O'Neal Rebuilds as Recession's Effect on Clients EasesBy James T. Hammond
The impact of the recession on manufacturing created huge ripples, not least of which was the crunch for Upstate South Carolina design and engineering firms such as O'Neal, Inc., which President and CEO Kevin Bean said is "joined at the hip" with the chemical, automotive and other industries it serves.
From peak staffing before the recession of 350, O'Neal shrank to about 150 in tandem with the manufacturers that make up most of its business.
But Bean says the worst is behind the company. As it marks 35 years as an independent, Greenville-based, employee-owned company, O'Neal has rebounded to work force of about 180, and is looking to hire more with specific skills the firm believes will be in demand as manufacturers gear up with new processes and growing demand for their products. It’s also looking ahead to expand into new markets such as renewable energy and biochemicals.
"The recession forced us to refocus," said Brian Gallagher, Director of Marketing for O'Neal, "and service our core clients."
Those include BMW Manufacturing, Michelin, and Fiberweb.
McGraw-Hill's Southeast Construction magazine ranked O'Neal as the No. 3 design firm for manufacturing and industrial facilities in the Southeast, and 33rd largest design firm overall in the region.
This month, O'Neal announced it hired five employees with decades of experience. Mike Hixson, O'Neal's new procurement manager, has two decades of logistics management, most recently with Fluor in Greenville; Jeff Pettit, senior architect, has 25 years background with Upstate design firms; Doug Phillpott, staff process engineer, brings 22 years experience with various Upstate firms; George Zokoff, project manager, is a 25-year veteran of construction and engineering; and Jeff Brogdon, safety technician, has worked in his field for 15 years.
Some employees furloughed during the recession have been brought back on board, and O'Neal expects this year's business to double 2009's recession-hit levels.
O'Neal, founded 35 years ago by Paul and Judy O'Neal, has regional reach, with offices in Atlanta, GA. and Raleigh, NC. Paul O’Neal is retired, but remains chairman of the board.
Chief Financial Officer, Judy Castleberry said O'Neal entered 2010 with a strong backlog of work, and currently has $80 million to $100 million of work on its books.
"Our wagon is clearly hitched to manufacturing," said Bean.
Noting that some firms have gone out of business because of the Great Recession, Bean said the clients that once worked with those now-defunct firms represent a "perceived market share out there to be won."
But the company's bread and butter expertise in manufacturing processes and equipment already is beginning to pay off as companies sense a recovery and expanding markets for their products.
One major chemical company in the Upstate that is an O'Neal client is poised to expand, Bean said, without naming the company. The chemical manufacturer is vertically integrating, to leverage more control over stages of its business and maximize typically slim profit margins, Bean said.
Despite forecasts that manufacturing is in long-term decline, Bean said he's not sure he agrees. He sees companies with cash in the bank preparing to self-finance the infrastructure to expand. And he said he sees manufacturers once again looking at their home markets as places to create new plants and hire workers.
"There's no longer much cost savings in going to Mexico," Bean said.
O'Neal describes itself as an integrated engineering, procurement and construction company that specializes in the equipment and processes of industrial clients. Its niche is projects in the $5 million to $50 million range, but it has had jobs worth more than $100 million.
O'Neal's executives describe a relationship with manufacturers that is evolving.
The time – and investment – by clients to arrive at a go-or-not-go decision has shrunk, they said. Where an industrial client once might has spent .0% of the projected cost on design and research before making a decision, now those customers are demanding a risk analysis and decision with just 1% to 2% of the estimated cost.
"Capital is so tight, boards are insisting, bring us a winner," said Bean.
Industries he sees ready to ramp up manufacturing capacity include building products such as concrete and roofing.
This article originally appeared in GSA BUSINESS September 27, 2010 Edition