O'Neal Builds Future

O'Neal Builds Future

By Dick Hughes, Greenville Journal

If engineers are on the leading edge of upward and downward economic trends, the experience of O'Neal Inc., the Upstate design and construction firm, indicates construction is on the upswing, fueled in part by practical green initiatives.

President and Chief Executive Officer Kevin Bean said O'Neal "is starting to see activity pick up, we are starting to see it in the more traditional markets but also in this whole green initiative, energy conservation and alternative materials."

Bean and Director of Marketing Brian Gallagher talked about "painful" staff cutbacks in 2008, an awakening from a sleepy sense of being immune to economic downturns and the nascent recovery they see happening.

"Because we do both the engineering and the construction, I think we get a good idea when the trends are starting up and then we also get to ride them down," said Bean.

Bean said O'Neal first felt the recession in 2008 when engineering, which is early in the process of construction planning, went cold and "new opportunities and even current opportunities were being shelved. Luckily, our construction was still very strong for the next 12 months."

When revenue dried up, Bean said, O'Neal put 50-60 "good people," about a fourth of its work force of professionals, on furloughs without pay.

As traditionally used, furloughs last for short periods and employees expect to be called back when business improves. When the recession dragged on, so did the furloughs, and some engineers left for other jobs.

"I think it had great intentions, but at the end of the day it was distasteful for everybody," said Bean.

"We didn’t have any deadwood," he said. "When the furloughs happened, there were good people we wanted back. Fortunately, we brought back a majority of those people."

The recession, Bean said, was a rude awakening for O'Neal, a company that took pride in managing growth prudently, generating $100 million annually in revenue consistently, keeping employment "right sized" and not doing layoffs or furloughs "at all costs."

"We had been very steady," he said. "That’s what made this downturn so hard."

But now O'Neal is "seeing an improvement, and it seems to be steady," said Bean.

In addition to reinstating a majority of furloughed employees, he said, the company has made several new hires, building the staff back to 200, though still below the 250 "where my expectation is." In addition to headquarters in Greenville, O'Neal has offices in Atlanta and Raleigh, N.C.

What encourages Bean is that increased interest is coming from O'Neal's historical base – "Fortune 100 and 500 industrial manufacturing clients that have strong balance sheets and don’t rely on financing."

He said O'Neal has several projects in the planning phase, "a lot going toward getting funded, and about another third ready to execution. That's promising when it is across all those phases, and that means it is going to be sustaining."

In addition, Bean and Gallagher said the company is seeing "homespun" manufacturers get into "this whole green initiative, energy conservation and alternative materials," less out of motivation for LEED certification than self-interest to reduce energy costs and gain other benefits that make sense. He cited and 150-year-old New York manufacturer that is revamping its entire operation focused on energy conservation.

The company recently completed five or six "green" jobs and is finishing a packaging plant in Indiana with LEED certification in mind. O'Neal built a pilot plant in Georgia to turn plant materials into ethanol, and it is working on a plant in Montgomery, N.Y., to produce gas from municipal garbage.

Gallagher said the green movement has spread beyond "its roots in the commercial and educational environment … and has become more main stream for industrial facilities, as well."

O'Neal is celebrating its 35th anniversary this year. The company was founded by Paul O'Neal, who remains chairman of the board. Founded as a structural engineering firm, O'Neal added construction in 1996-97 to be able to offer clients a total package – from planning to design to construction.

O'Neal is employee-owned as an Employee Stock Ownership Program or ESOP. Bean said the board sets profit goals above what it takes to run the company and invest in the future with "the balance over this threshold distributed among employees as profit sharing in the form of stock they can get at retirement."

During 2008 and 2009, Bean said, "there were very few profits to share." What helped create understanding was the fact that O'Neal shares financial information with employees, and they know "if there's no money coming in, there’s a limit on what can come out," he added.