On a recent episode of the American Supply Association’s Town Hall Interview Series, ASA Vice President of Sales and Membership Mike Miazga interviewed Mechanical Contractors Association of America CEO Tim Brink. Brink answered questions submitted by ASA members, talking about issues of prime importance throughout the PHCP-PVF supply chain, including how MCAA is best helping its members during the pandemic, changing customer expectations with mechanical contractors, talk of e-commerce solutions driving purchasing solutions, the current labor situation as well as his predictions for 2021. ASA’s Town Hall Interview Series is an exclusive benefit for ASA members and is being shared with BNP Media’s Plumbing Group brands Plumbing & Mechanical and Supply House Times, the official publication of ASA.
MM: I could probably go to Las Vegas and place a bet, and the bet would be: Regardless if you’re an ASA member, distributor, manufacturer or manufacturers’ rep, odds are you’ve bumped into an MCAA member.
MCAA is critically important to the health of our supply chain, huge mechanical contracting firms working on extremely important projects. Quite frankly, Tim, what it boils down to, is the health and safety of our country.
TB: You’d win that bet, I’m sure of it. We have more than 2,600 members across the country and in the MCAA world, we view our relationships as a family, and they tend to partner with their distributors and with the manufacturers. So I’m sure our paths cross every day. And I’m glad, finally, our paths are crossing in this way.
MM: What is MCAA doing for its members and suppliers during the pandemic?
TB: That’s been on everybody’s mind. I took over March 12, 2020. That was the day we were in Hawaii getting ready to start our convention, canceled our convention and we were all thrown into this COVID-19 environment. We got back, and our first priority was to make sure everybody in the office was safe. So we secured the office, secured a work-at-home environment, and then launched into, “How do we help our members survive this COVID-19 nightmare, adapt, pivot to remote working and keep their workforces safe?”
We launched into a series of webinars and virtual instances where we gave everybody some best practices on how to work from home, how to manage a job site remotely, and that was more reminders than anything else. We developed a whole list of new safety protocols for our members, for how to do the arrival at the work site, how to take care of the necessary questions that you have to ask at the beginning of the day, take your temperatures, social distancing, maintain productivity, if you can, while you’re social distancing, etc…
That was our first priority since construction was made essential, and I think everybody in both of our associations are very thankful for that because it kept all of our members with bread on the table and kept their families viable during the year because there’s a lot of people who are out of work and a lot of people who are going hungry these days because of this pandemic. So we really have a lot to be thankful for.
We also started a new part of our website, the COVID-19 resource center. We started working with MCA and SMACNA very closely to align our deliverables during this because usually, we go down the path of each of us developing similar resources, and we decided together that now is the time to combine forces, and we split up the duties a little bit. So it brought the MEP side of the industry together.
And then we decided since we were a networking in-person type of organization, we needed to figure out how we could create that environment, but virtual. So we started educating our people. We started getting to know our officers. Just like we’re doing here, we started interviewing significant people on the mechanical industry, and we called it Coffee With Koontz, and we went through a series, 13 weeks of that.
We’re now doing sponsor spotlights where we take all of the wonderful companies that sponsor our convention every year, and we’re highlighting those on Fridays. We’re giving our members the opportunity to get to know all of our manufacturer supplier council members, in order to create a replacement for that networking that usually happens at the exhibit during our convention.
And then we launched into education. We revised our whole national education initiative, which is based on in-person classes, locally. And most of our instructors now offer their classes virtually, and our members are taking advantage of that. We created a pre-institute for project management to satisfy the need to educate young project managers in our industry, and I’m happy to report we graduated almost 200 people from that new class that we developed in 2020.
We were working on the Hill in Washington, DC., fortunately, not last week (in reference to the Electoral College confirmation). But we did that. And we’re fighting for pension reform and we’re fighting for, right now, relief on federal projects that were bid pre-COVID, executed during COVID, and had significant impacts due to the COVID pandemic, and we’re gaining some traction on that. And all in all, we had almost 300 virtual instances in 2020 of educational offerings and best practices. And so I think the staff in the office and our membership came together and we’ve really responded to COVID pretty well.
MM: A lot of what you said there mirrors what we’ve got going on at ASA, so that’s awesome. If you had to take stock in March of 2020 to now, is MCAA having an even larger impact now going forward on your members than back in March, and why do you feel that way?
TB: I think so, yes. The responses we got from our safety offerings, from our educational offerings, more members than ever are taking advantage of those. Usually, with the networking and the in-person classes, we hit the same group of companies. They know the benefits, and they make the investment to send their people out of town and to these meetings. And now that the offerings are made available more broadly through the virtual environment, we’ve hit a bigger cross-section of our members. So I think that’s a really big deal to me because they’re all now experiencing what everybody else has, and I think it’s helping.
MM: Things are going back to normal, does the MCAA calendar and rhythm of business go back to normal, or do you take some of what you learned during the pandemic and put it into everyday practices going forward?
TB: I think our world’s changed, to tell you the truth. I think, yes, we’re hoping that our service conference that’s going to happen in Austin in October is going to go off. I’m hoping that that is, but we’ve pivoted with all our service education, with all our construction education, and I think there’s going to be a big desire going forward as people recover from this. They’re going to be busy, and their crews and their office staffs may be trimmed down a little bit to where they don’t have the availability to travel as much as they used to. So we’re going to keep our virtual offerings and the availability of those, and bring back our in-person offerings. So I think we’re going to hit a bigger cross-section of our numbers going forward by maintaining our virtual environment.
MM: A good question here from one of our members. They’ve seen a change in how customers’ expectations happen with residential contractors. Let’s flip it over to your side of the table. What have you seen in as far as customer expectations with mechanical contractors?
TB: Well, I think it’s just like with the evolution of the email and the texting and the cell phone. With more of the project staff working at home, I think the customers are expecting even more today than they did before, around the clock availability to the contractors they’ve hired. So that’s putting extra pressure on the members to respond to their customers and change the way they’re doing business.
There’s a greater need than ever for mechanical contractors to look at a project, get out ahead of it, pre-plan it, work with their partners in the supply industry so they can build and fabricate and manufacture in their offices where it’s safe and controlled, and then just get into the job site. That’s more important than ever.
MM: Here’s a good question from another one of our members. Are there technology solutions that you guys would like to see suppliers and distributors implement to make doing business with them a little bit easier?
TB: Absolutely. I think everybody’s going to the BIM modeling on the big projects, and the coordination and the 3D modeling and building it in the virtual environment before you even get to the job site. We have a product called the WebLEM, the web based labor estimating manual. And we have partnered with our manufacturer supplier council members to get all the product data linked to it. So now the WebLEM has all the labor units in it, and our goal is to have all the product data in it.
So your membership and our membership can work hand-in-hand by making sure that if they’re dealing with one of our members, making sure that their products are in our labor estimating manual. That way when our contractors model and go from estimate to model to manufacturing or to fabrication, all they have to do is take their model, download the materials, send it to their supplier partner, and then we’re off to the races. They know exactly what’s going to be needed and they’re part of the whole process.
MM: How long do you think it’ll be before mechanical plumbing contractors begin, not just utilizing, but depending on an e-commerce solution, to drive their purchasing process?
TB: That’s an interesting subject. We’ve been talking about that for a few years. We do a think tank every year with our benefactor level sponsors, and we started talking about that two or three years ago when we looked at the Amazon model. Most of our contractor members, and even here in the office, we buy our office supplies and the consumables and those sort of items online now, whether it’s through WB Mason, Amazon or we use a company called Impact Office Supplies. So most of our members are doing that right now.
I think as we shift more into really heavy fabrication, manufacturing, and they’re ordering thousands of pipe valves and fittings at a time, I think there’s going to be a tendency to go towards more e-commerce where it’s easy for the fab shop manager to go in and say, “I need 3,000 half-inch 90s.” Boom. And that’s where the partnerships are really going to be important. If the local suppliers or even regional suppliers can develop a system to where they work with their contracted partners, that’s going to help facilitate more productivity, more ease of doing business.
But then, on the other hand, the direct relationships with the suppliers are so vital in this industry. I was talking with a few of our contractors this week that, yes, you can order parts online, but the real value of a supplier partner is you call them up and you say, “I need it here at this date,” and if you have a good partnership, they’re going to get it there at that date. And then you reward each other with the partnership and the business. And you can’t replace that with e-commerce. You can’t.
Look, our business is made on relationships. The successful projects are made on relationships at the customer level, at the supply house level and at the craft level. If we have a good relationship, all of our members are signatory, and our labor partner is the United Association, and we have a great partnership there. You have a great partnership on that level, and you take a step back, and there’s people involved in everything. And when people feel like they’re in a partnership, they take care of their partners. And you can’t replace that.
MM: How quickly do you expect consumer demand to pick up this year?
TB: I think if you look at it, there’s going to be work. I think the hardest hit areas in our country are the coasts. Look at California, Oregon and Washington. They’re getting hit hard. Basically shut down again. Arizona’s hitting hard. The East Coast has been hit pretty hard. Cities have shut down. The Midwest has a lot of activity. I think there’s going to be work out there to bid. Texas is good, the Midwest is good, the East Coast is showing signs of picking up. California is still in a tailspin, so it’s going to be interesting to see what happens there, but work is still going on.
I think the people that have a deep bench in regards to the type of work they do are going to be more successful than their shops that just specialize in one area of the mechanical industry because in some areas, there are fewer jobs, more bidders and the people with the better resumes are going to get the jobs.
MM: What areas of the economy do you think might rebound first?
TB: Well, everybody is looking toward Biden and what he’s going to do. I think there’s going to be some infrastructure spending, and I think part of that’s going to be K through 12. At least for 21 and 22, beyond that, I think that that industry is going to get hit hard because it’s totally different. They’re going to have to change the schools and modify them so the kids can be safe, but then after that, what’s the education model going to be, going forward? Is it going to be more at home, is it more in school? Nobody knows that.
We’ve got wastewater and infrastructure projects coming that are going to be good. We have a shift away from fossil fuels and toward green energy. I think Biden is going to be a big proponent of that. Our members are heavy into the fossil fuel business, pipelines and refineries and that type of work. So that causes a lot of uneasiness in the membership, but it’s going to take a decade or a generation or two for that to be weaned away as we build up everything else.
It doesn’t happen overnight. Fossil fuels are part of everything that we have. Almost everything manufactured has some sort of oil component in it. So it’s going to take a while to wean away from that, but we’re America. We’re not going to fall flat on our face. We’re not going to let that happen. We’re going to continue to move forward.
MM: Where does MCAA see capital spending in 2021?
TB: Capital spending as far as projects go, there’s a huge project coming up in West Virginia that’s going on. It’s an offshoot of the big cracker plant in Western Pennsylvania. There’s going to be some great activity there. I think we’re going to see a lot of energy work, whether it’s in the green sector or the traditional sectors. You look at that whole movement now. Everybody’s vowing to be in electric vehicles by a certain date.
Tesla is building a huge plant in Austin right now. They just bought a huge building in Seattle, and more and more car companies are vowing to have a new platform coming out. So all of those technologies are going to require capital investment and facilities and people and technologies. And I think it’s good for our contractors and your members as well.
MM: Definitely. What are you hearing from MCAA members as far as maybe ballpark forecast for them, revenues up, down, in the middle, all over the board?
TB: It’s a little all over the board, and we track that through our dues collections this year. It gives us a good barometer of who’s doing well and who isn’t. We’ve had a number of members had a better 2020 than they did 2019. And that was from backlog and ability to pivot and be able to work in this environment. I think we owe a lot to that.
It might be a little up for some of our members in 2021, because I think there was the presumption that we were going to be out of this. So people were booking work. So I think some people are going to do better in ‘21 than ‘20, and some people aren’t. It’s going to be a challenging year for some of our members, and that challenge will probably really hit home about the middle of the year or into the third quarter.
MM: How do you think ASA can better strengthen its relationship with MCAA?
TB: That’s a great question. I think there’s lots of opportunity there. We have an innovation and technology department here headed by Sean Maguire. His whole purpose is to look into that type of thing, how we can automate, create digital collaboration points for everybody in the construction team, and that’s from the owner to the general contractor, the subcontractor, and to our supplier partners, so that everybody can be in the same virtual environment and know what’s coming, know what’s needed of them, when things have to arrive in, and where in the schedule that they fit. So I think there’s a tremendous opportunity for our supplier partners to get more involved in the projects now more than ever.
MM: In regards to fully coordinated drawings and models, where can a distributor add value? One ASA member says he/she envisions a world where the material list that lives within a model is seamlessly transmitted to the distributor. Is this a desire of an MCAA member in 2021 and beyond?
TB: Absolutely. I mentioned earlier our WebLEM product, and that’s where we see the future going. All of the large products now, we have to model. We have to do 3D modelings, and you have to do coordination virtually with the other trades, and those models have to be built on product data so that the measurements, when you send them to the fab shop, are accurate. So knowing what their supplier partner reps and sells is very important. That way they can include that product in the model so they can just take that list directly from the model, from the estimate, and send it electronically to their supplier partners. The answer to the question is yes, it’s very much on the forefront of everybody’s thoughts.
MM: Awesome. Got a couple of questions here about politics. Of course, at the time of this taping, we’re on the doorstep of the changing of the guard of the president of the United States. No. 1, general thoughts on does MCAA see any drastic shift with going from Trump to Biden? And more specifically, can we expect more or less spend with U.S. fabricators, construction companies and plants as we go into the Biden administration? The person that had asked us is primarily in the industrial PVF sector.
TB: Got you. Everybody’s crystal ball is a little different these days. I don’t think anybody expected what happened last week during the Electoral College confirmation. So it’s hard to tell. The benefit Biden has is that the Senate is split with the vice-president being the deciding vote. The house is democratic, and you have a democratic president. So we’ll have to have to see what comes out of it.
I think we’ll see some infrastructure spending, which will spur some new projects. We mentioned the schoolwork. I think the energy work is going to be put on the table, and they’re going to want to do things to put some money in the hands of the middle class, I think. We have a generation of workers, the older generation are in a part of the economy that’s phasing out, that that is more manually driven. And we’re going to have to find accommodations for those people and replace those jobs with technical jobs going forward. Not necessarily technical jobs, but the new manufacturing jobs, the new energy jobs, which are going to be totally different than the old ones. I think that’s a big challenge of this administration, we have to look 10 years down the road and figure out what America wants to look like and put the plan in place.
MM: Another question here from a member talking about work backlogs, job backlogs as compared to typical backlogs of years past. This member worries things will get quite slow before we figure out what to do with stuff like vacant office buildings and the abundance of office space not being used now. He also worries that the health care facilities and investments will be lower than normal and hospitality, and even in Dow University, and he wants your thoughts on that.
TB: Well, yeah, everybody’s working from home now. Our staff is in the office three days a week, and they work from home two days a week. A lot of our manufacturer supplier council members are still working remotely and have kept that in place throughout the middle of this year. A lot of our contractor members have done the same thing. They’re still not back in their offices. This creates a big problem for the city because they’re not getting the business tax. And a few cities around our area are actually thinking about converting to a work-from-home tax for local businesses.
That way they can continue to get the revenue. It won’t be on the individual, but it’ll be on the company, if you’ve got people working from home because they survive on that tax base for the offerings that they give everybody and the services that they provide. So it's going to be interesting to see what happens to all the surplus of the office space. You can get really good office space for cheap around here right now, for those who want to be in an office.
As far as backlogs, it depends on the area of the country. We have some contractors in the Connecticut, Rhode Island and the Boston area that have informed me their backlogs are a lot less than they were going into 2020 than they are coming into 2021. There’s still activity. There’s still stuff to bid, but they don’t have the near backlogs. Our people in Texas and in the Midwest have a good backlog. California, there’s work, but the availability of executing that work with all the shutdowns and everything else is a challenge.
Everybody in 2020 said, “Oh, ‘21 is going to be better,” and here we are in ‘21, and we’re in a bigger spike than we were in 2020. I think that’s got everybody on their heels a little bit. Hopefully, this vaccine does what it’s supposed to do and we can get the restaurants opened up, and we can get all the small businesses opened up because when those close, that’s the engine of the economy. And if those people aren’t working, more funds have to be diverted from infrastructure and other projects to take care of those people, rightfully so. So we really need to get people back to work soon.
MM: Let’s talk about labor. That’s always a big topic for us and for you. ASA estimates a 100,000 folks in our industry are going to retire within the next decade. Because of that, one of our three major initiatives going forward, that we launched last fall, is our project talents platform, which is aimed at helping our members attract the next generation in the workforce. What has MCAA seen with the labor issue right now? Has the pandemic made it worse? Where was it before the pandemic? Where is it during the pandemic and where we’re sitting now, and what do you see in the future?
TB: As far as craft side, before the pandemic, the United Association was at an all-time high for membership. During March and April, when everything shut down, there was a tremendous number out of work. But once we got into to May, June and July, everybody was back to work, which was great. The projects bounced back and they were opened up.
Our biggest challenge right now, the overall hours for 2020, they weren’t down as much as we thought. Some people say it was anywhere between 8% and 14% that the hours were down, which for a global pandemic, I think, is phenomenal. And by the second half of the year, everybody was back to work and projects were going. It doesn’t mean they were productive and making money, but everybody was back to work, which was great.
Going forward, we’re really addressing the way we solicit, recruit and select future apprentices. We’re really committed to the idea that we need a diverse workforce, a workforce that is inclusive, and we have a joint initiative with the international training fund to do just that. We’re revamping all of the procedures on how you select apprenticeship so we can better model the neighborhoods and the cities that we work in. We want the workforces to be representative of the makeup of the cities, and by doing that, we broaden the pool to include a lot more really qualified individuals to get into the trades.
And we’re doing the same thing on the employer, office side as well. We have 60 student chapters across the country with universities, and we have a very involved program where we work with our local affiliates to help them interact with the students and get those engineering construction management students into our local contractors’ offices. So we’re revamping the career development department. We’re working with United Association on the apprenticeship side. So we’re trying to put these programs and enhance these programs so that we get more people into the industry.
MM: Labor is going to be hugely important, I think, throughout the supply chain here, going forward. Let’s wrap it up here, Tim. And again, I can’t thank you enough for taking some time out of your day to talk to ASA members. Give us the CliffsNotes version 2021 in the supply chain: concerns, points for optimism, etc. If you’re sitting in December 2021 holiday season, where are we sitting, do you think?
TB: I think you’re going to see a better relationship between contractors and supplier partners going forward. It’s our mission this year, and actually we have scheduled in March what we’re calling the MCAA Converge, where we’re putting our contractor members, our board of director members with our manufacturer supplier council members in an environment where they can learn from each other and get to know each other. And this is our beta test for it, and we’re going to roll it out. Again, we’re going to probably postpone it until the end of the year due to COVID concerns because this has to be an in person meeting.
But our goal is to take an already good relationship, because the manufacturer supplier members in MCAA are full members in our association. They’re not sponsors. Everybody has membership dues, but in our eyes, they’re full members. Two of their representatives sit on our board of directors as full board members, and so our goal is to really enhance the relationships this year far above what they have been in the past, and they’ve been really, really good in the past. 2021, that’s one area of concentration that we really want to make those relationships of more value to both sides. It’s more important now than ever.
MM: No doubt about it. Hopefully, this vaccine works and we can get back to some semblance of normalcy, get back to in-person meetings. I know MCAA always has a tremendous event in the early part of the year, and hopefully you guys in 2022 are rocking and rolling at your national convention.
TB: We’ll be in San Diego at the Marriott Marquee. I’d love everybody to be there because we’re going to need to really get together, shake some hands, hug each other and celebrate being back together.
