UNITED STATES: Due diligence and collaboration create a winning formula for this family business
by John Krantz
As soon as this job came open for bid, I had the feeling that we had to win it. I went around the office and told everyone: ‘This job is ours’.” It was a bold declaration. The $69 million (€60.56m), 726-acre (293.80ha) site-work project at the future home of the first US-based Volvo Cars plant was far bigger than any Rick Mixson’s Landmark Construction Company had completed in its 50-year history. The bid was open to every other earth-moving contractor in the south-eastern United States.
Despite this, Mixson was intent on winning the job. History shows that when the president of Landmark sets his sights on a job, his team is a force to be reckoned with – and one that other companies do not want to bid against. Behind this determination, and ultimately his company’s success, is a driving force: family.
Founded in 1965 by Mixson’s parents, Fredrick and Ann, the company has grown from humble beginnings as a small grading contractor to one of South Carolina’s most successful utility, concrete and site-work contractors. With Rick and his sister, Cindy, at the helm today, the company has navigated tough economic conditions and emerged stronger. They attribute this steadfastness to a critical financial eye, a thorough approach to job estimating and a family mentality that extends beyond blood to a core group of long-term business partners.
“We look at things differently since the recession,” says Cindy. As vice president of the company, she plays a role more typically associated with a CFO title. “It’s changed the way we acquire equipment, the way we look at jobs and who we involve in the process.”
Based on the initial public information, the Landmark team was expecting the job to be in the $30 million (€26.33m) range – still a big step up from a typical $10 million (€8.77m) project. After a pre-bid meeting in which participants were able to ask questions of the project owners and their engineering team, it turned out to be much more.
“The meeting was open to any company capable of getting a big enough bond to complete the project,” says Rick. “Eight or so serious contenders showed up, and by the end of the meeting, half of them had bowed out.”
Rick left the meeting undeterred and the Landmark team sprang into action, dedicating 10 full-time team members to the estimating process for the next month.
“First, we needed to look at the site and determine exactly what we were up against in terms of soil conditions – what were the unknowns, and what potential contingency plans would need to be in place,” says Rick. “Second, we needed to determine how we would build up our fleet to get the job done on time and budget.”
Critical to these investigations were some of Landmark’s long-term partners.
The combination of subtropical climate, high-clay-content soil and lowland topography in Charleston, South Carolina, is a perfect storm for unstable soil – a key concern for Landmark going into the bid.
“We spent weeks digging test holes and collaborating with soil engineers to determine a game plan for stabilizing the soil. We determined option one would be to move the dirt, dry it out, compact it and bring it up to elevation. Option two was to mix cement into the soil to stabilize it. In the end, we had to plan for both.”
Next on the checklist was equipment. The first place they turned was ASC Construction Equipment, their long-time Volvo Construction Equipment dealer.
Landmark and ASC have worked together for 20 years, and building a fleet to meet the demands of a specific Landmark job was nothing new for either of them. But this time around, the stakes were incredibly high.
“A job this size can make or break you as a business,” says Cindy. “We had to make sure the fleet was perfectly suited to the work and that the financing structure allowed us to be both competitive and flexible.”
ASC started the process by enlisting the help of Volvo CE. “Based on project specifications and Landmark’s plan of attack, Volvo CE used site-simulation software to analyze the most efficient sizing and number of machines, taking into account their production capacity and speed,” says Mitch Bailey at ASC. “Together, we ran through a number of different scenarios and, ultimately, we came away with the most efficient combination: we knew they’d need 30 Volvo machines in total.”
The largest job in Landmark’s history would not only max out their current Volvo fleet, but would require the fleet to nearly double in size with the addition of 16 new machines. Included in the necessary heavyweights were Volvo EC480E excavators and Volvo A40G articulated haulers for the heavy load-and-haul work, as well as Volvo EC380E excavators for completing ponds, storm drainage and finishing work. Given the one-year project time line, a significant fleet expansion did pose some risk.
“The question naturally became: ‘What do we do with all these machines when the job ends?’” says Cindy. “From a financing perspective, we needed something that came with all the benefits of leasing over renting, but allowed us flexibility to scale back and relieve our cost burdens when the job was done.”
In search of a solution, they turned to their equipment-financing partner of nearly 20 years, Volvo Financial Services (VFS).
“We were able to develop a flexible leasing program for Landmark that was customized to this specific job,” says Larry Carroll, regional sales manager at VFS. “It’s structured like a traditional lease, but offers an early walkaway option at 12 months, so they’re given the choice to either return the machine at the end of the job, continue on with a traditional lease or purchase the machine at fair market value – whatever makes the most sense for their workload a year down the road.”
With due diligence complete, and a fleet make-up and financing structure determined, it was time to make the leap of faith. “$69 million,” says Rick. “We put it out there and waited on the edge of our seats.”
Having initially received word that another firm was the lowest bidder, it turned out that the terms of that bid did not meet the project owner’s needs.
“All of a sudden, we started getting phone calls,” says Rick. “I knew it came down to the fact that we were so thorough in our due diligence. We did all the upfront work to develop contingency plans, which solidified confidence in our team.”
For Cindy, the news brought a mix of emotions. “My immediate reaction was to celebrate. We were really excited,” says Cindy. “Then it hits you – okay, now we have to get this job done, and the clock is ticking. I’d be lying if I said I wasn’t a little nervous.”
The decision by Volvo Cars to build a production facility in South Carolina was spurred in large part by a surging demand in the United States. An aggressive project schedule was put in place – with initial land clearing starting in July 2015, Volvo Cars is aiming for the first automobile to roll off the assembly line by late 2018. When complete, the factory will be capable of producing 100,000 cars per year, creating 2,000 jobs initially. The impact of the plant is estimated at approximately $4.8 billion (€4.2b) in annual economic output.
Needless to say, there is a lot riding on this project, not only for Volvo Cars and the surrounding community, but also for Landmark. “We have no option but to stay on schedule – our livelihoods are on the line,” says Rick.
Running in five phases, the job entails transforming the sprawling, heavily wooded site into a ready-made, buildable property, complete with roads, ponds, elevated building pads and storm-water infrastructure. Doing so requires moving a lot of dirt in record time.
“In peak production, we’re moving up to 100,000 cubic yards (76.45m3) of soil during a six-day working week,” says Mark Mitchum, project superintendent at Landmark. “That’s the schedule we have to stick to – rain or shine.”
And 2015 brought a lot more rain than shine. The year marked one of the wettest on record for the region – something that could have incurred delays from a lesser contractor. Fortunately, between equipment and contingency plans, Landmark stood ready to meet the challenge.
“Often, there’s not enough time to dry the soil in between the rain, so we’re using a Volvo A25 truck equipped with a spreader to mix cement into the soil before we compact it with our Volvo rollers,” says Mitchum. “The Volvo A40s are helping keep us on schedule during heavy rain. With their light footprint, they never bog down in the mud and we can run them at full capacity.”
Of course, dirt can only be moved if the equipment is moving, which is why Landmark and ASC developed a customized service agreement specific to the job.
“They actually set up a canopy on site, stocked with all the common replacement parts, and they’ve had a full-time mechanic on call for us,” says Mitchum. “They’ve also taken care of all planned service intervals on evenings and weekends, so that it doesn’t disrupt our operations. The service has been impeccable.”
As the job nears completion, the Mixson siblings are aware of the impact this high-profile project will have on their business – and what it has taken to get there. “It has really put the family business on the map. General contractors and our customers will look at us differently now,” says Rick.
It has changed how Landmark looks at itself, too. “Some might look at such a big job and think that it’s a lot of risk for the business, but if you go in identifying what all those risks are, and you prepare for them, there’s really no reason we can’t tackle a huge job like this.”
This landmark achievement opens a new chapter for the business – one that will undoubtedly continue to be driven by the family mentality.
“It takes a team,” says Cindy. “We make a good team at Landmark, but it can’t be done without our team of partners. We consider Volvo, VFS and ASC our extended family.”