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12/7/2015

VEC Sees Business Surging as Leadership Reorganizes

GIRARD, Ohio – A new alignment of leadership, a consolidation of several companies under a single name, plus major construction projects related to energy and the oil and gas markets bode well for a Girard-based general contractor on the verge of having one of its best years ever.

“We’ve never had a backlog of work like this in our history,” says Jeff Barber, executive vice president, projects, at VEC Inc. “If things go the way we expect them to, we’ll be well over 300, even 400 workers by this time next year.”

Among the top projects for the upcoming year is a large portion of an early works package for the proposed $4 billion ethane cracker plant that Royal Dutch Shell is considering to build in Monaca, Pa., Barber says. “The early works package is all that’s issued with that particular project,” he says.

However, he emphasizes, Shell has not announced that it is moving forward with the plant, and this contract would be a temporary installation to support hoped-for construction at the site.

VEC, a general contractor at 977 Tibbets Wick Road, has diversified its capabilities and services since it was established in 1975 as Valley Electrical Consolidated. Forty years ago, the company was an electrical contractor that served commercial and industrial customers such as General Motors. Today, the general contractor has tackled complex jobs such as Vallourec Star’s $1 billion pipe plant in Youngstown and has expanded into markets VEC wouldn’t even consider in the mid-1970s.

The company has branched out from its Youngstown roots into new markets such as South Dakota, Texas, West Virginia, Pennsylvania, Kentucky, Wyoming, Louisiana and other states. Two major drivers of this growth are the natural gas and power-generation industries.

“Natural gas and electrical generation is our primary focus for next year,” says Dominic Spelich, executive vice president, client services. “We’re working with larger companies on the transmission end, where it’s not really driven by the price of oil and gas.”

The goal is to increase business by 18% annually over the next five years, Barber says.

“We’ve got some really nice projects going on,” Spelich says. “We have a large turnkey compressor station we’re doing in Butler, Pa., and we’re doing all the trades. It’s very large – we’ll be up to 50 or 60 people on that job in about eight weeks.”

Two potential local projects the company is eying in the near term are the $900 million electrical generation plant to be built by Clean Energy Future in Lordstown, and the $1.1 billion electrical generation plant recently announced by Advanced Power Services that would be built in Wellsville.

“Some of the jobs we’re working on are related to electrifying Chicago and New York,” Spelich says. “We’ve made a choice to work directly with the larger companies that have assumed ownership of the midstream companies.”

Much of this expansion into new markets came as the result of acquisition, Barber says.

In 2002, VEC acquired Evets Oil & Gas Construction Services. That allowed the company to enter the oil and gas market. That division operates a fabrication division in Hubbard where workers are busy manufacturing steel racks for Shell’s Monaca site. The racks, Barber says, would be used to house transformers that would temporarily power construction operations should the project be approved. “It’s the largest single-order contract we’ve ever done,” he relates.

At another plant at the Evets site, workers are busy welding fittings to pipe bound for a pipeline project in Butler County, Pa. “We have about 30 working here now,” he reports.

In 2010, VEC purchased J.L. Allen Co., which opened doors in the natural gas transmission markets. That company was sold last year.

Two other companies – Valley Electrical Consolidated Inc. and VEC Systems Integrator Low Voltage Solutions, which supplies and installs communications equipment such as fiber optics, access control systems and video conferencing systems – also operate as separate entities under the VEC umbrella, Barber says.

As of Jan. 1, however, all of that will change. “We’ve run under four separate names for years now,” he says. “Now, it will all be one company, VEC.”

The company has realigned internally as well. Instead of one president of the company, management is divided among four executive vice presidents. In addition to Barber and Spelich, Gina Pastella is executive vice president, operations, and Sharon Brown is executive vice president, finance.

“We are all moving in the same direction,” Pastella says. “We understand the high-level company goals and what each of our teams have to do to accomplish them.”

Pastella says all four executive vice presidents meet twice a week to exchange ideas and develop strategies on how to improve the company. “We have a strong focus on strategies,” she says. “Every one of our team members understands their role in accomplishing these goals. We communicate.”

The idea to create four executive vice presidencies emerged after a leadership retreat more than a year ago, Barber says.

Merging the three firms into a single company helps streamline financial and workforce operations, Brown says. “It creates more efficiencies in the office. We’re able to automate our billing under one system,” she says.

From a workforce perspective, union tradesmen can now serve under a single contract, where before, the company had to prepare separate contracts for those workers employed on a job with Valley Electrical and then on a subsequent job with Evets.

Training has emerged as a critical component
in the success of the company, Pastella says. “We invest a great deal in our team and in team development,” she emphasizes. In 2014, the company launched VEC University, an internal training program dedicated to its field team. “Our goal is to exceed the expectations of our customers,” she
says.

Pastella reports that the company has provided about 1,300 hours of training to its employees, many of whom obtain additional outside credentials. There is also an educational component for managers and staff, the VECU Leadership Academy, which helps advance administrative and leadership skills.

“It’s imperative that we have an executive team to define goals and strategies for the company
and that the leadership carry them out,” she comments.

In addition to 157 union tradesmen in
the field currently, VEC employs about 100
employees not covered in collective bargaining agreements.

Among the biggest challenges moving forward is securing a skilled workforce so companies such as VEC can handle the expected demand in the market in the near future. “We’re really making a push in recruiting apprentices and getting them into the skilled trades,” Barber says.

In the past, it wasn’t unusual for those operating the apprenticeship programs to wade through between 60 and 80 interviews to pick 14 for an apprenticeship class.

“Now, we can’t get 14 to even apply,” Barber says. “It’s a real struggle.”

VEC’s reputation as a general contractor has earned respect in the industry, Spelich says, and moving all of the subsidiaries under a single name will make it easier for job prospects to understand all of the services provided through a single contract and one company.

“We like to provide more than one service to our clients,” Spelich says. “If we’re doing an electrical job, they may need our low voltage installation. If there needs to be trenching done to run it, then we can do that ourselves.”

VEC’s leadership team: Jeff Barber, executive vice president, projects; Dominic Spelich, executive vice president, client services; Gina Pastella, executive vice president, operations; and Sharon Brown, executive vice president, finance.

 

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