Construction. What's Going On?

[Tannedbaldhead]

Just been Informed my Employer has just lost the contract I was working on. Someone from HR at head office is coming up to bonnie Scotland to chop a few unfortunates one of whom shall probably be my good tanned bald self.
Being the proactive type I've pinged my cv to any relevant party I suspect will have me. I've been here before and have always managed to find work. Two problems stand in my way: Firstly things (in Scotland) seem to have ground to a halt after starting to look a bit more promising and secondly for the first time in my life I'm stubbornly not going to move home to find work. In the past I've worked in Manchester, North Yorks, Ireland, London and the South East, Co Durham and Carlisle and at a kick in the arse off 50 I've had enough.
My best hope is that the company who have won the contract will take me on due to my working knowledge of the client, the contract, schedules of work and finances. It's not a job I'm looking forwards to mind. The current contract is losing my current employer money. This new prospective employer has undercut us and will be looking to me to drive even further efficiencies (basically make everyone work even harder for even less money) taking on even more stress and all for a poorer pay and condition package.
Is this the way it is?

[Tannedbaldhead]

Hang on! This should have been in "Jobs".

Where's a moderator when we need them.

[vescaegg]

Driving efficiency, making people work harder etc etc

I think you just described 'a job'.

[talksthetorque]

Is there going to be any Tupe-ing going on? If a contract is taken over by another supplier, and they still need someone in the same job, I think Tupe comes in to play.
I know a guy. ( in Edinburgh as if happens) who got made redundant, went to work for a competitor on a single customer account, his new firm lost the contract to his old firm and he got typed over and made redundant again by his old firm again!

[tleefox]

Who do you work for?

As the industry is picking up a lot of companies appear to only now be finding out how much they are struggling - probably due to contracts taken on on massive losses a year ago.

I am in Bristol, in the last 2 weeks we have lost 2 very well established local firms that have been tracing for 50+ years - downfall being poison contracts taken on in the recession.

Balfour Beatty's struggles are well publicised and unless they can sell Parsons Brinckerhoff, they will go bust from what I hear.

Things are picking up but companies are still trying to claw back huge losses from the recession.

[dxg]

Hence Morgan Sindall's troubles of late.

[CRB14]

tleefox said:

Who do you work for?

As the industry is picking up a lot of companies appear to only now be finding out how much they are struggling - probably due to contracts taken on on massive losses a year ago.

I am in Bristol, in the last 2 weeks we have lost 2 very well established local firms that have been tracing for 50+ years - downfall being poison contracts taken on in the recession.

Balfour Beatty's struggles are well publicised and unless they can sell Parsons Brinckerhoff, they will go bust from what I hear.

Things are picking up but companies are still trying to claw back huge losses from the recession.

I can't see them going under. They are huge not just in Britain but around the world too.

[a boardman]

tleefox said:

Who do you work for?

As the industry is picking up a lot of companies appear to only now be finding out how much they are struggling - probably due to contracts taken on on massive losses a year ago.

I am in Bristol, in the last 2 weeks we have lost 2 very well established local firms that have been tracing for 50+ years - downfall being poison contracts taken on in the recession.

Balfour Beatty's struggles are well publicised and unless they can sell Parsons Brinckerhoff, they will go bust from what I hear.

Things are picking up but companies are still trying to claw back huge losses from the recession.

Balfour Beatty sold Parsons Brinckerhoff in September to WSP Global for 820 million.

[tleefox]

a boardman said:

Balfour Beatty sold Parsons Brinckerhoff in September to WSP Global for 820 million.

No they didn't - a deal was agreed but has yet to be ratified by BB shareholders.

http://www.cnplus.co.uk/companies/contractors/balf...

CRB14 said:

I can't see them going under. They are huge not just in Britain but around the world too.

So? They are huge in America and their situation across the pond in terms of poison contracts is worse than in the UK.

[CRB14]

tleefox said:

So? They are huge in America and their situation across the pond in terms of poison contracts is worse than in the UK.

It's my opinion. I just don't see them going under. They have had a torrid time yes but my feeling with the last profit warning (or lack of) is that they'll have written down all the bad jobs as far as they dare.

[dxg]

I would I could remember exactly the context, but in my half-asleep turmoil this morning, probably around 6:30am I was woken up by a "city bloke" guest's sudden mention of Balfours alongside the likes of Tesco as an example of a company that's in real trouble...

[Tannedbaldhead]

tleefox said:

Who do you work for?

As the industry is picking up a lot of companies appear to only now be finding out how much they are struggling - probably due to contracts taken on on massive losses a year ago.

I am in Bristol, in the last 2 weeks we have lost 2 very well established local firms that have been tracing for 50+ years - downfall being poison contracts taken on in the recession.

Balfour Beatty's struggles are well publicised and unless they can sell Parsons Brinckerhoff, they will go bust from what I hear.

Things are picking up but companies are still trying to claw back huge losses from the recession.

I work for a private contractor providing repair, maintenance and refurbishment works in the Social Housing Sector. It's been carnage here since 2010. We've seen some really big players such as Connaught and Morrisons bite the dust. The Industry is tearing itself apart with suicide bidding to win contracts. Companies are taking on contracts where they have no chance of turning a profit.
Commercial managers and Quantity Surveyors are then put under huge pressure to squeeze every last penny out of clients who due to cut backs in Govt grants towards social housing improvement haven't any pennies to be squeezed. Next target is our own staff who are expected to finish more and more jobs within a time period and once that's achieved start an hour earlier in the morning, hang around a little later in the evening and instead of taking a lunch eat a sandwich in the van driving between two jobs and all for a wage that in real terms has been cut substantially over the last few years.

[Mattt]

Plenty of work out there, for those prepared to 'get on their bike'.

[Tannedbaldhead]

Mattt said:

Plenty of work out there, for those prepared to 'get on their bike'.

What if they're not?

I was very switched on and prepared to move in the past. I lived in the North of England, London and then back in North England for the sake of my career. The transient lifestyle was a major contributor to the breakdown of my marriage. I studied, got my degree in Quantity Surveying, have gained further qualifications in specialised sectors of build technology, health and safety, asbestos management and man management. I've given an above and beyond the call of duty level of service to all my employers and yet all I seem to earn is wage cuts, poorer terms and conditions and regular redundancies. I've had enough. I'm going to sit here and apply for positions where I don't have to move from a house I've spent a lot of money refurbing for my benefit rather than that a tenant or new buyer and where I don't have to do a hundred and severalty mile round commute.

A Friend of mine (electrical engineer and project manager) has just had to take a job in Dundee (he lives in North Lanarkshire that's a 3 hour round commute for a £30k pa job when the guy has qualifications and experience that should earn him £50k on his doorstep).

[tleefox]

CRB14 said:

It's my opinion. I just don't see them going under. They have had a torrid time yes but my feeling with the last profit warning (or lack of) is that they'll have written down all the bad jobs as far as they dare.

You're probably right, but not somewhere I would want to be working right now! There was an interesting article in one of the broadsheets a few weeks ago comparing their current situation to that of Laing before their demise.

Tannedbaldhead said:

The Industry is tearing itself apart with suicide bidding to win contracts. Companies are taking on contracts where they have no chance of turning a profit.

You're not wrong - I went to an interview for a framework project a week or so ago where we were down to one of 5. There was one company on the interview list who I won't name, but we knew straight away that we would not get the project because they are suicide bidding at the moment to boost their order book as the company is being touted around the market for sale.

You're in a different part of the country to me, but in the South there is silly money being thrown around by the agencies.

IMO, while the industry may be picking up, the real acid test for a lot of companies in terms of how they have really fared throughout the recession is yet to come over the next 12-18 months, and I can see a lot of companies folding.

This article from yesterday on Vinci sums up a lot of the problems the major players are facing:

http://www.constructionenquirer.com/2014/10/27/vin...

Vinci are huge - all it takes is 1, 2 , 3 big contracts to go severely wrong as per the above and the problems quickly mount up.

This sums up the industry as a whole quite well:

http://www.constructionenquirer.com/2014/10/28/opi...

Edited by tleefox on Tuesday 28th October 08:09

[anonymous-user]

I was chatting to someone high up at Skanska at an infrastructure "meeting" who was pulling their hair out at the pricing of some large contracts, they are not even bidding as they cannot even cover costs on what some other firms are pricing at, possibly with the hope of making money on "contract add ons"?

They even seemed concerned for the "welfare facilities" of their staff.

[CRB14]

It definitely isn't just Scotland struggling. In the last 8 years or so I've worked on probably 7 or 8 different projects and only one has been a profit maker. 3 or 4 have lost a good 10%.

The main reasons I put this down to is a lack of good site management. The amount of times I've been sat in my office and the manager comes in saying 'we need to place this order to start tomorrow' is unreal. Most of the time the work is included in a package already and they don't even know who is supposed to do what.

I think it stems from a lack of accountability. They will get it in their heads that te job is screwed and won't make money and it snowballs. They start to panic then suddenly it's the surveyors working every hour god sends to pick up the mess.

I'm not joking here when I say I've worked on a job where the main guy on site never looked at a drawing.

It's probably easy as a surveyor to point fingers but this is what I'm experiencing on a day to day basis. Why company Directors can't see this I'll never know.

Incidentally I have worked on one abortion of a Balfour job. The things that went in there were mind blowing!

I can see some big shocks though over the coming 2 years sadly. I'm not sure we have the people left in the industry to actually deliver the demand now. There's certainly a lack of quality in all aspects of the industry.

Building isn't difficult but we make a right good meal out of it sometimes.

[tleefox]

CRB14 said:

3 or 4 have lost a good 10%.

The main reasons I put this down to is a lack of good site management.

Disagree - site management aren't the ones who sign on the dotted line with a client to build something on a 10% or more loss. If, on the other hand, you've got a project that is forecasting to break even which turns into a 10% loss then I would be looking firmly in the direction of the PM.

I worked on a job 2-3 years ago worth circa £17million. This was a project that at the time my company were desperate to win to get into bed with the client, who has a circa £500million pot of money to spend over the next 10-ish years. Because of this the MD's of my company were involved in the tender adjudication meeting (including some flying in from abroad) - to make sure we won the job this literally involved slashing 15%, 20%, 25% out of all the priced packages one by one, followed by another 10% for good measure when it got to the bottom line. This eventually resulted in us winning the contract forecasting a loss of close to £3million - I honestly could not believe it.

Fast forward 2 and a bit years and we had managed to claw back close to £1million but the forecast end figures were still a net loss of close to £2million. This raised all sorts of alarm bells in the ivory towers of the same MD's who had participated in the fire sale to begin with, and the same MD's flew over again to run the rule over all elements of the project. Who they were expecting to magic £3million out of a cupboard I'm not quite sure.

CRB14 said:

The amount of times I've been sat in my office and the manager comes in saying 'we need to place this order to start tomorrow' is unreal.

Disagree again I'm afraid, although this may be down to how I run my projects. Why hasn't the QS placed the order so that it doesn't become an issue the day before they are needed on site? We always have a procurement programme which is put together by the PM and the QS before the project even breaks ground which dictates when orders need to be placed by the QS to meet on site dates. I would, however, expect my SM's to be speaking to the QS in plenty of time to make sure people are lined up for when they need to be.

CRB14 said:

I can see some big shocks though over the coming 2 years sadly.

Building isn't difficult but we make a right good meal out of it sometimes.

These 2 points I agree with 100%.

[CRB14]

Just to clarify my points slightly;

1) all projects I've referred to were signed up to with a positive margin - many with contingencies that were quickly eaten up
2) when I refer to site management it's all-encompassing with PMs and Construction Directors. It's not just poking at the blokes on site.
3) The point I made about the managers asking for placement of orders in a hurry was more about the fact that if they had read the package documents provided they would realise the orders are already placed. They never read the scope documents and often refused to even get involved with scope writing and pre-order meetings. Completely agree though that more input is required with the men on the ground.

Perhaps it's a little unfair to solely lay the blame on site management. The commercial departments are obviously not always blameless. Some jobs there has been an unnecessary barrier built between commercial and operations departments. There's often an 'us vs them' attitude which is one I generally try to break down and try to promote a more collaborative approach. It definitely helps.