# Large Union Mechanical Contractors Going out of Business



## DUNBAR PLUMBING (Sep 11, 2008)

Found out last night through a business friend that one of the 3 biggest mechanical contractors that deal with large scale plumbing/hvac is set to go under before christmas.


They simply do not have the work, they was at 400 employees and they're at 88 now, being forced to work 4 day work weeks. 


They cannot bid competively and the only way they can get jobs is to win bids where they are loss leaders.


This guy spoke candidly about this to my buddy, stating there's absolutely no way he's going to the bench because that is hopeless at this point. 


What's so shocking is the company this economy is taking down, is 55 years old and was solid as a rock.



How would you think a supplier feels, being put in this position that 100's of thousands of inventory is leaving your hands with the anticipation that someone is going to pay? 

There's developments out there in foreclosure that tailspinned 1000's of contractors that started projects on large scale malls like in Kenwood and other parts of Cincinnati where all their money/time/labor was linked in, draws never showed up, everything is seized knowing you'll never get paid and someone else is going to prosper.



That's what has kept me from playing "big" in plumbing because when you play big, you can lose big, and I never want a taste of the top unless I can stay at the top.


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## ROCKSTARPLUMBER (Dec 14, 2008)

Dunbar, couldnt have said it any better myself man.


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## ILPlumber (Jun 17, 2008)

There is something to be said for being the small company doing big jobs.
The days of full-time employment in the union environment are over.

More and more companies are coming back to my way of thinking, through starvation. 

Good post Dunbar.:yes:

I am loving the self cleansing market. It is a good time to buy used tools.


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## DUNBAR PLUMBING (Sep 11, 2008)

Just got off the phone with another plumber that was telling me a larger non-union shop who was comprised of new construction is set to go under.

They had major overhead costs and since those numbers aren't there anymore, no sustaining. 


The company is way behind on its bills along with suppliers caught in the bad spot. 

I would HATE to be the supplier knowing you might as well say goodbye to product and profits. I guess the supplier could file liens against the homes but that would bring a hatred to all its own, knowing that the plumber was done paid and gone, inspection stickers already sealing the deals.

And here I thought I'd want to be a plumbing supply house....NOT! 

Those good deals aren't really good deals when you buy product at lower costs. Figure in operation costs and you're already running thin margins.

The fellow that owns the supply house that I buy the most from was telling me that margins for toilets/pumps/water heaters are so thin that they'd rather not sell them, but they have to in order to keep full lists in the supply house ways and means of balance. 


What do you think happens when you supply commercial water heaters, the big ones, and they sit for years before selling? There is no margin of profit in that unit. Probably a loss but you have to decide if putting another back in its spot, not knowing if you'll gain that next sale when you know there's a demand for it.

Even if it pulls up for these supply houses, the downturn will be a mark that they never erase on the earnings level and the ability to marginalize profits. Sustaining is the key word right now.


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## TheMaster (Jun 12, 2009)

I decided to be my own supply house for the most part and shop for deals...build a stock of parts that do not go bad and are good sellers. I've more than tripled my profits on materilas this way......However i mad ea large investemnet but the return is way better than what the bank would pay or a fund. I know i cant loose even if i dont end up selling it retail. At the prices you pay for liquidated plumbing materials from closing shops and supply house's.....you could sell it to other plumbers and still make a profit higher than the bank would pay. its the best thing I've ever done to increase my profit without increasing my customers cost.


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## Master Mark (Aug 14, 2009)

*already happenned in INDY*

sorry to hear that cincinnati is getting hit hard now...

we lost a big contractor laying off 300 last spring,

you have already said it all,

I too am glad I am small and established for 100 years




took 50 heaters over to the dump today in a huge dumpster that they dropped off at our shop..

might get 400 bucks out of it, 

that basically pays for my overhead


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## ILPlumber (Jun 17, 2008)

DUNBAR PLUMBING said:


> I would HATE to be the supplier knowing you might as well say goodbye to product and profits. I guess the supplier could file liens against the homes but that would bring a hatred to all its own, knowing that the plumber was done paid and gone, inspection stickers already sealing the deals.


Contractors must supply lien waivers from the suppliers in order to get a draw on large jobs.


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## DUNBAR PLUMBING (Sep 11, 2008)

ILPlumber said:


> Contractors must supply lien waivers from the suppliers in order to get a draw on large jobs.


 

That's a good practice, and I'm sure some of this is implemented here, but just the statement I was told by the owner of one of my local suppliers? 


He's in the till somewhere around $230,000.00 right now and he thinks, thinks he'll see 40% of that over the next 16 months. The rest will be never paid.


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