Association of the Wall and Ceiling Industry Logo

Thriving in a Bleak Economy

“For many years the Pacific
Northwest, as opposed to the

rest of the country at various
times, has maintained a strong
economy,” says Steven N. Henricksen,
vice president, D.L.
Henricksen Company, Inc.,
Tacoma, Wash. “Unfortunately
this area has experienced a real
downturn over the past couple of
years. Our market is, very
depressed.” In addition to the
same economic woes the rest of
the country has experienced
starting from the stock market downfall
and the 9/11 terrorist attacks, Henricksen
explains that the large layoffs and
closing of plants by the Boeing Company,
a major employer in his area, has
especially hurt. “A large number of out-of-out-of-
state companies have located in this
area in the past 10 years,” Henricksen
says. “The increase in contractors and
decrease in work has made this market a
very difficult one.”

Yet, Henricksen says, “We continue to
be successful.”

How does the company continue to
prosper in a down economy?

First, a little history. The current generation’s
grandfather, Nels Christian Hen-ricksen,
started a company in the early
1900s and became a larger general contractor. His son, Donald L., after working
for his father for a time, struck out
to form his own plastering company, the
current one, in 1948. He ran the company
until his death in 1977, and his
wife, Jean then took over until the mid 1990s
when she passed away. Meanwhile,
their son James R. (Rocky) started
with the company in 1962 and is
now president, and his younger brother,
Steve, came on board in 1974, and is
vice president.

The company moved into drywall and
metal stud framing in the late 1960s,
which has become a large portion of the
business. But, as says Steve Henricksen,
“We’ve retained our plaster orientation
and are one of the few companies in the
area that still specializes in plastering.”

The high profile the company has in
ornamental plastering is a key factor that
differentiates the company from its
competition and allows it to continue
to be successful during down times. In
the mid 1970s, the state legislative
building in the capital city of Olympia
was upgraded to become earthquake
safe. “My dad was alive then and did the
ornamental plaster on that very large
project. My brother and I learned the art
of plastering from our dad.” Since then
the company has been involved in a
number of the high profile plaster renovations,
such as both the Pantages and
Rialto theaters and the old public
library. “We’ll soon be bidding on a large
renovation in the state capital on some
of the work we did in the 1970s, which
is being replaced for mechanical upgrading,”
Henricksen says. “We hope to be
the successful bidder.”

How to Make a Profit

The three main principles that sustain
the company in tough times are the ones
every contractor needs, Henricksen says:
“Quality product, good service and
competitive pricing.” But what really
helps the company in these stressed
times is its competitive pricing. It is able
to often come in lower than others and
still make a profit.

This is due, primarily, Henricksen says,
“to our long experience and our careful
analysis of costs.” For instance, schools,
he says, “are our bread and butter. A lot
of contractors struggle with those jobs,
but we specialize in the work. we have
done them for so long that we have
worked with the same architects and
know what the clients wants.”

On the other hand, the company also
specializes in difficult types of jobs that
others don’t want, and do so by charging
for all of the costs that others might
overlook. On these projects, he says,
“Others sometimes think they can come
in lower using conventional cost structures,
but they lose their shirts and shy
away from them in the future.”

One example of this type of difficult
work is the detention center. “These are
nasty jobs, whether new or remodeling,”
Henricksen says. “There is a lot of concrete,
with a lot of small rooms and ceiling
work, security plaster, systems. It’s
not high production and is very labor
intensive.” Hospitals are another example
of this type job. “With hospitals
there is so much mechanical and fire
protection involved,” he says. “But we’ve
been around town for so long, we know
our production rates and have good job
data costing so we know what it takes to
do the more difficult work.”

But, even though the company knows
what to charge for more difficult jobs,
it has always been careful not to over charge.
“I’m proud that we’ve always
treated people honestly,” Henricksen
says. “There are sometimes opportunities
to overcharge somebody, but there’s
always the danger that you may get away
with it once, but not twice.”

On the other hand, there are some difficult jobs that the company avoids. “We
used to do a lot of spray-on fireproofing,
and at the time it was pretty lucrative,”
Henricksen says. “But over the last 10
years there have been more and more
contractors specializing in this area, and
they have gotten very efficient at it, so
now it’s not profitable for us and we shy
away from it.”

Keeping prices competitive and fair,
along with quality work and good service
have also been responsible for allowing
the company to get about 30 percent
of its work through negotiations rather
than bidding.

It’s the Little Things

Keeping prices low while maintaining
profitability is a challenge. “We’re a very
efficiently run company, and really work
hard at keeping overhead under control,”
Henricksen says. “It’s in the details,
in things as small as lubricating wheels
on the scaffolding and having good
power cords. You start from there and
spread out through the entire company.
It’s the fine points that can make a huge
difference. We discuss things like this in
foreman meetings and among the office
staff continually.”

One worthwhile expense, Henricksen
believes, is in purchasing plenty of labor saving
tools. “Some companies are stingy
about providing power tools,” he says.
“We feel the opposite. The more equipment
on hand, the less someone is running
all over looking to borrow a rotohammer
from someone else. Instead of
the worker loading each screw on the
end of drywall screw guns, the new
pneumatic fasteners allow you to put on
strip loads, which can result in a big efficiency
difference, especially on ceilings.”

The company also erects its own scaffolds,
“We prefer stationary scaffolds,
especially with doing plaster for exterior
work, because the worker goes back
and forth over the same wall so many
times,” Henricksen says.
Henricksen says the company now has
a special focus on ergonomics. But, one
of the problems of being an older company
is that the awareness of ergonomics
is a relatively new phenomenon. The
company has prided itself on its skilled
loyal work force, many of whom have
worked for the company for more than
30 years. But the repetitive motions and
heavy lifting resulting in wear and tear
muscular and chronic back problems
have resulted in claims and an increase
in industrial insurance. This has led to
the cutting back of some of the labor
force with an increased focus on
ergonomics for those remaining.

Another anomaly of being in business
for so long is that while the company’s
reputation has held it in good stead with
many old-time customers, at the same
time, Henricksen says, many have gone
out of business, “and many new poten-tial
customers are not aware of us,” Henricksen
says. “So we have recently completed a company brochure, which has Associations Matter
turned out to be very helpful when we
approach new clients.”

Yet being in the same area for so long
also has its advantages. The company
sticks to about a 100-mile radius, going
north through Seattle to Everett and
south to Chehalis. “The outside contractors
came in about 10 years ago
when we were at a pinnacle,” Henricksen
says. “A lot of them have found the
market not as rosy as they thought it
would be, so we’re now hearing rumblings
that many are planning to move
on. Local contractors are able to operate
more efficiently if they’re based only
within about an hour’s drive of work.

Associaitons Matter

The company is also a firm believer in
association affiliation. “We’ve been a
member of [the Association of the Wall and Ceiling Industries—International]
since the early 1980s,” Henricksen says.
“AWCI has been active working on
insurance and EIFS issues and is doing
good things along those lines. The
AWCI is also a good source of technical
information; often we find a specialty
product specified on a product, and we
know that AWCI can help us locate the
supplier. AWCI also connects us to our
colleagues everywhere.”

While Henricksen enjoys being able to
talk with other contractors not his direct
competitors from across the country, he
also enjoys meeting with about 35 of the
nearby companies in the Northwest
Wall and Ceiling Bureau’s association.

“When you see one of your competitors

seated across from you and realize he has
some of the same problems you do, you
tend to look at him differently,” he says.

All the contractors who belong to this
organization are union contractors and
they work to both maintain good relations
with labor and in encouraging the
unions to do a better job of training
apprentices. They work on hearing conservation,
drug testing and other programs,
and have monthly luncheons and
dinners featuring speakers on industry
issues. “We’re also getting more involved
in the political arena,” Henricksen says.

The NWCB is a valuable asset, Henricksen says, for it provides technical information
to owners and architects, opening
them up to a range of possibilities they
might not have considered otherwise.

As for the family outside the association
world, Steve and Rocky are both married,
with several children, some who are
either working for the company or are
planning to, to maintain the family
business. They all enjoy the many outdoor
activities offered by the Pacific
Northwest. When asked how the two
brothers get along, Henricksen says,
“Rocky and I have never exchanged a
cross word.” A remarkable high standard
for a family business with many high

Browse Similar Articles

You May Also Like

Component Assembly Systems, Inc. is one of the largest wall and ceiling contractors in the United States, but the company started out small in 1964 when it was founded as Score Carpentry,
CEMCO® is celebrating its 50th anniversary this year! Founded in 1974, CEMCO is recognized as one of the largest manufacturers of steel framing and metal lath systems in the United States.
AWCI's Construction Dimensions cover

Renew or Subscribe Today!