Aspen Earthmoving digs in during tough economic times
CARBONDALE ” One of Aspen’s oldest construction companies is using the same formula that’s helped it thrive for 25 years to survive one of the most severe economic downturns to hit the valley.
When Aspen Earthmoving celebrated its silver anniversary with a company picnic at its shop in Carbondale this fall, president and chief executive officer Rick Stevens told the 90-plus employees that their hard work and dedication is helping the company weather tough times that are certain to cull some of the competition.
Until recently, the Roaring Fork Valley was on an unprecedented building binge since the mid-1990s, with just a small hiccup during the economic downturn after the 2001 terrorist attacks. That came to an abrupt halt this year. Architectural firms have laid off employees. Some real estate agents are advising prospective clients to keep their homes off the market for the near-term future. Even major developers like Chicago-based Joseph Freed and Associates are having trouble securing loans. The company placed construction of the Whole Foods building at Willits Town Center on hold, at least temporarily.
“It’s pretty spooky,” said Stevens, who gave the current economic climate a “7” in severity on a scale from 1 to 10, with 10 being the worst. Sept. 11, 2001 was only a “1” on Steven’s severity scale and the bursting of the dot.com bubble in the 1990s barely registered.
“This thing here has been significantly more impactive,” Stevens said. The company had about $6 million in work lined up but it was all canceled last spring.
“We had quite a bit of backlog and it all went away,” Stevens said. “We had a tough time replacing that work.”
He said he is confident that with some strategic planning, Aspen Earthmoving will make it through the current lean and uncertain times. The company billed $16.6 million for services last year and expects to match or exceed that amount this year with a big push in the final months.
The company’s size and reputation help. There are a lot of small companies out there, established in the recent boom times, that will be challenged.
“Some of the guys that run around with a cell phone number of their dump trucks aren’t going to make it,” Stevens said.
Stevens was blunt that Aspen Earthmoving needed to reshape its business plan after some miscalculations in 2005 and 2006 by a former president and CEO. The construction company was sold in June 2005 by founders Chris Smith and Steve Kinney, and it briefly strayed from the founders’ principals.
Smith and Kinney teamed up in 1983 and formed a three-man operation with a dump truck or two, a couple of backhoes and a track excavator. The company grew slowly but steadily throughout the 1980s and into the 1990s by building relationships with some of the longtime homebuilders in the Aspen area. It was a simpler time then. Construction companies worked for eight months and shut down during the heart of winter and went skiing.
Stevens was the sixth employee to join the firm, in 1985. During winters, he taught skiing.
The simple pace changed in the mid-1990s. Land development was no longer locally-oriented. Aspen’s lucrative real estate development opportunities lured companies from outside the area.
As a result, construction jobs for firms like Aspen Earthmoving moved away from the days when they were “digging basements for buddies,” Stevens said. Work was year-round and plentiful, and it attracted lots of competition.
Aspen Earthmoving’s growth accelerated. The firm now has roughly 26 dump trucks and 20 excavators in its fleet of about 70 pieces of equipment. Aspen Earthmoving’s role has expanded beyond digging foundations to installing infrastructure and preparation for concrete work. “We pretty much do soup to nuts,” said Stevens.
Some of its major jobs include foundation work for Related/WestPac at Base Village in Snowmass Village and reclamation work at the old coal mine staging areas in Coal Basin outside of Redstone. Aspen Earthmoving did the majority of the construction of the valleywide Rio Grande Trail, contracting with both Pitkin County and the Roaring Fork Transportation Authority. Pitkin County and the city of Aspen have consistently hired the firm for utility and road work.
“It wasn’t our decision to be this big, but the demand was there,” Stevens said.
Smith and Kinney sold to a group of investors that include Aspen businessman John Jellinek. They brought in a president and CEO who had grand plans to build Aspen Earthmoving into a $35 million per year company, more than doubling its business from 2004.
The staff swelled to 124 employees in 2005 and 2006, but the growth was unsustainable, Stevens said. The owners decided that the CEO had to go at the same time key employees reached the same conclusion, according to Stevens.
Stevens was appointed president and CEO in May of 2006 and, with the blessing of the ownership, he and the staff embarked on a downsizing plan starting in August of that year. By May 2007, they cut 30 positions, mostly administrative. The current staff of 94 includes 30 equipment operators and 16 dumptruck drivers, 12 laborers, seven mechanics and various supervisors, job estimators and administrative staff. Roughly 80 of the workers stay on year-round, often cross-training in other jobs during winters.
Aspen Earthmoving has a $6 million annual payroll, including a full benefit package. Another $3 million in work annual goes to subcontractors and $2 million to vendors supplying materials. All told, Stevens said, it pumps a significant amount of money into the local economy.
The company has a reputation of cultivating intensely loyal workers. Many have been with the firm for a decade or more. Emphasis is placed on promoting from within, a practice that Smith instituted as an owner. (Smith died in a tragic drowning in Florida in 2007.)
Fathers have brought in sons in to the business; uncles have brought in nephews. The company also has been a melting pot. About 35 percent of the employees are Latino. The company has an impeccable process to check legality, Stevens said. Integration hasn’t been an issue.
Along with cutting staff, Aspen Earthmoving shifted its focus in late 2006 and 2007 back to providing excellent service while maintaining a sustainable growth rate, Stevens said. That repositioning served the company well when shit hit the fan with the economy and slowed construction in the Roaring Fork Valley this summer.
Aspen Earthmoving will, out of necessity, be on more jobs in 2009, Stevens said. Many of them will be smaller jobs that the company might have skipped in recent years.
The company regards western Garfield County as a future market for growth. It’s been focused primarily in the Roaring Fork Valley for its first 25 years and work in Aspen and Snowmass Village is generally the most profitable. But the Interstate 70 corridor from Glenwood Springs to Rifle presents the greatest opportunity for growth. Aspen Earthmoving isn’t necessarily looking at work associated with oil and gas extraction, Stevens said, but development sparked by the natural gas boom.
“We’re trying to imagine what’s going to happen,” he said.
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In 1895, the fad sweeping Aspen for women was to dye their hair red.