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Tue March 19, 2013 - Southeast Edition
Mike Flaherty isn’t afraid of starting over.
When the national economy went into the tank — and his real estate development business went with it — Flaherty had to find something new. And some place new.
So he went from St. Louis to New Orleans and started a demolition company, jumping in on the fast-rising rebuilding effort in that city following Hurricane Katrina. And then, when he discovered that crushed concrete dealers were charging exorbitant prices for their product, he launched another start-up — this time with a crushing operation along the Industrial Canal.
In two years, he has grown his Central Rock Corp. into a $10 million venture, crushing 8 million tons of concrete per year. He employs 20 people. But you won’t hear Flaherty brag.
“We got lucky,” he said. “We were at the right place at the right time, and we did the right thing.”
Recently, Flaherty has embarked on yet another do-over. He’s in the process of changing out his entire fleet of heavy equipment, which includes nine machines that range from wheel loaders to excavators. He’s picked Volvo for this latest revival, which is a big endeavor in itself. But Flaherty said his old brand can’t compare with Volvo.
“The price of parts was competitive. It was cheaper than the competition. Volvo Finance had good rates. It seemed like we would get great service from the dealer,” Flaherty said. “After the first machine, I realized the fuel consumption was much better. My goal is by next year at this time to have a minimum of nine Volvos and [nothing else].”
The Big Hit
Things were going great for Flaherty until the real estate bust began about five years ago. He was working on a condominium development in St. Louis. But all of a sudden, condo financing was shut off.
The pipeline of buyers dried up in a hurry.
“We took a big hit,” Flaherty said.
The question then became: What next? Flaherty found the answer when he went to visit friends in New Orleans following the crushing blow that city took from Hurricane Katrina. He visited the city nine months after the storm. The vestiges of Katrina remained.
“It was a wreck,” Flaherty said of the city. “No streetlights. No signs. Half the city didn’t have electricity.”
The opportunity was in demolition. Thousands of structures still needed to be torn down, and vast amounts of infrastructure needed to be replaced. Flaherty had plenty of construction experience. As a developer, he self-performed a lot of work. So he brought the two pieces of equipment that he had on hand to New Orleans and went to work.
“Just gradually grew the company,” he said. “Then we started doing site work.”
Undercutting the Competition
But then he found it difficult to deal with companies that were selling recycled concrete. The prices were high, perhaps twice what you would find in other markets.
So Flaherty leased a 17-acre site along the Industrial Canal — right next door to the biggest dealer of crushed concrete in the city — and he began his own operation. He set his prices a couple of bucks less per ton than his competitors.
“We undercut the whole market,” he said.
Pretty soon, the market took notice. Flaherty’s business began to grow in a hurry. In two years, he was operating 24 hours a day, seven days a week. Only three days off in a year.
“Work hard and treat people right. It works every time,” he said.
But an operation of that size relies heavily on its equipment. Concrete comes into Flaherty’s site in large chunks. An excavator with a multi-processor attachment munches it into smaller pieces, no larger than 3-ft. sections. A wheel loader then moves it over near the company’s crusher, where another excavator loads it. After it is crushed, the concrete is loaded onto trucks and hauled out to job sites for reuse. Flaherty has his own fleet of 14 trucks — all but two of them are Mack trucks, which are manufactured within the same Volvo family of companies.
But Flaherty eventually got dissatisfied with his choice of equipment. The cost for parts was high. And he wasn’t getting the service he wanted. But Volvo — sold by Rodney Guggenheim of New Orleans’ Scott Equipment — had something different to offer.
The change came when Flaherty lost one of his excavators in the bottom of a retention pond he was digging out to improve the drainage on his site. His old dealer said it would take a couple of months to get a replacement. Guggenheim and Scott Equipment got him a new Volvo EC360CL by the next day.
That’s when Flaherty discovered the fuel economy of Volvo. “We took and used that Volvo EC360 on the same job the [competing machine] was doing, feeding the crusher. We were saving about 50 gallons in fuel a day and getting the same production,” Flaherty said. Over the course of a month, that adds up: “It makes the payment,” he said.
In the less than a year since Flaherty purchased his first machine, he’s already picked up another Volvo EC360CL, along with a Volvo EC240CL. He also recently took delivery of a Volvo L220G wheel loader and a Volvo EC460CL excavator.
Jose Rocha, who operates one of Flaherty’s Volvo EC360C excavators, has been running heavy equipment for 15 years now. His job is to cut up large chunks of concrete into smaller pieces before they are loaded into Central Rock’s crusher. He’s got nothing he could complain about from the Volvo machine.
“It mashes all that concrete up really well. It pulverizes it and does everything we need to do to get it done,” Rocha said. “It’s real smooth.”
One of the great things about his Volvo machine, Flaherty said, is the durability.
“We’ve got 2,200 hours on our EC360 — the first one we bought — and we have not replaced an O-ring. It’s an amazing machine,” he said.
But there are some other basics that he really likes about his new machines.
“It really boils down to fuel consumption, dealer service and the availability of parts. If you’ve got those three things, you can sell as many machines as you want.”