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Elderlee Inc. Forges Ahead With Clockwork Precision

Fri August 12, 2005 - Northeast Edition
CEG



Elderlee Inc. has been associated with the New York State AGC Chapter since 1941. And although Elderlee is classified as a prime contractor, a major portion of its work includes subcontracting as well as material sales.

It didn’t start out that way. Elderlee Inc., began as L. S. Lee and Son, a proprietorship that was owned by Louise Stockton Lee and her son, Cebern Lee. Mr. Stockton, Cebern Lee’s grandfather, originally started manufacturing concrete pipe in Montour Falls near Watkins Glen.

When his grandfather died, Cebern, who at the time was of high school age, and his mother, decided in 1920 to move the pipe operation to Oaks Corners because they wanted to begin manufacturing New York State accepted concrete products. New York required special approved aggregates, such as sand and stone, and they wanted to move closer to a source. In Oaks Corners there was a sand pit and limestone quarry that were both state approved.

One of the concrete products the company manufactured was a triangular concrete post that was used as a guide post along the shoulders of the road. The department, going back to when it was called the Department of Public Works, decided to put a hole in the concrete post, insert an eyebolt and pass a cable through the eye. That was the first guide railing used in the State of New York. Lee felt L. S. Lee and Son could install them as well as manufacture them and that was his initial start in the guide railing business.

Following the end of World War II, Cebern Lee was invited to be a judge at a sailing Olympics. Another judge at that event was George Elder, a sailboat manufacturer from New Jersey. Lee and Elder became good friends and decided to form a company to build wooden sailboats in Oaks Corners.

By combining the two last names, they started making sailboats under the name of Elderlee. In addition, they made baseball bats, rolling pins, oars, paddles and other kinds of wooden products.

They were not in the sailboat business too many years when the Penn Yan boat company started manufacturing sailboats out of fiberglass. The sailboat business, which was the bulk of their business, faltered due to the advantages of fiberglass construction. Elderlee exited the market place and became a dormant corporation, leaving L. S. Lee and Son to continue on.

The massive highway building programs of the late 50s and 60s and early 70s provided the H. J. Williams Co. Inc., under the guidance of Bob Hirschman, an opportunity to sub-contract with L. S. Lee and Son for guide railing installations throughout Pennsylvania. This long term business relationship was the catalyst for the purchase of Elderlee Inc., and L. S. Lee and Son in 1973 from the estate of Cebern Lee.

With the decline of the heavy-highway construction market, H. J. Williams Co. Inc., was sold off and a new direction was chartered towards specialty contracting and manufacturing.

Today, the first thing you notice on a tour of Elderlee’s sign-manufacturing, galvanizing, steel-fabrication facility in Oaks Corners is the care with which everything is stacked and labeled; there’s a sense of clockwork precision that would do a watchmaker proud.

Just as there’s nothing haphazard in the layout of the sprawling, 65-acre plant operation, there’s nothing unplanned in the corporation’s growth. From its recent forays into the south to its marketing efforts in the commercial galvanizing business, Elderlee Inc. has a team of dedicated, experienced professionals who keep their eyes open for new markets, weigh their decisions carefully and pursue them fully.

It’s clear that the decision-makers at the firm know that a smooth process and precision timing are critical to a successful business.

And Elderlee Inc. is a successful business — although it’s actually two businesses, Elderlee Manufacturing and Elderlee Construction. Elderlee Construction not only operates out of New York but also has a division, located in Dunn, NC. Both operate as part of REH Holding Corp., as does Elderlee’s sister companies, L.S. Lee of York, PA, and Richmond, VA.

“REH” stands for Robert E. Hirschman, chairman of the board. His son-in-law, Basil A. Shorb III is chief executive officer and Basil’s brother William A. Shorb serves as president. Basil’s son Matthew is a vice president.

In New York State, Elderlee Manufacturing is run by Vice President Paul Strain, responsible for the steel fabrication, galvanizing, and the highway sign manufacturing operations. Vice President David DeJohn oversees the responsibilities of running Elderlee Construction operations for both New York and the Carolina’s and Vice President Bob Rook oversees the Estimating and Sales in New York.

“Elderlee Construction and Elderlee Manufacturing are truly separate entities; Elderlee Construction just happens to be our largest customer. What advantage construction has with manufacturing is the physical proximity,” said Strain. “We can control lead times and exactly what their needs are in a much more expedited manner, and load right on their truck for shipment.” That said, “We service all of our customers in the same way.” “I sell to Elderlee Construction just like I would to any other customer. And what Strain has to offer is a diverse, and growing line of products as well as the ability to take on specialty, made-to-order custom projects.”

Rook said, having access to an on-site manufacturer is particularly useful if an item gets added to a job. Late design changes such as special radius, increase in quantities, and new or added items to the contract, are often at the end of the project.

“Other contractors without the access to a manufacturer would have to go back to the manufacturer, often located in another state, and get materials made and shipped. We can a lot of times get that material shipped to the job site the next day,” he said.

While Elderlee Manufacturing supplies some of the items for Elderlee Construction’s jobs in the South, it concentrates on box beam guide rail for New York projects, turning out approximately 350,000 lineal ft. of box beam a year.

“We have the capabilities to do any of the custom jobs.”

Elderlee’s Steel Shop is currently working on a specialty bridge job for Kraemer & Sons on I-490 Troup Howell Bridge.

Last year, Elderlee fabricated the custom-made bridge and pedestrian railing for Crane-Hogan’s Stutson Street Bridge project in Rochester, as well as bridge railing for Pennsylvania and Maryland projects.

A walk through the fabricating facility showed all the high-tech equipment Elderlee has purchased to ensure that it can do the best, most accurate job of any project at the quickest pace.

“We are continually upgrading, asking ’how can we do it better?’,” said Strain.

The Elderlee Steel Shop is an American Institute of Steel Construction (AISC) certified manufacturer, which many states require. In 2004, New York State instituted a requirement that to supply overhead sign structures, a manufacturer had to be AISC certified, a certificate Elderlee had already held for two years.

“We were ahead of the game,” said Strain.

“We employ welders, who are certified to the state and to the type of welding they do,” he added. With the AISC certification comes certain conditions, including having a quality manager and a responsibility by every employee to perform quality checkoffs to make sure that the products are produced both to the state’s standards and to Elderlee’s standards.

“We pride ourselves that when we get a product out in the field that we are one of the best quality manufacturers of highway safety products out there today,” Strain said.

In the sign-making building, there are stacks of pre-cut aluminum sign blanks. There’s silk-screening and machines to adhere the pressure-sensitive 3M retro-reflective material to the aluminum. As well, there’s a talented team that can build anything from huge overhead signs for an airport to small street signs, one-time custom signs and anywhere in between. Elderlee keeps a huge stock of standard road signs ready to go out at a moment’s notice.

The sign manufacturing business in turn helps both the steel shop and the galvanizing operation because the firm also makes the steel slip-impact signposts that go with many of the signs.

“We can offer customers the signs and the posts and whatever else is needed all in one package.”

As with its other shops, the Elderlee galvanizing shop is a smooth, streamlined process.

At the front of the open building are large racks and an overhead crane; items to be galvanized are loaded onto custom designed racks. The steel items are dipped through a bath of heated sulfuric acid and water that burns off the impurities; then the steel is rinsed, dipped in flux, then dipped into 840-degree molten zinc before being quenched, cooled and taken off the racks.

The Elderlee galvanizing tank is 38.5 ft. long, 5 ft. wide and 6 ft. deep, holding 500,000 lbs. of molten zinc, making it one of the biggest in the state. It’s also one of the most modern, having been upgraded in the past few years to include a modern reclamation system for the sulfuric acid, among other items.

“What makes our operation so special,” said Strain, “is that we have the ability to manufacture several special pieces, galvanize them and have them out the door sometimes the next day. We have the ability to interrupt schedules for specials.”

He said that’s really helped the galvanizing facility take on commercial, non-highway industry work.

“It seems like everybody’s looking for quick turnaround times and we get a lot of repeat business because we can provide the turnaround time required.

“Our basic rule of thumb is we try to turn galvanizing around in a maximum of five to seven days; in a lot of cases it’s quicker than that.”

And, Elderlee Manufacturing carries a huge inventory of standard items to even further decrease wait time.

“Our value of inventory of standard products at any given time through the season will be between $3.5 million and $7 million,” said Strain.

“We tout service; and Elderlee manufacturing is probably one of the biggest parts of our service,” added DeJohn.

Another significant piece is DeJohn’s ability to manipulate 20 construction crews to service general contractors.

“Many, many times we’ve pulled crews off our prime job to service a subcontractor,” said DeJohn, adding that Elderlee Construction bids guiderail and sign work as both a general and a subcontractor.

Unfortunately New York State still lags far behind other states in the amount of prime guiderail it lets. That fact, combined with the short construction season and shrinking amount of work in the state, helped propel Elderlee Construction to open up shop in North Carolina. What Elderlee refers to as its “Southern Division,” run by DeJohn, now operates in Virginia, North and South Carolina, and Georgia from a 5-acre complex in Dunn, NC.

Additionally, Elderlee has begun bidding work in Florida and is hopeful that they’ll be working in that state soon.

“We’ve come very close,” said Rook, noting it just lost a $3-million prime job by less than 2 percent. “We’ll crack it one of these times.”

“When we first started out, we were sending people from New York down there,” said DeJohn. “As we picked up work, we started building crews and bought property, put in an office and hired a managing staff.”

The Elderlee Southern Division is now employing five guiderail crews and two sign crews.

Like most northern companies that have “gone south,” Elderlee has found both pros and cons about the locale. On the pro side, there’s a lot more work. For instance, Elderlee is currently a subcontractor on a $136-million job, of which it has approximately $5 million worth of work.

“When they let a guiderail job in the South, they’ll let it for 100,000 or 300,000 feet,” said Rook. “In New York, if you get a job that’s got more than 10,000 feet of guiderail, that’s an anomaly.”

Other advantages to working in the South include the widespread use of full electronic bidding, a process New York is still working on, as well as a much simplified system for change orders.

“Electronic bidding makes it so much simpler,” said Rook. “When we first started, we were down there three times a month bidding jobs and turning in bids,” that’s no longer the case now that everything can be turned in via computers.

Additionally, Elderlee has found that its New York work ethic has many fans down South, not only among other New York firms, like Tuscarora Construction, but also among many other local contractors.

“We were warned that as Yankees, we would never fit in,” said Rook, but “we’ve found just the opposite is true. First of all, when we’re bidding as a general contractor, we don’t have to appease anyone, just have the low bid. Second, a lot of the contractors down there are not actually from the state that they’re working in, they’re from all over the country.

“Of the subcontracting work we are currently performing, the general contractors are very pleased with the New York work ethic.”

Because the projects in the South can be so huge, Elderlee has found itself bidding as a sub for the same contractor in different states. The firm is just finishing work on a design-build job for a joint venture of Lane and Flatiron in Raleigh, NC, and has completed over $5 million worth of work on the project over three years.

It’s also working on another design-build job with APAC in Myrtle Beach, SC.

“With our sister company, L.S. Lee in the south, we have tremendous flexibility to man jobs; so we take on pretty big jobs,” added DeJohn.

The biggest difference between the North and the South is the actual guiderail systems used. In the South everything is heavy post blocked out corrugated beam. New York, of course, has box beam, cable, and corrugated-beam guiderail.

Rook said the firm tries to be helpful to designers and consultants who might want to tap into the firm’s institutional knowledge. He said in the interests of uniformity, Elderlee will try to steer a consultant to the state spec.

“We do work that is non-spec, but if you can put the standard DOT spec in there and still do the job the designer wants to do, that’s what we’ll recommend.”

Elderlee also is always willing to host people from NYSDOT on tours, and has hosted groups from most of the state’s 11 regions.

“We welcome any and all state people and consultants who want to come through and tour our plants, any time, just give us a week’s notice or so and we’ll be glad to accommodate anybody.”

All three vice presidents quickly note that neither Elderlee’s successes nor its reputation would be possible without the dedication of its talented employees.

“We have a lot of experience and that’s where the quality is,” said Strain. “Everyone is so familiar with the products that the quality is second nature.”

Just looking at the longevity of Elderlee as a whole, there are guys with 30-years service at the Manufacturing Plants; with the average length of service coming in at 15 to 20 years. The construction side has superintendents averaging 20 years of service; Rook has worked for Elderlee for 35 years and DeJohn for 32 years.

The experience and longevity of the installation crews also contributes to Elderlee’s excellent safety record, as does its comprehensive safety program. Each division has a safety coordinator and Elderlee has a corporate safety director. All employees go through the OSHA 10-hour course each year and for 2005 Elderlee sent all of its foremen and supervisors through the OSHA 30-hour course. The construction safety coordinator, Rebecca Cooley also sits on the AGC Safety Committee.

Also, Elderlee Inc. has a comprehensive drug and alcohol testing program.

And it all pays off; the firm has won New York State Chapter Safety Awards for many years. It’s also won regional safety awards, as well as safety awards from the Carolinas AGC Chapter.

“Everything we’ve put into the safety program has paid off for us,” said DeJohn.

He and Rook also feel the same way about what they put into the New York AGC.

“It continues to baffle me that a supplier or another subcontractor doing work in the highway industry doesn’t belong to the AGC; it doesn’t do them any good at all,” said Rook, who is not only the Region 6 director of the Chapter, but also has been a longtime member of the Membership Recruitment and Development Committee, a position he takes very seriously.

“If I’m talking to people who are new to the area or new to doing DOT work, one of the first things I’ll ask them is ’Are you an AGC member?’ If not, I’ll try to get them into the AGC.”

He said having access to AGC committee meetings and the Annual Meeting and other events really pays off.

“If there’s a job that we’re bidding that has nonguardrail items on it, I can call some of my friends in the business and while they may not be able to help us directly, they can usually lead us in the right direction, that’s where the relationship with AGC people really pays off.”

DeJohn said the corporate policy is to be involved in the AGC chapter of whatever state the firm has offices in, so Elderlee belongs to the Carolinas AGC as well as the Associated Pennsylvania Constructors.

Basil Shorb served as APC’s 38th president from 2001 to 2003, keeping up a long tradition of leading AGC Chapters, begun by Ernie Demetriades, who was the New York State Chapter President in 1983.

Rook also serves on the Insurance Task Force and DeJohn on the Chapter’s LRD (Elderlee is a union shop) as well as the Utility Sub Committee. Rook became involved with Executive Level Partnering when the steel escalation became an issue early last year.

Further, REH is a member of the American Road & Transportation Builders Association (ARTBA) and the American Traffic Safety Services Association (ATSSA). William Shorb currently serves as Vice Chairman of ATTSA’s Guard Rail Committee and Matthew Shorb serves on ARTBA’s Young Executive Leadership Council.

In 2004, Hirschman was named one of the ARTBA Transportation Development Foundation’s “Top 100 Private Sector Transportation Design & Construction Professionals of the 20th Century,” in recognition of his longstanding involvement in the highway construction industry.

In announcing the individuals, ARTBA-TDF Chairman Dave Kraemer said, “Collectively, the ’transportation construction industry titans’ named to the ARTBA list have helped build a better America.”

All in all, at the end of the day, Elderlee’s focus is in New York.

“Our success started in New York and our commitment to our friends and customers for quality, service and integrity remain our mission in New York.”

(This article appears courtesy of “Low Bidder” magazine.)