Subcontracting Made Easy
If my friends at Local 361 had done the job, I never would have met this unusual crew of ironworkers.
Published February 2005
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COMMENT ON THIS ARTICLEIf you happened to be in the New York metropolitan area last October, you may have seen a display truck driving around emblazoned with an American flag and the words "Norman A. Brodsky" in large letters. A lot of my friends saw it. Several of them called to ask whether I was running for office. Those who looked at the truck more closely realized that the sign was actually a huge poster from Ironworkers Local 361, which wanted the citizens of Brooklyn to know I was using a nonunion, out-of-state subcontractor to do some of the work on a new warehouse I was building.
The local was no doubt trying to annoy me, but I actually think it had a point. My neighbors should know what I'm doing -- and why. You might be interested as well. There are some good lessons here about loyalty, keeping your word, and not giving in to intimidation.
The story begins in 1996, when I realized I had to build a warehouse for my records-storage business. I hired a general contractor, and we agreed that we would put up what's known as a preengineered building -- essentially a giant erector set that can be adapted to fit a customer's specific needs. Among other things, it would allow us to finish building the warehouse in four months -- fast enough to avoid the potential calamity of having thousands of boxes show up with no place to put them.
Our first task was to hire subcontractors. Since I'd never built a warehouse before, I let the GC handle the process, although I watched closely. I also made it clear that I didn't believe in always going with the lowest bidder. Of course, I didn't want to spend more than I had to, but you often can pay less in the long run by choosing somebody who charges more. A smart subcontractor can save you money by being more efficient, by avoiding mistakes, by figuring out how to cut back on expensive materials you don't really need.
As the project progressed, the union workers fell further and further behind.
Overall we did pretty well. I've built five more warehouses since then, and I still use many of the subs I had on the first job. But one turned out to be a disaster -- the company in charge of erecting the steel framework and putting up the roof and the siding. Like most of the other subs, it was a union shop. In fact, the guys on the job were members of Local 361. I don't know whether they or their bosses were to blame, but as the weeks went by, they got further and further behind. When I'd confront the company's owner, he'd say, "Okay, okay, I'll have more people on tomorrow." They'd show up, work half a day, and we'd fall further behind. (Officials at Local 361 declined to talk to Inc. for this story.)
It was frustrating, in part because I had so little leverage. I was paying a fixed price, and there were no penalties for being late, a lesson in itself. Meanwhile, the boxes kept coming. As it became clear that the builders would miss the deadline by several months, I bowed to the inevitable and began looking for leased space where we could store boxes after we ran out of room. Unfortunately, this was not a short-term proposition. We'd have to spend about $500,000 to put up racking. With that large an investment, we couldn't walk away after a year or two. I wound up signing a 10-year lease on a warehouse about a mile away that cost me $120,000 a year, or $1.2 million altogether -- money I wouldn't have had to spend if the subcontractor had finished on time.
So you can imagine my state of mind two years later as I started planning for the second new warehouse. This time I decided to hire the subs myself. When I looked at the companies bidding on the steel work, I wasn't thrilled. "Isn't there anyone else?" I asked the GC's representative, Carmine.
He thought for a moment. "Well," he said, "I do know some other people who can do this work, but there's a problem."
"What's the problem?" I asked.
"Well," he said, "they work from sunrise to sunset."
"Why's that a problem?"
"Well," he said, "they sometimes work seven days a week."
"That's not a problem, either."
"Well," he said, "they sleep in trailers on your property."
"Really?" I said, smiling. "We've got plenty of space around here. Bring the guy in. I want to meet him."
A few days later, Carmine showed up with Walt Conklin, who looked like a member of ZZ Top. He had hair down to his shoulders and a full beard. If you saw him on the street, you might think he was a mountain man from West Virginia -- and you wouldn't be far off. He's from Virginia.
After talking to Walt for 20 minutes, I knew he was the guy I wanted. He was very bright and direct, and he knew his business. He said he and his men had put up a number of preengineered buildings and explained how they did it. Later, I followed up on his references and looked at a couple of jobs he'd done. Everything checked out.
