Boston contractors focus on the future
But amongst the bookstores and fast food restaurants along a busy campus street, Warren Hudson is feeling quite comfortable rubbing elbows with academia.
L.C. Anderson, Inc.The president of L.C. Anderson, Inc., views the sea of humanity from his century-old building, owned by the university.
“The building used to house different car dealerships,” Hudson said. “We’ve been in this location for 50 years, but the university may want to turn it into a library someday.
“It’s centrally located and our men can get their trucks in and out easily,” he added. “We still do a fair amount of walk-in trade with our room air conditioner business.”
The company has four major components: construction, service, room air conditioners, and McQuay parts. Having doubled in size over the last four years, combined annual revenues are $4 million.
L.C. Anderson is primarily a commercial-industrial contractor with a small amount of residential business (primarily in the room a/c area). Major customers include retail chains, banks, and office buildings. Projects involve renovations, retrofits, and cleanrooms.
Hudson said his company works on a lot of design-build projects because it plays right into the company philosophy. “We don’t take a cookie-cutter approach to projects — and we don’t really go out looking for plan-spec work.”
The bastions of beantownWith all of the older buildings around downtown Boston, Anderson counts on a lot of renovation work.
The fact that his company has been working with some of the major hotels and office buildings over the past few decades is a definite advantage.
“It is hard to break into this market,” he said. “There are a lot of older, established relationships here.”
Those relationships could also prove advantageous to Anderson as utilities enter the market and attempt to offer service and installation contracts. Hudson isn’t flinching.
“Utilities don’t want to get into the design-build business,” he said. “They’d rather get into smaller jobs of $50,000 or less, or get into the $5 to $10 home warranty business.”
Despite its unique setting along Commonwealth Ave., Anderson is not unique when it comes to the challenges that face contractors today, namely labor shortages.
Two ways to solve labor shortage“We’ve decided to bring young apprentices on and train them ourselves,” Hudson said. “Sometimes we get old-timers who just want a change.
“We don’t have a real problem with manpower,” he continued. “Our company is into controlled growth. For example, we don’t do any sheet metal work here. We sub out a lot.”
Part of Hudson’s workforce includes his wife, Barbara, and two sons, Karl and Kurt. He likes having the family involved and presently does not see any need to consider consolidation.
“I’m still not convinced that consolidation is all it’s cracked up to be,” he said. “You lose the personal touch when an owner goes. You don’t know who is going to step into his place. This is a hands-on business and shouldn’t be run remotely.”
Hudson would like his sons and employees to carry on the business, and he has certain goals in mind. “We want to grow our service department, which has been the mainstay of our company. It gives us stability.
“We don’t necessarily want to become big, but we are on that growth path.”
Hudson also holds other traditional beliefs about the hvac business that he thinks have been swept under the carpet.
“We [hvac contractors] don’t get enough credit for what we do,” he said. “The [hvac system] is the heart of the building and we provide building users with good comfort and good control systems.
“We need to educate owners, general contractors, and the public in general in the value of a good hvac system.”
BCM Controls/Comfort Systems USAOne might assume that BCM stands for Boston Controls Managers or Building Controls Management. In fact, it blends the initials of the company’s cofounders, Scott Bowman, Bob Clarke, and Jim McKinnon.
“The company focused on the idea of taking hvac and security automation products and customizing them for individual customer needs,” said Fred Doherty, engineering manager. “We have a strong reputation in the Boston area. We are actually doing ongoing work in buildings we worked on 14 years ago.”
Its three target markets include medical facilities, communication properties, and commercial businesses. BCM is also involved in the education and manufacturing markets. Its client list includes Massachusetts General Hospital, the Prudential Center, Holy Cross College, and Northeast Optic Networks.
The Boston area is home to a lot of potential customers, including many new Internet businesses.
“The trend here is the ‘.com’ companies,” Doherty said. “There are a lot of little companies that may lease a site for two years and get so big [because of e-commerce], they have to move. Or, they go out of business.”
Dealing with property managersBCM works with property management firms to coordinate occupancy functions with these tenants as well as after-hours billing. And they want to add more than sales and installation by becoming a systems integration company.
“We look at the building size, high-rises or large campus buildings, anything that requires design-build where we can interface with the customers,” said BCM president Scott Bowman. “We want to provide solutions rather than just installing basic systems.
“We’re not going to be successful in this trade if we just do plan-spec, where we have no contact with engineers or facility owners.”
Bowman sees his company developing a niche market that competitors such as Johnson Controls and Siebe don’t offer — a type of “one-stop shopping” source.
“You need to be able to provide solutions to customers, and you need to able to provide them with a different level of customer service,” he said.
No one is going to be successful in the trade if they aren’t staffed with experienced workers and BCM is no exception. However, the company seems to have been able to avoid some of the labor shortages faced by other contractors because of the nature of its work.
High-tech appeal for newcomersThe company depends a lot on its engineering staff and their backgrounds in system design and software. Service engineers are trained in both hardware and software troubleshooting, skills not always found with field technicians.
“We get a lot of our engineers from refrigeration companies,” said Bowman. “These are people who want to move up in their careers. The labor pool today is much more significant for mechanical contractors seeking tradesmen than contractors seeking technical people.”
The current labor setting in Boston is directly affected by the downtown construction boom, according to BCM’s Ted Zuendt, vice president of sales and marketing.
“We have the ‘big dig’ going on in the city, which is mainly a union contractor project,” he said. “They seem to have a difficult time getting people. The project affects all contractors.”
Another reason BCM is able to attract top-flight workers is due to its affiliation with Comfort Systems USA. The acquisition of BCM two years ago puts the national consolidator in a market where margins are slim and competition is high, but that’s OK with Bowman.
“Our projects are getting more substantial with the backing of a larger corporation,” he said. “The acquisition has created more opportunities for us to grow. We have already purchased a smaller security company, which we may not have done if we stayed private.”
Utility partneringBCM is also getting some good leads by partnering with energy-related companies, including utilities. Bowman thinks his company is ideal for a utility to partner with because of the types of projects it is involved in.
“Utilities don’t have clear-cut package to sell to customers,” he said. “We partner to provide an added value for the utilities’ customers because we mate our products to the utilities which, in turn, provides added value for their customers through energy cost savings.”
BCM managers know there is no such thing as a “locked in” customer. That’s why they take the problem-solver approach to their jobs.
“It costs about 10 times more to get a new customer than to keep the one you have,” said Doherty. “We work real hard on making sure our customers are satisfied.”
Bowman sees a good future for BCM. He would like to double in size, but he knows he can’t do it by standing still. He doesn’t plan on being on the sidelines as progress marches by.
“The biggest thing we have to worry about in the next five years is that we don’t become stagnant,” he said. “People like using the old tools. We can’t say, ‘well that’s what we did five years ago and those are the tools we used.’ It becomes more difficult to change the tools as the company gets bigger.”
Sidebar: How they got startedL.C. Anderson Inc., started by L.C. Anderson in 1943, has morphed into a number of different businesses, including a Westinghouse/McQuay parts distributor. When Anderson passed away in the late 1970s, the business was purchased by two employees, Ed Johnson and Paul Baker.
Hudson, with a background as a sales manager for a Carrier distributor, bought the business in1995. As a professional engineer, he began to steer the business to more design-build and customer service work.
BCM was founded in 1984 by Scott Bowman, Bob Clarke, and Jim McKinnon, breaking away from Andover Controls while retaining distribution rights for its controls. In 1995, BCM added a line of security and closed-circuit TV (CCTV) products to the business mix.
It must be doing something right — 1998 sales topped the $6.5 million mark. The company employs 55 people and has a separate service department.