CONSTRUCTION: Business Builds

No. 1 feast & famine industry is heavy engineering construction. Ordinarily it does not get started until the rest of U. S. industry is already going full blast, until corporations need new factories and feel flush enough to buy them. This year U. S. industry started its war boom only in September, but last week it found that it had already carried the construction industry along with it.

Total construction contracts let in September (F. W. Dodge Corp.’s 37-State report) amounted to $323,227,000, compared to $312,328,000 in August, to $300,900,000 in September 1938. One curious brake on this big advance is contractors’ fear that war, if it lasts more than a year, may more than double costs, as it did last time. So they are afraid to bid for jobs taking two years or so to finish. Thus, in New York City last fortnight, only one bid was offered for a whopping new Criminal Courts Building, and it was nearly $1,000,000 above the city’s $8,700,000 estimate, which is usually above the successful bid. At Cleveland, two publicly financed bridge projects drew no bids at all.

One construction company which is not usually afraid to bid is the industry’s aristocratic Turner Construction Co. About half of its business is handed to it on a cost-plus basis without the indignity of competitive bidding, and it boasts that in four years picked at random (1923-27-29-30), its bills on 151 sample buildings costing $69,725,000 actually cut an average of nearly 2% from bid estimates; that over 60% of its business is repeat ordering by old clients.

Last week the company was working on $20,500,000 of uncompleted contracts (against only $8,500,000 at this time 1938), nearly half of them secured in the three months ended Sept. 15. Two-thirds of this backlog is for corporate accounts—all the way from $20-50,000 plant additions, to a super store for Tiffany & Co. on the elegant corner of Manhattan’s Fifth Avenue and 57th Street. From the U. S. it has $7,800,000 in orders: for USHA’s Tasker Street Housing project in Philadelphia, for U. S. Navy’s air bases building on the strategic Pacific islands, Hawaii, Midway, Johnston, Palmyra.

Sixty-eight-year-old Henry C. Turner, a Quaker from Maryland’s tony Eastern Shore, came out of Swarthmore in 1893, when the U. S., ceasing to stretch out, was beginning to build up, turning to reinforced concrete to do it with. His company grew rapidly, helped by generous orders from Paper Magnate Robert Gair, Warehouse Magnate Irving Bush. Up to Sept. 15, 1939 it had done $434,333,000 worth of business, eight of its jobs exceeding $5,000,000 apiece, 126 running from $1-$5,000,000. Nineteen twenty-nine was its best year (gross $43,717,000), 1933 its worst since 1909 (gross $1,994,000).

Remarkable is Concrete Man Turner, who looks more like a Groton headmaster than a building contractor, for his achievement in keeping his staff together in spite of the vicissitudes of the volatile U. S. construction industry. Including Vice President (for Philadelphia) H. C. Turner Jr., who has only ten years’ worth of service stripes, 13 executives (average age: 52) of this 37-year-old company average 26½ years with the company. Down, the line, 25 superintendents average 17 years, 70 foremen 19 years. No small achievement is this in an industry which must count on starving three years out of every ten, just getting by another three.

Another, bigger construction aristocrat is the engineering subsidiary of Stone & Webster, Inc., utility advisers, founded in two small rooms in Post Office Square, Boston 50 years ago by M. I. T. Men Charles A. Stone and Edwin S. Webster. In that half-century they have over $1,000,000,000 of construction, $11,000,000,000 of appraisal work to their credit. In the last fortnight, Stone & Webster’s engineering offshoot took in more orders than in 1939’s first eight months, ran its backlog up to $31,000,000 and was dickering for another $15,000,000 worth of business. Its contracts billed in 1938 amounted to only $21,000,000.

Outstanding among Stone & Webster orders was one to build a 32,000-kilowatt generating plant to help Big Steel’s huge plants in Pittsburgh’s Monongahela Valley. Big Steel, fresh from a $642,000,000 modernization program, still has more old-fashioned equipment to replace than its smaller competitors. (Only a month ago it resurrected some old-style hand rolling mills to help handle its huge order book.) Last week word leaked out that Big Steel would install three new continuous rolling mills in its new ($60,000,000) Irvin Works at a cost of over $10,000,000, which is just a drop in the bucket alongside what Big Steel and all the Little Steel companies will have to spend if operations stay at capacity.