AWCI's New President Has Issues

Jerry Smith Knows What's Bothering You, and He's Prepared to Do Something About It

Don Procter / July 2018

After 40 years in the wall and ceiling industry, Jerry Smith might attest to having seen it all. But he won’t. He is not a “been there, done that” kind of guy.
    
If anything, he is excited (and honored) to be the incoming president of the Association of the Wall and Ceiling Industry—a post from which he expects to learn much from his colleagues across the country over the next year.
    
“It is something I always wanted to do, but 20 years ago I never thought I would reach this point,” he says. “It’s a privilege and honor to be a part of this organization in this capacity.”
    
Smith, president of BakerTriangle’s Austin branch, will bend an ear over a plateful of issues in the next 12 months. Near the top of his topic list is a recent and potentially growing threat to the wall and ceiling sector: self-performing general contractors. “Even though there are only three or four in our market,” he says, “an issue we have had is the loss of market share and loss of potential revenue due to self- performing the drywall scope.”
    
He hopes to sit down with GCs and discuss how they can work with, not against, each other. “If we are bidding a job that they want to do, I want assurances that if they ask me to bid the work they are not going to be working on a self-performing basis on that job,” he says.
    
He also wants to talk to AWCI members and chapter executives about the Occupational Safety and Health Administration’s new framework of fines—potentially more than $100,000—for contractors not meeting containment procedures for respirable crystalline silica dust in the workplace. “I am not sure OSHA is sure what they are going to pursue and what they are not going to pursue,” he says. “It’s a big gray area, and I am glad that the AWCI is looking into it.”

The Labor Issue
The labor crisis is bound to be at the table in his year in office. Everyone knows the reasons for it, few have figured out solutions to it. It has stunted growth for many businesses. Smith says, “You don’t oversell and underperform if you want to stay in business for a long time.”
    
He doesn’t see labor scarcities easing before they get worse. At BakerTriangle—a name change from Baker in 2010 to represent both the drywall and plastering divisions of the company—and many other companies the shortages go well beyond the field. Five of the BakerTriangle’s seven branch presidents and 40 to 50 percent (including estimators and project managers) will be retiring within the next decade. “It’s a significant challenge to find people who can step into those roles,” Smith says.
    
While some contractors use subcontractor labor agencies, the large Texas contractor sees that as “a last resort.” And when they do turn to these agencies, they are required to meet the BakerTriangle’s insurance requirements and “pay all their taxes,” he says. “Around here, it is hard to find legitimate labor service companies that do everything you ask them to do.”
    
He says most high schools in major cities in Texas steer students down academic paths, rather than the trades. Contractors are more apt to find young workers graduating from rural high schools where industrial shop training is still part of the curriculum. BakerTriangle has recruited 25 to 30 new, young workers out of one rural school district in the past two years.
    
Job fairs at universities with construction-geared programs are another means of recruitment. “At this point there is such a shortage of manpower, we will go to any direction we can,” Smith says.
    
The highly competitive Austin market, like many prosperous markets in the United States right now, has low markup margins—among the worst he has seen in 40 years in the industry. “It’s very frustrating because you see new construction almost on every corner here,” he laments.
    
It’s an era when wall and ceiling contractors have to establish solid relationships with their GCs. But, he says, “to make them happy doesn’t always mean coming in low bid. A lot of work we get is because we are the most qualified contractor, not because we are low bid. They know we can outperform low bid.”

Technology & Innovation
Over his term, Smith wants to brainstorm with AWCI members about what it takes to be on the cutting edge. “What kind of pieces of technology are our members pursuing? Is it robotics? Augmented reality? There are just so many things out there, and I think we’re just touching the surface,” he surmises.
    
If anything, the labor crunch should be a catalyst for innovation, he suggests. A case in point is BakerTriangle’s 84,000 square-foot prefabrication facility in Dallas that produces finishes for Sto panel systems, including EIFS, plaster, thin brick, stone, dry-design metal panels and other ACM products. “Architects want to utilize some of the other products out there, so we try to be as versatile as possible,” he says.
    
About 10 percent of the Dallas’s plant’s production is unusual drywall shapes (outside corners, window seals, fur downs, for example) done with precision-cutting CNC machines. Smith says, “If you don’t have imagination in this business, you handicap yourself. You have to think outside the box.” BakerTriangle did that at the Perot Museum of Nature and Science in Dallas where it developed and built a perforated metal ceiling system. “We told the architect we could get them what they were looking for, and that is what won us the job,” he says. It also won the company several major awards for innovation.
    
An obvious advantage of prefabrication is it minimizes disruption on a job site. That can give a contractor a leg up when bidding a job on a busy, tight site.
    
Smith says he sees a place for robotics in plant settings, and he wouldn’t be surprised if it builds a following in daily production at many fabrication plants in the next five years. Other progressive contractors in the region have jumped on the prefab bandwagon. He explains: “I think it is going to become the norm because of the shortage of manpower. We just do not see the people coming through our doors looking for work. We have to learn to be more efficient at what we do.”
    
Experience tells him that workers from the field typically don’t make the best workers on a prefabrication line. His advice: “Hire people who want to work in the same place at the same time with the same breaks and lunchtimes—workers who like routine.”
    
On other labor-saving technological fronts, Smith says total stations have been an integral part of BakerTriangle’s layouts for the past three years at all of its branches; they are used on large jobs because they cut layout time by up to 40 to 50 percent. Their pinpoint accuracy also eliminates mistakes. “We probably had about 10 percent (errors) without total stations, and now we are down to one percent with total stations,” he says.
    
BakerTriangle also recommends contractors consider investing in electronic office management systems such as Blue Beam and Plan Grid, which connect the field to the office with real-time blueprints, markups, punchlists and other critical information in easy-to-read electronic formats. “It’s pretty cool because you get tied in with the GC, too,” he says. “They send RFIs out and you have access to them immediately. You can get that information into your foreman’s hands quickly, which wasn’t the case before. It has helped tremendously on the flow of the job, cutting down on all the downtime trying to get information to our people.”
    
When the technology was first introduced, Smith says the company expected pushback from foremen handed iPads to carry around site, but other than “a few diehard dinosaurs, “staff embraced the technology,” he says. And they learned quickly—in three months, rather than the six- to nine-month window they expected. “The younger generation here has been around computers pretty much their whole lives, so they took to it right away.”
    
He believes contractors have to take advantage of proven new technologies such as electronic plans management systems—sometimes despite their cost. “If you don’t jump on it now, in two or three years you might be so far behind your competition that it might be too late,” Smith says.
    
Change comes from the top—or it should, he suggests, noting that’s how it has worked at BakerTriangle. Owner Steve Baker “pushed us” to innovate more than a decade ago, and he led key people to that trough. Smith explains, “Once you see it in action and it is a viable part of your program and how efficient you can be with it, it is easy to have buy-in.” An example at BakerTriangle is BIM. The company was one of the first wall and ceiling contractors in the United States to use it over a decade ago, and it has been instrumental in many complex projects, including the Perot Museum.

Training & Safety
But new technology—and old technology, for that matter—have to go hand in hand with training. Smith says BakerTriangle, an open shop company, operates at least one apprenticeship course a year called the Power Rangers Program for 15-20 employees. The group of about 10 workers are trained for 12 months under the wing of experienced journeymen who are also qualified trainers. Students are supplied with the requisite tools of a drywall mechanic—an outlay by BakerTriangle of about $1,300—and are given several weeks of training on framing walls before they advance to fur downs and wall systems.
    
As an incentive, graduates get a pay increase. “After a year of intense training they are definitely earning their wages. Most of them in two or three years turn into top mechanics,” Smith says.
    
While most small contractors won’t have the budget for training to the same level, Smith says it is paramount that everyone does some type of comprehensive instruction. “If you rely on hiring seasoned people, you might only get one out of five people who are actually a functioning mechanic. The other four you realize very quickly might barely be qualified helpers. It illustrates how few are properly trained in the first place,” Smith says.
    
Over the course of his year as AWCI president, Smith hopes to hear from many contractors on how they get the most out of their mechanics, what motivators they have in place. He explains: “We’re seeing a decline in production. It’s fallen off over half in 30 years, so my concern is what’s going to happen in the next 10 years?”
    
While he attributes declining production levels partly to a changing work ethic, other factors include safety protocols. But safety has to be a top priority, he emphasizes. All BakerTriangle branches have their own safety officer and safety program. “It costs a lot of money to implement,” he says, “but we get something back when we get proceeds from the insurance on our workmen’s compensation, so it pays for itself in the big picture.” And most important, our workers go home at the end of the day without injury,” says Smith.
    
Safety accolades can also set a contractor apart from the competition. BakerTriangle has scored a raft of health and safety honors including the 2013 AWCI Excellence in Construction Safety Award for the largest increase in safety, training and awareness among member companies with more than 300,000 man-hours. The following year it took home the TEXO Specialty Contractor Construction Safety Excellence Award. Eleven out of the past 12 years, it has also earned the Platinum STEP Award for project excellence, service and safety from the Associated Builders and Contractors.
    
Smith credits AWCI with providing education and training that can help companies move ahead on safety and new technology. “It took me a while to figure out that the more you get involved in the organization, the more you get back from it,” he says. “My recommendation to new members is to get on committees that deal with issues you are passionate about.” He was on a benchmarking group with five past presidents of the AWCI, all “successful businessmen” who offered valuable advice on a range of industry issues.

How It Started
Choosing a career in the drywall industry was a “no-brainer” for Smith because he liked working with his hands. The 60-year-old started at Baker as a ceiling mechanic in 1977, a job he thought he had a handle on from a year’s experience with a GC. “After the first three hours,” he recalls, “I realized I had a lot of learning to do.” A quick study though, Smith was wearing foreman boots only 18 months later, and by 1983 he was a junior estimator on his way up the ladder to becoming project manager.
    
He headed Baker’s Virginia branch in 1988 during a Texas downturn where over the next three years he built up the company to perform about $16 million work with a high margin annually. “It was a saving grace for the company because we were dying on the vine at that time in Texas,” Smith says. He opened BakerTriangle’s new office, a 600 square foot storefront, in Austin in the mid-1990s with business volume at about $3 million. Twenty-odd years later, the branch averages between $26 million and 28 million annually.
    
Married to Kim for 16 years, the couple “has a blended family (from their previous marriages)” of five children. Five grandchildren—four of which are girls—are “always fun,” says Smith, who also when he is free from work raises black buck antelope and fallow deer on his 70-acre ranch. Hunting and fishing are also hobbies. “I used to be a golfnut but I got over it.”

Don Procter is a freelance writer in Ontario, Canada.