By Kirk Stelsel
The owners of Garden State Precast transitioned away from the familiar and into uncharted territory with the goal of improving the company and the lives of their employees.
Hardware stores are a fascinating study in economics. Entire aisles are filled with commodity products with little price differentiation between brands. But walk into the power tools, appliances or outdoor equipment departments and you’ll find huge variations in pricing among non-commodity products.
In 2003, one job brought the advantages of non-commodity markets into sharp focus for Garden State Precast in Farmingdale, N.J., transforming almost everything about the company. But decades earlier, owners Kirby and Gene O’Malley and Dan Morris were just young men looking to make a living in an industry that afforded them a job and a decent paycheck.
The journey begins
When Kirby graduated from college in 1970, the economy was in a recession and job prospects were grim. His cousin secured him an interview with Steve McCloskey at Interpace Corp., a manufacturer of large-diameter prestressed pipe, but Kirby wasn’t sure the work was right for him. Six weeks later and still without a job, Kirby’s interest was reignited after McCloskey sweetened the deal.
McCloskey told Kirby he’d transfer him to the engineering office in Parsippany, N.J., after a few years at the plant. He kept his word and became a mentor to Kirby. In addition, Interpace provided a job for Gene, who left college in pursuit of work after their father passed away. And it was there the two met Dan Morris, an employee in the production control department. Little did they know, the wheels had been set in motion.
From employee to employer
Interpace, which changed names several times, sent Kirby all over the country and world. Next, he followed some colleagues from Interpace out to California in the early ‘80s, where he worked for Hydro Conduit Corporation in the engineering department. But by the mid ’90s, he started to grow weary of working for a large corporation. Meanwhile, he and Gene, who was general manager of a concrete pipe plant in Farmingdale, N.J., along with Morris, began discussing the future.
Gene knew Duncan Thecker, a local businessman also located in Farmingdale, who was interested in selling his dry cast plant. When Kirby approached him in 1997, everything clicked and it was just a matter of figuring out how to make the transaction work. Thecker wrote down what he wanted on a half sheet of paper, which Kirby still has today. They shook hands and put a plan in motion.
At first, the trio didn’t have enough money, so Thecker put Kirby in charge of running the company until they did, with simple instructions to make it better for him. Morris joined about six months later. In about a year and a half, they secured the funds and purchased the plant. At that time, Gene joined the company as well. That was 1999, and from that moment on, the mad dash began.
“We had to hit the ground running because we didn’t have any money,” Gene said. “Everything we had was invested in the company. We worked every Saturday we could.”
Volume became the name of the game. The three increased capacity and output greatly, tripling production in just two years. As the years went on, though, the grind of long days and weekends wore on everyone. The company was pouring 140-150 yards a day for mostly commodity products with low profit margins. It kept them going, but a new opportunity was about to strike.
Goodbye commodity, hello custom
In 2003, the company broke from its standard products and bid a custom box job for Route 23 in Newark. The competition consisted of cast-in-place producers rather than other precasters. Knowing this, the three nervously bid the job with a higher profit margin than they were accustomed to.
“We thought, ‘Wow, we’re going to charge this guy a lot of money for this,’” Kirby said. “We were scared we were going to charge this guy that much for it but after he put it in the ground he said, ‘Boy that saved me a whole lot of money.’ That’s when we realized that had to be our niche.”
The three owners now could see they were “driving themselves nuts” competing with other precasters on low profit commodity items. The management team switched its focus from increasing revenue to increasing the bottom line. The company shrank in size but increased in profitability and improved in nearly every other facet.
“What we do now is less yards and better quality and safety,” said Mike Vergona, plant manager and a 13-year employee. “To me, after 10-11 hours the guys aren’t as productive or as safe.”
A big factor in custom work is the engineering and estimating department. Paul Heidt, engineering manager, helps ensure the right projects are bid accurately and that everything flows smoothly to production. Heidt is a holdover from Duncan Thecker Precast and is responsible for most of the custom pricing and all of the quoting. His department sees 3,000 to 5,000 projects a year, of which it releases 300 to 400 to production. Those jobs are the bread and butter but they have to be done right, a fact that is not lost on Kirby.
“It costs us a lot to make these products and with quality and engineering the liability is great,” he said. “If we make a custom product, it’s all on us. Everything has to fit together.”
The company also manufactures Stone Strong retaining wall products and still manufactures light pole bases, manholes and catch basins. It pours some products in steel forms, including an upcoming culvert job in a form recently ordered from Wieser Form Fab. However, when it comes to custom products, it relies on aluminum panels from Western Forms. According to Kirby and Vergona, panel forms give the company the flexibility to pour almost any product. They even consult with Western Forms on projects such as a custom 3-sided culvert design for a recent bridge replacement project on U.S. Route 206 in Hammonton, Atlantic County. Garden State has worked with the New Jersey Department of Transportation for the past three years to design the project.
The culverts, about 40 feet wide and approximately 68,000 to 75,000 pounds each, will replace two bridges spanning over Clarks Creek and Sleepers Brook. Each section has 399 structural inserts and includes two special corner corbels to support the bridge approach slabs as the weight of the footings over time compress the earth below. When completed, the job will include 22 pieces. Each piece takes about an hour and a half to pour and a day and a half to build. The company’s consistency and accuracy on projects like this keep customers coming back.
“After we’ve done this type of work with someone, they’re not going anywhere else,” Gene said. “It’s not just a promise we can do it, we’ve proven it. Right now we have a number of bids out for jobs where they said, ‘Can you precast this?’ and we’re trying to increase that.”
Today, nearly 50% of what leaves the yard is custom. Thanks to owners who are accessible day and night, products that are delivered correctly and on time, and a policy to make things right for the customer, that percentage continues to rise. That same philosophy of dedication and care applies internally as well.
After the engineering and estimating department has done its work, it all comes down to production. There, Vergona ensures employees do the job right and on time, but he doesn’t lose sight of the fact that they have lives outside of work. Gene describes it as an “employees first” approach and said if you take care of the employees, then plant safety and the customers will be taken care of as a result. Employees receive needed time off for things like attending a kid’s game or personal issues and have the opportunity to have a good work/life balance. The owners know Vergona will do anything he can to help his people while maintaining their respect.
“I think Mike is one of the best guys at running a crew that I’ve ever been around,” Morris said. “He treats it like a family but he keeps them in line too. That’s a unique quality.”
“You won’t go out there and see two guys talking or sitting down,” Gene added. “Mike respects them and that’s the biggest thing.”
Chris Tyler, assistant plant manager, oversees production of standard products and said Vergona is “as loyal as they come.” It’s clear that culture trickles down. Tyler, like the others, takes great pride in the product the company manufactures and the way in which they do it.
“We make the product look nice, even the stuff that goes underground, by taking the time to make it that way,” he said. “We care and have a mindset where it’s not just making a product or getting production done; you’re doing a service. The product and doing the job right come first, but it’s more than just a place to go to work.
“They’re a part of the community that is Garden State Precast.”
Kirby is no longer at the plant every day, but his connection with the employees remains a priority. He has daily calls with Vergona and Heidt, as well as the accounting and quality control departments, even though he’s confident everything would run smoothly without a call. That’s because he cares greatly for those who come through the front gates each morning.
“They’re here to provide for their families and we respect that,” Kirby said. “We take the responsibility that God has given us very seriously. The decisions we make affect lives, so we don’t take it lightly.”
The net effect is a thriving plant that employs approximately 70 people focused on quality and has gone more than 650 days without a loss-time accident. The company is forward thinking and stays on top of trends and technologies thanks to its involvement in the industry as a whole and its willingness to see the more global perspective.
Garden State Precast has been involved with NPCA for many years. In 2002, it became the first NPCA certified plant in New Jersey. Kirby served on the Board of Directors and as chairman in 2010. He will become chairman of the NPCA Foundation Board in 2018. Heidt has served on the NPCA Board and continues to serve on committees. Garden State employees frequently take advantage of NPCA webinars and in-person educational courses at The Precast Show.
The O’Malleys and Morris even brought a vendor to the association. Years ago they hired James and Magda Muka, general software developers at the time, to write custom software for Garden State Precast to manage all facets of the plant. What the Mukas developed became the basis for the Titan II Precast Management System software now found in precast plants across the country. That’s just one of the many influential connections plant personnel have made.
“The biggest thing about NPCA is networking,” Kirby said. “We’ve got problems they’ve got in California or Colorado, so getting together with people in the industry is really what matters to us.”
“The certification program helps a lot too,” Morris added. “There’s so many items, it’s tough to keep your focus on all of them. When we have someone come in to check us, it helps.”
The O’Malleys and Morris have been in the industry their entire careers, but remain passionate. Innovating, overcoming challenges and providing a living for their employees keeps them driven.
“You have to be willing to take a chance,” Kirby said. “If you don’t try things, it’s never going to work. We want to change everything every day.”
Owners who care, dedicated employees and a focus on customization add up to make Garden State Precast anything but a commodity in the precast concrete industry.
Kirk Stelsel is NPCA’s director of communication and marketing.