Road-work industry in Va. on fumes

The industry that builds and maintains Virginia's roads and bridges has come to a near-standstill and is counting on a jump-start from the president.

The quarries that provide stone for asphalt and concrete have laid off employees and closed some operations.

Paving companies are waiting to bid on state highway maintenance work so they can determine how many employees they can afford to call back in the spring from seasonal layoffs that were deeper than usual.

And companies that build and repair highway bridges are cutting back crews because they don't have the work to support them.

Everyone is waiting for the economic stimulus package that President Barack Obama has promised for rebuilding public infrastructure. Gov. Timothy M. Kaine expects the impact to be substantial in Virginia -- at least $700 million.

"The only thing we can hope is that something comes out of the stimulus package," said Phillip Burleigh, owner of Burleigh Construction Co. Inc., a bridge construction firm in Campbell County that has cut its work force by 40 percent. "If it doesn't, I'm not sure some companies will be able to survive."

The construction industry that builds and maintains Virginia's infrastructure has been hit from all sides by the recession. Work has disappeared in the struggling sector of housing and commercial development, and the state has made deep cuts in highway construction because it can't afford to maintain the roads it already owns.

"We're in a situation we've never been before, where both of your two main markets have gone in the tank," said Richard J. Schreck, executive vice president of the Virginia Asphalt Association, which represents almost three dozen asphalt producers in the state. "We've got producers who are bidding driveways right now."

That poses a problem for small construction companies, which are facing stiffer competition for contracts than ever before. "Jobs that normally get four to five bidders are getting 15 to 20 bidders," said Andy Curtis, general manager of Curtis Contracting Inc. in West Point.

"Obviously, I'm for the stimulus package because I think the way to solve this economic thing is to put people to work," said Curtis, whose company employs about 80 people. "That's the only piece of hope out there right now."

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Kaine says he expects Virginia to get a sizable piece of whatever stimulus package the Obama administration and Congress produce, but state highway officials say it is too soon to cite which projects the money will support.

Most likely, the first projects to get help would be the ones the state is preparing to drop from its six-year construction and maintenance plan as part of an unprecedented $1.3 billion midyear budget cutback, on top of $1.1 billion in cuts made in June.

"And that number is going to grow," Secretary of Transportation Pierce R. Homer said this month.

More than a half-dozen projects in the Richmond region have been proposed to be cut from the plan, including the repaving of Interstate 64 in Henrico County, major bridge repairs on Interstate 95, the widening of state Route 33 in Hanover County and the widening of West Hundred Road in Chesterfield County.

"Those would all be prime candidates for stimulus funding, should that become available," Homer said.

One stimulus proposal has been put on the table by Rep. David Obey, D-Wisc., who is chairman of the House Appropriations Committee. The $825 billion package includes more than $42 billion for transportation, with about $29 billion of that amount going toward road construction and maintenance. Based on federal funding formulas, industry officials estimate that Virginia would receive $730 million to $760 million.

Virginia's road-building industry also is waiting for the reauthorization of the federal highway funding act, known as SAFETEA-LU, which will expire Sept. 30. Most worrisome, Congress had to pass an $8 billion emergency bill last fall to shore up the Federal Highway Trust Fund, which was running out of money.

No matter what the federal government does, it won't substitute for a sustained source of funding to meet Virginia's mounting needs for transportation improvements and maintenance.

"This is not a long-term fix," said Charlie Luck IV, president and chief executive officer of Luck Stone Co., a Goochland County-based aggregates producer that laid off 126 people in November and shifted an additional 25 within the company. "It's going to be like a meal, not a feeding program. It's a cup of water to prime the pump."

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Industry officials are especially interested in the conditions that come with the stimulus money. Obey's proposal would not require states to match the funds, but they would have to use the money within a certain time frame or lose it to other states.

The asphalt industry is looking for jobs it can do quickly. "If there is a significant maintenance component to the package, that is something you can virtually start doing overnight," said Ron White, CEO of Superior Paving Corp., based in Gainesville.

Timing is critical. Many contractors already have cut their work forces and are waiting to see how much state maintenance work they will have this spring before deciding whether to make seasonal layoffs permanent.

"Will there be work out there to provide for current levels of employment?" asked Rick James, executive vice president of Adams Construction Co. in Roanoke. "At this point, unless something changes, there is no way in the world that is going to happen."

Adams employs about 600 people and owns 22 asphalt plants in Virginia and North Carolina. The company has laid off about 60 people on a permanent basis, along with 340 seasonal layoffs that were much deeper than usual this year.

Usually, asphalt producers and pavers bid on state jobs in January so they know by the next month the maintenance work they will have on April 1. This year, however, the state delayed advertising projects until about two weeks ago, a month later than usual. So the projects won't be bid until next month, and they won't be awarded until the Commonwealth Transportation Board meets in March.

So far, the state has advertised projects in just four of Virginia's nine highway-construction districts; the rest will be advertised by Tuesday. State officials say the delay will not affect the April 1 start date for the paving work.

In the meantime, Adams is considering other ways to cut costs -- such as reducing the workweek to four days -- or make money, by looking for work outside of Virginia in states with more money for road construction. Otherwise, the company could face more layoffs.

"It's really a very painful situation," James said, "one of those ones that keeps you awake at night."

Charlie Luck already has been there. His 86-year-old family business supplies crushed stone to asphalt and concrete producers for roads, bridges and commercial and residential developments. He estimates that revenue in the stone-aggregates business has declined by 30 percent in two years.

With the housing market frozen and no prospect in sight for more state road funding, Luck said, "you look at the outlook and you go, 'I have no choice.'"

The company had been trimming costs for almost three years. It already had reduced its work force by about 100 positions through attrition when it announced job cuts in mid-November. The company has suspended operations at four plants while continuing to serve customers in those markets with other nearby facilities.

"We have done everything possible, and we have to reduce people now," Luck said.

His biggest competitor is doing the same thing. Vulcan Materials Inc. has laid off about 120 people, or about 10 percent of its work force in Virginia. It has laid off another 120 people temporarily, reduced work hours for employees and idled three of its operations in the state, including a quarry in Amelia County.

"The best move for us was just to close the gate," said Gray Kimel, president of Vulcan's six-state mideast division.

"I've been in this business for 37 years, and I've never experienced . . . a downturn of this magnitude," he said.

In Culpeper County, the owner of a quarry and asphalt operation laid off 75 of its 125 employees, many of whom had never lost work, even in the winter.

"These are not seasonal layoffs," said Edward Dalrymple, president of Cedar Mountain Stone and vice president of Chemung Contracting Co., which also operates in Gainesville. "These are layoffs until the work comes back."

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The cutbacks at the quarry operations have had a ripple effect with equipment dealers and parts suppliers, as well as the independent truckers who haul the stone.

"A lot of them have just parked their trucks," said John Leonard, a Short Pump resident who lost his job as a transportation manager at Luck Stone.

The companies faring best are diversifying what they do and relying on local and federal government contracts, rather than private development or state road projects.

"We've been fortunate. Because of our diversity, we've been able to move people around and try to weather this storm," said Paul Trapp, managing principal for infrastructure and environmental services at the Timmons Group, an engineering firm based at the Boulders in Chesterfield.

Timmons employs about 350 engineers. The firm has reduced staff by about 20 people through what Trapp called selective decisions, rather than general layoffs. The company is well-positioned to take advantage of stimulus spending because it designs wastewater and stormwater systems, as well as road projects. Trapp is waiting on the details.

"Even if there is a sufficient amount of money and it can be handled quickly, there are questions about who's going to manage it," he said.

Rick James and other asphalt producers are just looking for help wherever and whenever they can get it.

"I do believe our situation is best described as dire," he said.

Contact Michael Martz at (804) 649-6964 or .