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Back from bankruptcy: Pickens-Bond's new owner, Hensel Phelps, has revved up revenues to $100 million in 1990.

Back From Bankruptcy

Pickens-Bond's New Owner, Hensel Phelps, Has Revved Up Revenues To $100 Million In 1990

In January of 1989, Colorado-based construction giant Hensel Phelps sent Bob Daniels to Little Rock to untangle the affairs of its new acquisition. After Daniels arrived, however, he almost didn't unpack his bags.

His mission was to clear away the debris left after venerable Pickens-Bond Construction collapsed in the summer of 1987 and was bought by Phelps. For Daniels, his new task seemed insurmountable.

"I was told the southeast market was dead and that the Arkansas economy was dead," recalls the affable 38-year-old division head. "I had a workforce that I had no personal confidence in."

But Phelps had agreed to finish up jobs Pickens-Bond had started, and Daniels went to work.

In spite of the odds, almost two years later Phelps now has a backlog of more than $100 million in work, and Daniels has finally revived this home-grown company in a success story that would warm any businessman's heart.

The Leader Goes Down In 1987

Pickens-Bond was founded in 1948 and was known as Arkansas' leading construction firm until 1987 when a number of ventures into real estate soured. Phelps, a $600-million a year firm, was looking for an entry point in the southeast market.

When he first came to Little Rock, Daniels was convinced that Phelps had made a grievous error.

"The people here convinced me that they could do the work," says Daniels, who has changed his attitude a bit. "Now, I'm Just real pumped up about the future."

When he took over at Pickens-Bond, Daniels found prospective clients were still dealing with the illusion the company was bankrupt in spite of Phelps' national reputation and net worth of $60 million.

"That made it difficult to sell any services," Daniels recalls. "Fortunately, we had some unique owners who overlooked that."

Last year, Phelps landed contracts for two major projects in the state and also spent more than $20 million with Arkansas suppliers and subcontractors. As head of Phelps' Southeast Division, Daniels also began picking up business outside the state.

Phelps has completed jobs this year throughout the South and southeast and has worked on projects as diverse as a high school in Jacksonville, Fla., to a new county jail in Memphis and a Naval ordnance station in Louisville, Ky.

"We're still feeling our way along," Daniels says. "In the competitive bid market, we've bid on a dozen projects and gotten three. If we can be successful 15 percent of the time, that's about as good as you're going to get."

Goal-Oriented Management

Daniels believes that Phelps' goal-oriented management system has provided the impetus for the company's comeback.

The Phelps team works with owners and architects to establish project goals and a realistic schedule for meeting them.

"We're budget-driven, too," Daniels explains. "If we don't achieve the desired budget, then we can't be very successful."

In Arkansas, Phelps currently is working on an addition to the Tyson world headquarters in Springdale and also is building hangars at the Little Rock airport for Arkansas Modification -- a company owned by British aerospace.

Daniels has been with Phelps for 16 years and was sent to Little Rock from the Santa Clara, Calif., office in 1989 to evaluate the future of Pickens-Bond. After clearing out the backlog of projects, Daniels set out to do some marketing.

"We're a little more selective about the types of jobs we bid," Daniels explains. "We look for complex construction on a short schedule -- it makes it a little more exciting for us."

Phelps will be going after that kind of work when bids are let soon for construction of a new Pulaski County jail and a water treatment plant in Springdale -- two of the larger, specialty-type jobs Daniels likes to do. The Arkansas Modification job is another good example.

Quake-Proofing Buildings

The company will construct three airplane hangars and construction manager Robert C. East of East Construction says that Phelps has prevailed on the project under difficult circumstances.

"We've had a lot of changes on their schedule," East explains. "They've been as professional a group of people as I've ever worked with, and their systems are first class. I'd welcome their ability on any job we did."

Interestingly enough, part of Daniels' six years in North California was spent in helping business owners "quake-proof" their buildings. Recent tremors of the New Madrid fault in east Arkansas, Daniels says, have provided a way for him to offer another unique service.

"A prudent owner should look at seismically updating their building," Daniels points out. "There are a number of minor things that can be done, and we're the perfect seismic upgrade people to do it."

Daniels also wants to take Phelps' expertise to Atlanta where the city is gearing up to host the 1996 Olympic Games, and a lot of spin-off for new construction is anticipated. Other marketing efforts have included such construction hot spots as Nashville, Tenn., and parts of both North and South Carolina.

"The southeast is a new market for us," Daniels notes. "It's generally a bit softer than the rest of the country, but there's always enough projects for the better contractors.

"The first thing you have to do is get your name out in the market, and there's a lot of development going on in Greater Atlanta. We've bid a number of public projects. We haven't gotten any, but we've been consistently second."

Worldwide Construction Opportunities

That doesn't seem to matter to Daniels right now, and he believes he'll land the business sooner or later. With the recent economic union in Europe and new development in other parts of the world, Daniels says he's planning to be out of the country some to check construction opportunities.

"People will be feeling out the market there and waiting to see what will happen," Daniel says. "There are a lot of international laws regarding construction. As those are understood, you'll see more happening."

While long-term expansion into foreign markets is part of Phelps' present plan, Daniels says the company's first obligation is to Arkansas and in trying to keep quality employees from leaving the state.

"A lot of what draws talent to an organization is long-term potential," notes Daniels, shrugging off the memory of his dismal beginning in Arkansas not long ago.

"I'm committed to proving the skeptics wrong. The market is here, the opportunity is here, and I hope to attract as many of those employees as are willing to ride it out. If not, I'll be the last guy out the door."

PHOTO : Business is looking up: Bob Daniels, head of Hensel Phelps' Southeast division, says he's

PHOTO : sold on Arkansas in spite of a rough beginning. Daniels has been keeping his eye on the

PHOTO : progress of recent site work (above) for the Arkansas Modification project of the Little

PHOTO : Rock Airport.
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Article Details
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Author:Lorenzen, Rod
Publication:Arkansas Business
Article Type:company profile
Date:Oct 8, 1990
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