Plote President Attributes 50 Years of Success to Founders

Thu August 28, 2014 - Midwest Edition
Giles Lambertson

(L-R): Dave, Jan, Ray, and Dan Plote.
(L-R): Dave, Jan, Ray, and Dan Plote.
(L-R): Dave, Jan, Ray, and Dan Plote. The company workforce has kept pace, growing from a handful in 1964 to more than 600 during a typical construction season. With the exception of the foray into North Dakota oilfield country, all this Plote Construction activity is in Illinois. In 1964 Ray and his wife Jan Plote founded what is now known as Plote Construction Inc. Ray Plote started a small excavating company with just three employees, working at another machine company during the day just to make his own payroll. The company has reached the 50-year mark without sacrificing the twin principles of operating sustainably and responsibly. This can be seen in the Beverly Materials division, which is heavily involved in recycling used materials. Dan Plote, president of Plote Construction Inc., has continued to fold construction services into the company to build out an integrated portfolio. (L-R): Dan Plote, Myles Plote, Ray Plote and Dave Plote. Company work is regularly cited as exceptional by state transportation, highway association, and industry officials. The company regularly collects year-end “contractor of the year” awards for superior work on airports, roads, bridges, and mun Project engineers and supervisors oversee the many pieces of a job contracted by Plote Construction. By and large, these jobs are transportation-related, such as highway, airport, and railroad infrastructure.


The headquarters of Plote Construction Inc. hugs the north side of Jane Addams Memorial Highway, a leg of I-90 some 30 mi. west of downtown Chicago. Overlooking a Chicagoland tollway is a perfect setting for Plote’s executive offices because highways have been good for the company.

The Hoffman Estates property has been in the Plote family since 1966, some 10 years after the Northwest Tollway (renamed for Addams in 2007) was built adjacent to it. The era’s expansion of the nation’s highway system through the northwest suburbs of Chicago thus crossed paths with Ray Plote. The rest is company history.

Dan Plote, president of Plote Construction Inc., said it was “coincidental” that his father and mother were living in the path of the western drift of The Windy City. “Propitious” might better describe it, for Ray and Jan Plote were in the right place at the right time and recognized a business opportunity when they saw it.

Getting Started

The couple each grew up in a rural area 10 mi. east of today’s headquarters building. After high school, Ray Plote left his father’s farm to move dirt in the area with dozers, scrapers and other pieces of heavy equipment. On the side, he hired three helpers and started an excavation and demolition company. Four years later — make that 50 years ago — he and his wife went all in and formed Plote Construction.

Plote began contracting work running a 50-hp Caterpillar 933 track loader. He steadily built a family-run company that today operates 300 pieces of heavy equipment — still predominately Cat — along with a fleet of heavy trucks, numerous crushers, and five asphalt and two concrete plants. In all, some 600 pieces of equipment rumble and roll from Plote equipment yards in 2014.

The company workforce has kept pace, growing from a handful in 1964 to more than 600 during a typical construction season. Employees are spread among 10 divisions that range from residential development and commercial properties to quarried materials, and asphalt and concrete plants — as well as satellite aggregate and construction operations in the fracking oil fields of North Dakota.

“The foundation of the family businesses is Plote Construction,” Dan Plote said of all this diversification. “The real estate division is here today because of the construction division. Obviously one division works with the other on occasion, but construction is still the foundation and main business, by far.” He estimates 85 percent of business volume is generated by construction activity.

The various construction industry enterprises come together in what Plote calls “a complete package — soup to nuts. We can grade, do the utilities, supply the aggregate, pave it, and have our construction management team manage the entire process from design to completion.”

Calculated Expansion

This vertical integration of Plote’s construction industry components is a competitive asset for the company, Dan Plote said, and stems from early decisions made by his father. As a contractor, Ray Plote quickly grew restive about buying gravel from local quarries for trucking to customers.

“He wanted to be his own best gravel customer,” Dan Plote said. So five years into his business plan, Ray Plote bought a gravel pit on Beverly Road in Hoffman Estates and turned it into Beverly Materials. It now is the main office for an aggregates operation that most recently added a limestone quarry in Belvidere.

This pattern of developing downline divisions continued as Plote Construction moved from exclusively moving dirt to becoming a full-service construction contractor. “He was tired of paying an asphalt paver to pave after he had graded a project, and of hiring concrete pavers, so he started his own asphalt company and then we bought out a concrete paving company. We eventually expanded both of those to meet the needs of the growing 1970s, 80s and 90s.”

Dan Plote has continued to fold construction services into the company to build out an integrated portfolio. “The more business you can keep inhouse, the better off you are. And the greater the reliability as well, because you are relying upon yourself to supply you. You’re not depending on third-party suppliers.”

Today Plote Construction enjoys what Dan Plote calls “a steady, collective growth of all divisions” of the construction company. He describes the volume of work in off-the-cuff terms: “We are probably moving several million cubic yards of dirt a year, producing a couple million tons of aggregate a year, several million tons of asphalt, and 200,000 cubic yards of concrete.”

With the exception of the foray into North Dakota oilfield country, all this Plote Construction activity is in Illinois. Becoming a regional company is not a company goal, said the president. “We don’t have a lot of aspiration to travel. We want to stay local.”

The mix and range of services shifts with the market. Demolition was among the first services Ray Plote offered customers, but survives in today’s company on a smaller scale, mostly because it has become a more specialized work. Whereas municipal snow removal from parking lots and streets — another early Plote Construction service — continues to keep Plote wheel loaders and bigger trucks busy in winter months when heavy equipment generally is less able to earn its keep.

Company work is regularly cited as exceptional by state transportation, highway association, and industry officials. The company regularly collects year-end “contractor of the year” awards for superior work on airports, roads, bridges, and municipal streets, as well as recognition in such specific areas as effective signage and controlling of traffic through work areas.

“We have helped rebuild all the freeways and interstates in the northern Chicagoland area and received numerous awards,” Dan Plote said. “We appreciate the recognition, but we are just out to do a good job and build the best road we can. The rewards are a collateral benefit.”

Management

Expertise

A major addition to the company’s resume of services came 15 years ago at Dan Plote’s urging. The future company president grew up in the business, sweeping floors in the company shop at age 10 and operating company equipment in his junior high and high school years. After two years at Lakeland Community College, Dan returned to Plote Construction to work in the field, where he saw the need for more thorough management.

Project management as a stand-alone function goes back more than a century when it was utilized to oversee large, complicated public-sector projects. Not until the 1990s did it begin to be applied to smaller scale construction situations, due to increasing utilization of software applications by companies.

Dan Plote proceeded to structure a “full-blown, self-sufficient” construction management group. “It was designed to manage our own projects as well as those of other customers. It was a level of management demanded by customers. The modern scope of the work, the magnitude of scheduling and quality control, requires us to fully control management of a project.”

Project management services today are an increasing part of Plote business. Dan Plote clearly looks back on its creation as a turning point in his relationship with the family firm. “I initiated it (the construction management group). That probably is when I really showed up personally.” He became the firm’s president in 2005.

Project engineers and supervisors oversee the many pieces of a job contracted by Plote Construction. By and large, these jobs are transportation-related, such as highway, airport, and railroad infrastructure. But Plote project managers also contract with other contractors to keep tabs on such projects as scratching out large-scale subdivisions from Illinois farm land or turning dozens of acres into a shopping center.

The work of managing turned into a coping exercise with the onset of the recession that struck the construction industry particularly hard. Plote had sufficient work in the pipeline to ward off the early effects of the housing collapse and economic downturn. But by 2010, those carryover contracts were completed and Plote Construction executives and managers faced a crisis.

“The market tanked, which reduced funding for both public and private work,” Dan Plote said. “We definitely had to make some adjustments, to right-size the company for the amount of available work. Our business model didn’t change, but our workforce shrank 25 percent.”

The 2009 collapse wasn’t the only economic challenge the company has faced over the last half century, but unlike earlier recessions, the impact of the recent one has lingered. “There were one or two just-as-bad economic downturns in my father’s experience but the company never before experienced this longevity in a downturn. Maybe a one-year or 18-month downturn, but then there would be a recovery. Today we might have stability, but we have not recovered.”

The company workforce has grown to where it is down perhaps 10 percent from its highpoint, but Plote can’t predict when recovery will be complete. He cites Washington gridlock about how to establish a new revenue stream to support restoring what he calls “an overloaded, stressed, and worn out infrastructure system.”

He is not hopeful the situation will be resolved soon. “I would love to think so but I don’t know if anything will be settled until after the midterm elections. We have little leadership to support our country, our economy, and our transportation system.”

Coping with a struggling economy means Plote Construction executives are “planning for rainy days,” managing company debt and being conscious of economic forecasts. Plote adds that none of this is made any easier by the lack of political leadership in the nation’s capital.

“The uncertainty the country is in and continues to be in doesn’t support a businessman’s idea of how to plan ahead,” he said. “There is just so much uncertainty, not only in our industry but in all industries.”

The industry struggle to maintain a skilled workforce is a challenge that was aggravated by the recession. “There is no doubt the industry lost tradesmen and skilled workers during the downturn,” Plote said. Plote Construction addresses the issue by trying to be a “solid company that provides stability and comfort employees” and by operating an internship program for college students and recent graduates in a bid to “homegrow our own management.”

The company supports apprenticeship programs for skilled workers. Dan Plote said the trades union “is supportive in trying to refurbish the trades, but unfortunately the next generation of youth isn’t overly interested in our industry. We have challenges to get kids away from computer monitors and go outside to be in the elements, get dirty, and work in an atmosphere that sometimes is less than comfortable.”

Culture and

Community

The company has reached the 50-year mark without sacrificing the twin principles of operating sustainably and responsibly. This can be seen in the Beverly Materials division, which is heavily involved in recycling used materials. This includes reducing old asphalt and concrete pavement and sub-base aggregate into recycled aggregate. Recycled asphalt shingles are a key part of Allied Asphalt’s production, which is located in Franklin Park south of O’Hare International Airport and four other locations

“In doing this, we are being good stewards and good cost managers,” Plote says. “We don’t have to dig a big hole in the ground for the old pavement. It is all a part of the sustainability that is becoming a more conscious piece of how we do business.”

The company also is supportive of community organizations and the general community. An example of the latter is a home that was built and given away to a disabled veteran of the Iraqi war. The project came about after the company found itself with a residential lot left over from development of Hillside Town Center. The family brainstormed and decided to build the house from donated materials, fixtures and appliances. The project came to fruition after 18 months of soliciting materials and construction. A multiple amputec war veteran was selected by a veterans organization and moved in.

Dan Plote attributes to parents Ray and Jan the company’s 50 successful years. They were partners in starting and developing the firm, he said, and Plote Construction continues to reflect the principles they imparted.

“My parents have been very ethical and very conscientious and very persistent in taking on all the challenges of ownership of a company. They have been persistent and passionate about building things and taken personal pride in the building. They looked forward to challenges and had the drive to accomplish things.”

He said his parents are, in turn, supportive of current leadership of the family company. They are sympathetic to the wrestle that he and other executives have today with additional levels of bureaucracy, regulations, and liability.

How the business climate will evolve over the next few decades is of continuing interest to the family: A third generation of the Plote family is in the wings. One daughter of Dan Plote is working in the office and a son is in his third year of college studying construction management.