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Wise Investment

Incoming AGC President Al Landes looks forward to sharing association benefits with members all year long.

BY AMY DREW THOMPSON

At press time, Al Landes was weeks away from the start of his 43rd year with Herzog Contracting Corp. These days, his business card says president and COO, but when he signed on back in 1972 his title was clerk/laborer, his salary a princely $2 an hour.

“I like to tell people I’ve only had two fulltime employers in my lifetime: the U.S. Army and Herzog,” he chuckles, “and it’s the truth.”

Landes remembers the pride and excitement at the close of his first fiscal year with the company he joined – by way of the local unemployment office – after his three-year stint in the Army as a medical laboratory specialist. “We were so happy because our volume was over $3 million. And today, if you take the Herzog companies as a whole, we’re over $400 million.”

Indeed, Landes hasn’t just seen growth, he’s lived it. As he rose through the Herzog ranks, clerking when the asphalt plant was running, day laboring when it wasn’t; climbing the ladder to estimator, then up through various vice presidential titles to senior overall VP and eventually top dog, the company has morphed from a small, regional highway contractor in the Midwest into a nationwide, diversified behemoth, tackling highway, mass transit and heavy civil with aplomb.

Landes, too, has done some evolving of his own.

APPETITE FOR CONSTRUCTION
Raised in the small farming community of Bethany, Mo., Landes was not born into a construction dynasty, he was adopted into one. “I have been doubly blessed,” he says of his life, personally and professionally. “I still have my father. He’s 88 years old now and he’s a great influence on me. But Bill [Herzog] was my professional father…very definitely my mentor.”

It was Bill Herzog, the founder of Herzog Contracting Corp., who gave Landes the flexibility to go to college while working as an estimator, and in the process of attending Missouri Western State University he changed his major – initially biology – to civil engineering. “I came to the point where I was going to have to transfer to get my degree,” he remembers. He was accepted at the University of Missouri and Bill Herzog let him know there would be a job waiting when he got back. He also offered Landes an alternative.

“‘You’ve done such a good job with the estimating,’ he told me, ‘and we need a chief estimator today.’” Bill Herzog, who’d gotten his own engineering degree at Mizzou, knew the value of an education but also of an irreplaceable employee. “Would you be interested in that job?”

“I knew full well that if I quit school, the chance that I’d go back was probably slim,” says Landes, but after talking it over with his young wife, Gracie (they will celebrate their 44th anniversary this June), he decided to take the job.

“In making that decision, I just said I was never going to look back,” says Landes, “because I’m not going to be the one who says, ‘Boy, I should have stayed in school’ or whatever else. I was consciously making this decision.”

Given the steady climb he’d have in the coming decades, there’d be little need.

Right from the get-go, Landes felt at home in construction. “Even when you’re just estimating jobs, as I was, you’re building them in your mind,” he says. “And I just loved to build things. You start with nothing and you end up building a project. On the estimating side, there’s this absolute ‘thrill of victory’ or ‘agony of defeat’ that happens in just a few minutes. There’s the thrill of the hunt, and if you win the job you’ve shot the bear. But you’ve still got to skin him afterward – which means the construction project must be built.”

AGC, he says, should be part of every contractor’s playbook: for networking, for advocacy, for skill building and more.

THE ADVANTAGES OF MEMBERSHIP
Bill Herzog instilled the association’s importance in Landes early on. “‘Al, if you want to advance in construction,’ he said, ‘everything you need to be a good contractor AGC can help you with.’” And he pointed all the way back to AGC’s formation in 1918.

“He’d talk about President Woodrow Wilson, about nation building, about the importance of having an association that could interact on a federal level to discuss and plan America’s growth…” And that inevitably led to the many reasons why membership in AGC – now rapidly approaching its centennial – was of great consequence.

It stuck with him. And so Landes chose “AGC, an Investment in You and Your Company” as his presidential theme and plans on spending his term reminding members of the outstanding benefits membership has.

“What do you think you’re getting out of those dues you’re paying at the chapter level and therefore at the national?” he asks. “Contractors make an investment in people and equipment and a whole lot of things. They make one when they sign on as a member of AGC. So, what’s their expectation? At the end of the day, I’ve found that often people don’t recognize what’s going on on their behalf.”

Landes sees part of his role as showing members what this investment buys them, and that a greater understanding of – and involvement in – what AGC does will give them maximum ROI.

Advocacy: for contractors, he says, it’s crucial. “Even the most passive AGC member has seven people walking the halls of Congress for them every day making sure they don’t get hammered,” says Landes. “Eighty percent of the work we do is on defense from a legislative standpoint, trying to keep bad legislation from passing. To prevent things from becoming more regulatory. We need that.”

AGC dues pay in part, for people whose full-time job it is to protect the industry. What, Landes asks rhetorically, would you pay for that if you had to do it yourself? “As an individual company, you may be able to do a lot of things, but if you want to talk to Congress?

You can’t do that. As an association of contractors, you can.

“I could make the argument that they could justify their membership dues based solely on advocacy,” he says with confidence.

“The bigger you are, the more you pay, but even a small contractor – which Herzog was at a point in time – is getting return off that investment.”

But, he notes seriously, federal is just the tip of the iceberg. “You go back to the state chapters – like my home chapter, AGC of Missouri – they’re advocating right here at home on the state level. And in your specific communities, members are advocating at the local level on behalf of the entire industry. It’s priceless.”

Education: From skills to safety to management and on, its importance is most evident to Landes when he thinks about what Herzog Contracting Corp. was when he signed on for that first $2/hour job. “We were an asphalt-paving highway contractor,” he explains. “Everything we did was based on a design-bid-build process. If you had enough bonding capacity to bid a job, you did. Then the low bidder would win, it was that simple.”

It was a time when all he had to worry about was being a contractor, he says, something that in today’s market could easily be a death knell.

“When we were strictly asphalt it was like a roller coaster. If asphalt was good, we were good; if it wasn’t, well, you know what it was…” The industry has come a long way in the decades since.

“Everything we do now is based on a proposal. So I’ve got to figure out how to be a contractor and an engineer. Now we also do maintenance, so I’ve got to be a maintainer. And we’re an operator, so we had to learn how to do that.”

It’s not a quantum leap for contractors, he says. If you can build it, you can maintain it. It’s a transition companies can make. Herzog’s diversification has been a blessing in many ways, none so striking as when the economic downturn hit. “Look at the market you’re in,” he advises. “Most companies need to start figuring out how to be more than one thing or they are going to be extremely challenged.”

Education through AGC can help companies move toward that goal – and others. “Activities, classes, seminars …” Landes lists “… anything your company or your employees need – even members as individuals who are personally interested in expanding their skill sets – AGC can provide.” Landes hopes to encourage members to take maximum advantage of the educational opportunities AGC affords them.

Outgoing president Paul Diederich, a stalwart advocate for education – whose own theme has been “Building Knowledge” – believes Landes will carry that torch for him as well.

“Al is very engaged in having his craft labor, his management people and the owners of the company participate in learning cutting-edge things. He knows that AGC provides those opportunities.”

Relationships: Who you know can be as important as what you know, and Landes says AGC-built relationships work hand in hand with education when it comes to moving forward, individually or as a company. “Keep in mind, [Herzog] started out as a 100 percent asphalt paving contractor – strictly highway,” he says. “Now I like to say if it’s got a steel wheel and a steel rail, we love it.”

And he credits Herzog’s AGC connections when discussing the company’s first transit rail project in California in 1979. It went from San Diego to San Ysidro.

Bill Herzog sat on AGC’s Highway Division Airport Committee at that time, Landes explains, along with a man named George Griffith of Griffith Company, a past president of AGC of California. There was federal money in this project, which meant Herzog – conveniently the lowest bidder – would need a California license in order to be considered. The problem? Approval can be a timely process, and the second bidder was angling to have Herzog eliminated from contention for lack thereof.

Enter Griffith.

“Bill called him and asked for help, and George went to the state license board, which had AGC members on it, and asked for our application to be expedited. The request was granted. I went to California and took the test.” The best news of all, he jokes, is that he passed.

“We could easily have lost the project,” says Landes, “but because of the relationship Bill had built with fellow AGC members in California we were able to get things done faster … and this project started us on a path to becoming one of the biggest transit contractors in the United States.”

Herzog still does business with Griffith Construction today.

NEVER STOP GROWING
There is new blood to be had, and Landes wants it in AGC.

“The average age of a construction worker, a tradesman, is over 50 years old,” he points out emphatically. “One of our industry’s biggest challenges is workforce development. Take a hard look at that and you’ll see we’ve lost an entire generation that decided it didn’t see a future in the construction industry – and there is a tremendous future here!”

The importance of cultivating new talent, he says, and drawing them in is not something to be underestimated; Landes believes it should be one of AGC’s prime directives moving forward.

Diederich remembers well his first meeting with Landes more than 20 years ago. “We had a marvelous discussion about AGC,” he says fondly. “All that we had done and all the people we had met.” He believes Landes will be a charismatic leader, inclusive with members and persuasive with legislators. “And many of our members are cross-divisional,” Diederich points out. “We welcomed him as part of the Highway and Transportation Division when he’d already chaired the Federal Division, and so Al will be a great leader in that regard.”

In fact, Diederich says, it was Landes who in part influenced the addition of the word “transportation” to the committee’s name. “There were quite a few long-term members who weren’t comfortable with that, but with Al’s leadership within the rail committee of the Highway Division, he was able to effectively make the case for change.”

He believes Landes will be a careful, thoughtful leader, and echoes his enthusiasm for his chosen theme.

“It’s great because there are so many competing associations looking for dues, revenue and member participation. Contractors have to choose where they’re going to spend their resources. And AGC has a long, successful history, a legacy of being an important resource to contractor members and all those from the supplier side.”

Landes looks forward to taking the reins, but with a very respectful nod to the people who put him in the saddle.

“[When I become president] in March, I’ll be looking at a lot of people I’ve known a lot of years. I can tell stories about every one of them and how each relationship benefitted Herzog tremendously… So, why AGC? You add in the advocacy, the education and these relationships and what value do they have – an organization that can provide all that for you. I don’t know how to put a number on it. It’s priceless.”