest in northwest Ohio. You need a vibrant community, to not only attract potential workers, but to have the people who are already here feel comfortable in a quality of life that they like. And that’s not going to happen when you hire workers from some other community.
You also need to add value to the equation. And part of the value should be, “What does it do for the community?” If it’s within reason, then it should be a serious part of your decision-making process.
TBJ: Is there an effort being organized to raise the awareness in the business community of the impact to the regional economy from using local companies and their professionals?
Smith: There’s no official project right now, but we’re working with Toledo Region branding. The message is going to be subtle: “What’s in your best interest?” If we can’t convince you that what we do is in your best interest, then we didn’t do our job.
We’ll have to figure out the best way to go about promoting the idea. Will it be a DVD that we can deliver to companies that explains what we’re doing, or a website promotion, going directly to CEOs? We’re not sure yet. It’s not going to be a huge initiative, but we do have enough support from the business community. They agree with us that the utilization of local talent deserves to be an issue within people’s consideration on who they hire for certain projects in the community. It’s that simple.
TBJ: Can you provide some examples of large projects where contractors from outside the region were used?
Smith: I don’t want to call out companies by name. What’s already out of the gate is out of the gate, and there’s nothing you can do about it. But I will say that there are four major projects in our region that are going to companies outside of northwest Ohio.
I want to add, however, that it doesn’t mean that local trade contractors haven’t been hired to do work on these four projects. They have, and we’re appreciative of it. But it’s just another reason why we want to promote all of the local talent. They might be using our local tradesmen, carpenters, and cement masons, and others, but not the project managers, or estimators, or other workers who could contribute to the overall project.
TBJ: Were there capabilities that these project owners were able to obtain by using a contractor from outside the area, or important advantages involving cost that they were able to realize?
Smith: No. We have great people, and great resources. It’s not a matter that we don’t have the talent or the technology, because we have both.
TBJ: There have been significant advancements in technology and management that continue to take place in the construction industry. Can you describe some of the advanced construction capabilities of area firms and how these capabilities compare to companies outside the region?
Smith: One of the big things in the industry now is Building Information Modeling (BIM). With this capability, you construct the job before you even hit the ground. Part of the problem with the different facets of construction is that you have architects focusing on architecture, mechanical engineers focusing on mechanical, electricians focusing on electrical, and so forth. Unless they coordinate closely on all levels, you could end up with an I-beam where an HVAC vent is supposed to go. With BIM they can all get together and coordinate their disciplines so that all those issues that affect jobs, cost, and quality are taken care of beforehand.
Modularization is another big thing, especially in dormitory buildings on college campuses. The dorms come on a truck and they just plug them into where they need to be. They’re pre-manufactured under conditions that are ideal, because they’re inside. Cold, rain, sweltering weather aren’t concerns.
TBJ: Are there opportunities for local construction industry firms to perform projects for area corporations in their facilities in other parts of the country and what impact would this have for our area economy?
Smith: This gets back to the idea of utilizing local talent. I’m not against people coming in and doing work. The trouble is, as far as the market goes, Toledo is one-fifth the size of the three C’s: Cleveland, Columbus, and Cincinnati. When contractors from these areas come into Toledo, our guys get hurt more then if our guys went into their markets. But we’re not completely territorial. Lathrop, for example, works in Mexico and Colorado. Rudolph/Libbe is working in North Carolina.
Again, it’s all about utilizing local talent. I don’t want to put barriers up, but it is about understanding local value.
TBJ: Are there any other issues that you would like to address?
Smith: Workforce development is one thing. We’re working with the Toledo Public Schools and the vocational schools to find people who want to get into construction. Admittedly it’s going to be a little bit of a struggle. The thing is, you don’t have to sell it to the kids, you have to sell it to the parents. If the kid is good at working with his hands, then he or she is sold. Many parents, however, think you have to go to college, and they don’t look at construction as a career. They’re totally wrong. So, we’re trying to put together a plan to get young people interested, and to show them that the building trades is a great career. Not everybody’s interest leans toward sitting at desk all day. I do enough of that myself.