PM Profile: MCAA president wantsto move forward with labor to improve market share
Michael Cables sees construction activity increasing in health care and other sectors.
|Kinetics Executive Vice President Michael Cables|
Plumbing & Mechanical last month interviewed Kinetics Executive Vice President Michael Cables, who is the incoming president of the Mechanical Contractors Association of America. He began his career in the mechanical contracting industry as an apprentice in Tucson, Ariz., before moving in 1984 to Kinetics as an estimator. In more than 28 years at Kinetics, Cables has run the company’s domestic operations, labor relations, preconstruction, safety, and quality assurance and control. He also has worked in Kinetics operations in Mexico, Costa Rica, Brazil and Puerto Rico.
Kinetics provides high purity process and mechanical solutions to the electronics, biopharmaceutical and solar industries as well as full mechanical services for data centers and general industries.
PM: How will your international business experience help you as MCAA president?
MC: Kinetics is a worldwide entity. In addition to the U.S., we have operations in Europe, Asia, India, the Middle East and South America. I’ve spent a considerable amount of time in Latin America. As the world’s economy continues to move toward a global model, we’re seeing international experience as instrumental in dealing with a number of multinational clients. They have global operations, and my understanding of their business overseas is helpful in supporting MCAA members’ dealings with these multinational entities.
In addition, the experience provides me a view of various business practices and project delivery models. The business model point is pertinent because we’re dealing with companies that are either from overseas or operating overseas. It’s important to understand the business model is not necessarily the same.
A lot of the principles and functionalities are the same but the model is different. One good example is the fact that in most other countries, it is fair to say that there is a down payment or arrangement on the front end of contracts where in the U.S. that is not the norm.
It is challenging to operate internationally. Laws and rules are different. Specifically, hiring personnel for projects and moving expats to other countries to work has its set of challenges.
PM: Industry consultant FMI named prefabrication as a top trend for trade contractors in 2013. Do you see prefabrication increasing among MCAA members?
MC:The short answer is yes. Many MCAA members have found it beneficial to move toward developing prefabrication capabilities. As the construction markets see signs of recovery, it is essential for trade contractors to look toward means to increase productivity and be competitive. Owners, construction managers and general contractors continue to push more responsibilities down to the trade contractors and at the same time are demanding lower pricing. As a result, to be competitive, trade contractors must increase productivity.
One key way to improve productivity is to prefabricate portions of the work. In the prefabrication model, the trade contractor has the ability to better control productivity and safety by performing large portions of the work in a controlled environment with personnel that are known to the contractor. This will limit the amount of work needed in the field, allowing for less schedule conflict and overall lower project delivery cost.
At the end of May, I am going to become the chairman of the Pipe Fabrication Institute, which is the association for fabricators and negotiates the national fabrication agreements with the UA. We’re having our 100th-year anniversary meeting May 29 to June 4 in Pittsburgh. MCAA and PFI are associate members of each other’s association. Many of the same contractors and companies are part of both organizations.
PM: Where do you see opportunities for MCAA members in commercial/industrial markets in 2013?
MC: I’m seeing signs of improvement in several areas. With the election behind us, several companies are moving forward with plans that previously had been on hold. The health-care market is continuing to grow. With various mandates from the health-care reform initiative, this market should see exponential growth in hospitals, labs and medical office buildings. Related to this is the biopharmaceutical market that will need to produce the medicines that will support health-care expansion.
Other markets where we’ll see opportunities, I believe, are manufacturing, transportation, housing, energy, data centers and green building. By and large, we’re just seeing a lot more activity on the front end and are bidding more projects than we have recently. Time will tell.
PM: How can MCAA members work with their partners in labor to increase their local market share?
MC: Great question. The first issue to understand is that times have changed. We are now approaching negotiations with our labor partners with a win/win mindset. The more confrontational approaches of the past, I hope, are behind us. The real competition is with the open shop. It is the responsibility of both parties to look for ways to best meet the needs of the owners. Over the last 10 years, many in corporate America had become solely focused on price as they looked to cut costs on every level. They were often willing to make concessions in quality and safety.
This has caused a significant decrease in market share outside the largest metropolitan areas. As the landscape has changed, we have seen many of these open-shop companies start to compete in the larger metropolitan areas. As a result, it is through working together that we will either succeed or fail. I’m confident that we can succeed.
PM: As a graduate of MCAA’s Advanced Leadership Institute, why do you believe this type of education is important for MCAA members?
MC: MCAA is the only organization, which I know of, that is offering entrepreneurial and leadership training at such a senior executive level. What sets it apart is the quality of the program and the development of the case studies by educators and contractors who really understand what it takes to succeed in our business. The small interactive class environment is the key. The interaction with other MCAA members from various backgrounds and business models is invaluable.
Kinetics is fortunate to have several ALI graduates among its employees. Attendees can fill in any gaps in their experience. I think this sets a very successful contractor up to be more successful. Personally, I was honored to be selected by Kinetics to attend. What I got out of it was very rewarding. The relationships that resulted from my attending ALI are life-long. I highly recommend to anyone who’s on the fence about attending to take the chance. It’s a great experience.
PM: What has Kinetics learned about using BIM that would be helpful to other mechanical contractors?
MC: Kinetics has learned that BIM means different things to different groups, three in particular. The owners see BIM as a desired product and are requiring it on many projects because it enables them to better visualize the work and, in the end, they expect to receive a lower overall cost associated with project delivery. CMs and GCs see it as a necessary tool based upon the owners’ requirements and use it to coordinate work. However, they do not often understand the level of effort necessary to coordinate the work or how change impacts the project. There’s an education process that goes along with that.
Lastly, the trade contractors see it as a tool by which they can coordinate and schedule the job. However, the BIM model that is necessary to satisfy the trade contractors is significantly more complicated than the BIM model needed by the owner to visualize their project in 3D and the BIM model needed for the CM or GC to believe the work has been fully coordinated. In the end, it is often the mechanical contractor who becomes the lead on the BIM project. Outside the structural elements of the building, the mechanical systems often are the most critical for spatial allocation.
The progress that’s been made with BIM over the last four years has been significant. But it is an area that needs to be fully understood by the mechanical contractor or a good job can quickly become a costly learning experience.
I would add that MCAA, NECA and SMACNA have recently worked together as a team to develop a definition for spatial coordination, which has been adopted as part of the national BIM standard. We feel that was a very large step in the right direction in respect to dealing with spatial coordination that often would turn into costly redesign efforts for the mechanical contractor.
PM: What are the benefits to younger contractors of belonging to MCAA?
MC: Younger contractors will quickly find one of the most important benefits of membership in MCAA is the opportunity to network with other contractors from around the country. Being able to discuss your company with contractors you don’t compete against is a huge benefit and a key to your success as a contractor, and it is free.
Additionally, the access to several training courses and best practices provides the tools that enable success. The educational and safety products and programs that the MCAA offers are second-to-none. These are available to contractors who are affiliated with MCAA, and they provide a wealth of information and knowledge for them. People who are successful are the people who take advantage of the access to that kind of experience and information. I think it’s great. I certainly owe my success to a lot of that.
PM: What do you hope to accomplish as MCAA president?
MC: As both an MCAA and a United Association member, I hope to further the strategic partnership between the MCAA and the UA for the mutual benefit of both parties. We’re in a time right now when our working together is better than I can ever remember it and we need to leverage that and keep moving forward. Also, I’m the management co-chair for the International Training Fund, which is the group that helps to fund training initiatives for the craftsmen whom we employ. I taught apprenticeship school for nine years and really have always felt the training aspect is what separates our contractors from the other guys.
I’m very proud to be associated with the ITF and initiatives such as the Veterans in Piping program where we’re taking military folks and teaching them to weld. We’re putting them into our apprenticeship programs and our locals. Those kinds of things make a difference. I feel the same way about training our staff people, our young project engineers and project managers. MCAA is an education association and I’m honored to be able to lead the organization this coming year.
PM: If you had only one message to give to your fellow contractors, what would it be?
MC: The message would be to get involved with your local and national associations. The contractors who have gotten actively involved have found that their investment of time and energy provides huge returns. The benefits received extend over one’s entire career. Therefore, get involved; it’s well worth the time. I can think of no better way to enhance your ability to be successful than to surround yourself with people you can glean experience from and learn from.