Back from the Brink
Boeing, a large area employer, closed a major plant due to the downturn in air travel after the terrorist attacks of 9/11. Many of the telecommunications and electronic chip makers that call this area their home also were in a tailspin. And then there was always the not unexpected but nevertheless disdainful seasonal -construction slowdown brought on by an especially harsh winter.
Spokane, for those unfamiliar with this area of the country, has a population of 405,000. It is the largest city between Seattle and Minneapolis, and is the second largest city in Washington state. Its name comes from the Spokane Indians, who fished here for salmon. It?s a pleasant enough place to do business, in better times.
Allied Heating wasn?t suffering from a rookie lack of experience. The company was started in 1980 by two partners, including Dave Cotner and Dave Baly, who could draw on years of experience in getting customers and providing quality service. They started out as a service company, buying out an installation company in 1984.
Allied?s 1,200-sq.-ft. shop (the entire operation is only 6,000-sq.-ft.) is not automated, and most of the equipment isn?t new or flashy, according to Cotner. But it has what it needs to get the job done, including a Chicago 8-foot 16 ga. leaf brake; a Tennsmith driver turner, Lockformer Pittsburgh machine, duct notcher, Easy Edger and Snap-Lock; Pexto bar folder and shear; a Duro Dyne pin spotter, and a Wilbur 16 ga. slitter.
Business was down 58% and the number of employees had decreased by half, from around 40 to 20. According to David Nave, a former Californian who is in charge of the company?s sheet metal shop, ?It was scary to see this happen to a once very profitable business.?
Some sizeable jobs continued to come through, including heating and cooling for some large U.S. Postal Service buildings, so there was hope. A nice two-year job came along involving retrofitting an old steam plant into upscale restaurants and shops. But the downhill slide continued, and as things got worse some of the employees went elsewhere ? another blow to this residential and commercial hvac-sheet metal fabrication company, which always counted on its highly skilled work force as a means to land major jobs.
‘Not without a fight’Recalling those hard times, Nave said, “We had lost a lot of main people but some of us were not going to go down without a fight to save a company we love and a company that had been in business for more than 30 years.”
The remaining workers had to work harder than ever, trying to extract a profit out of each job, no matter how small. “Struggling,” as Nave put it, “tired from extreme stress and worry, it seemed like things weren’t getting any better for us. The company was in a financial crunch and we had no idea just how hard it is to come out of a situation like that: we had never been there before.”
Suddenly there was a light at the end of the tunnel. Lead commercial installer Marlan Turner received a phone call from his brother, who happens to be project manager for hvac for Costco – the Seattle-based, $31 billion (2000) a year retailer-wholesaler. Costco has 349 warehouses in the United States, U.K., Canada, Korea, Japan and joint ventures in Mexico. It sells memberships to its retail customers in return for low, discount prices.
Turner’s brother, according to Nave, was trying to save his company hundreds of thousands of dollars annually by installing hail guards on its rooftop hvac equipment, in order to protect the air conditioning coils from damage. Each store has at least 20 hvac units, of 20 to 50 tons each. After searching, they found no hail guards on the market to their liking.
As a custom fabricator, Allied makes pretty much everything it needs in-house. It needed no new equipment for this project. It didn’t take long to come up with a prototype hail guard that seemed ideal for this particular need.
Nave said, “We built our type of hail guard from 0.081 aluminum framing and an .081 expanded metal front. We shipped a week later and waited for a response. All the while we were saying, ‘Come on Costco!’” The anticipation was, to say the least, excruciating. But word was slow in coming. So slow, in fact, that Allied had pretty much resigned itself to failure on this one.
Then they got the call. And the purchase orders slowly began to roll in. In February, Cotner said they were on their way to install the hail guards at a couple of Kansas City Costco stores, then two in Dallas, two in Houston, one in San Antonio, etc. “I hoped to have orders for 28 stores by now and I’ve got nine,” Cotner said. “It’s tough when you’re a small company working with a $35 billion company, but we’re glad it’s finally happening.”
As a mark of Allied’s sincerity, Cotner himself drove some replacement hail guards to Kansas City when some of them got damaged in shipping. It was a 3,400 mile round trip, from Monday to Friday.
The company, of course, hopes the orders will continue to flow. For without them, the doors might have closed for good on this scrappy custom sheet metal fabricator.