Contractor Reaps Benefits From Utility Ownership

By John R. Hall

HARRISBURG, PA — When the owners of McClure Co. watched as Pennsylvania became the second state in the U.S. to deregulate the electric utility business, they sensed it was time to weigh their future options. The local electric utility, Pennsylvania Power & Light (PPL), was looking to partner with a local mechanical contractor to service its large commercial and industrial customers.

“We asked ourselves if we would be better off partnering with them or not partnering,” said Chip Brown, vice president of Preconstruction Services. “PPL was looking to build on its existing relationships.

“Our market position would be enhanced by being affiliated with a large local utility.”

This relationship began with PPL’s acquisition of McClure two years ago. The mechanical contractor has flourished ever since.

“The dynamics of the energy business are so different from what we are used to,” Brown said. “There is an increase in the demand for electricity. In fact, there is probably going to be a greater demand than there is a supply.”

The present makeup of the company is a far cry from what it looked like when H.B. McClure founded it in 1933. When Bill McClure Jr. took over the then McClure-Union Co. in 1969, revenues were $1 million. In 1999, the company reached $70 million in sales.

“We are a full-service union mechanical contractor,” said Brown. “We are committed to taking a strong engineering approach to our business, and we are heavily into design-build.”

According to Brown, there are a lot of opportunities to grow in the Harrisburg business community. He has first-hand knowledge of that. When he joined the company in 1984, the sales volume was $15 million. He attributes some of the company’s success to the clients it serves.

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“There are a lot of industries in Harrisburg,” he said. “Our local base is changing with more of an emphasis on high-tech business. We have focused our business on the pharmaceutical and medical markets, too.”

The biggest employer in Harrisburg is the state government, since the city is home to the state capitol. One of the first projects Brown was involved with at McClure was at the state capitol. “I was a project engineer on the Capitol Building renovation project, a $4 million job,” Brown said. “We’ve been back there a few times since then. We don’t mind working for the state government. We’ve done some bid work on prisons, etc.”

Being a union contractor has benefited McClure during the industry-wide shortage of field installers and service technicians. At any given time, the company may have up to 500 people working in the field. Still, the principals are concerned that a worker shortage may have an effect on the business.

“The availability of craftspeople may determine how much work we do,” Brown said. “We still feel the pressure of trying to keep people here, just like other parts of the country. We hope we won’t lose many of our core field group because many of them have been with us for years and we’ve stuck with them in good times and bad times.”

Links to Success

Besides its affiliation with PPL, Brown said there are several reasons why the company continues to grow. “Harrisburg has been fairly dynamic,” he said. “We enjoy a good reputation that we have to protect each day.

“We really try to do what we say we’ll do. This is an environment that started with Bill McClure Jr..”

Brown keeps abreast of the local hvacr market. He knows that independent contractors will continue to strengthen their market position. He noted that although “none of our local competitors have been consolidated,” it may only be a matter of time before that changes, too.

“We don’t have our head in the sand. We expect to compete with everyone.”

Publication date: 09/18/2000