During this tumultuous time in our history, my Fieldwire co-workers and I have been reaching out to everyone in our professional networks to learn how they’re doing and to find out how we can help. Neree Croteau, a PM at Classic Industrial Services in Louisana, actually contacted us via LinkedIn, commenting on our “Coronavirus’s Impact on Construction” article.
Fieldwire’s Head of Marketing Ray Mina and I spoke to Neree about the situation he’s dealing with — including a COVID-related death and a sudden jobsite shutdown.
[Yves Frinault] Hey. It’s Yves. I am the CEO of Fieldwire and I am here with Neree Croteau, or Gabriel by his French Quebecois name, a project manager at Classic Industrial Services. They are a specialty contractor that does anything from scaffolding, cladding, and refractory work. For those of you that don’t know what refractory work is, they are like the high heat dowels you’re going to find inside of boiler ovens and things like that. I didn’t know.
[Neree Croteau] Yes.
[Yves Frinault] I am sharing a wealth of knowledge here. Neree, thanks for joining us here today.
[Neree Croteau] No worries.
[Yves Frinault] And of course I have Ray as well with us. Ray, our Head of Marketing at Fieldwire, who has been setting this entire thing up.
Let’s start with the news. The Governor of Louisiana announced yesterday that there is going to be a “stay-at-home” order, that they’re shutting down the vast majority of the industry. Some construction sites, I understand, are allowed to run. What’s the situation from the ground?
[Neree Croteau] Yes, that’s very true. Most sites are still running that are considered essential, and I think that’s going on a case-by-case basis. But in general the city is at a stand-still. You can still order out as far as meals and things of that nature but you have to call ahead and do a non-direct hand off. Essential goods, such as grocery stores and fuel depots and things of that nature are still running. From my example, my site is not running for the foreseeable future.
[Yves Frinault] All right, so let’s dive in a bit further there. Let’s talk about the site that was running and what the situation is for you guys on the ground.
[Neree Croteau] Sure. My site is a plant found about thirty miles outside of New Orleans. It’s a half-active plant and our site is an expansion of that plant. There’s an operation side and a construction side. Recently, within the last couple days, there was a confirmed case of a fatality, resulting from COVID. And that prompted the owner of the plant to signal a shut-down of all operations for the foreseeable future. Therefore, our construction side and the plant itself will not be running until at least the Governor’s mandate lifts which I believe is the 12th of April, and we might be off work for a little bit longer than that.
“There was a confirmed case of a fatality, resulting from COVID. And that prompted the owner of the plant to signal a shut-down of all operations for the foreseeable future.”
[Yves Frinault] Okay. Did the owner announce a timeline of shutdown, or did they give you some information on when the project might reopen? What kind of visibility do you have right now?
[Neree Croteau] Currently we have no visibility on when the project will resume. They did not provide us with anything other than, “We will be down for the Governor’s mandate,” and they will provide further updates as they become available.
[Yves Frinault] Okay. From what I understand the shutdown was pretty quick and brutal. It might have actually happened before the stay-at-home order was issued by Louisiana and it goes as far as you guys having your tools locked on the site. Can you explain to us a little bit about the sequence of events and why this is happening?
[Neree Croteau] Sure. The word came down that there’s an emergency meeting called between all the project managers and all the company’s vice presidents and leadership late Saturday evening. I believe this is a result of the confirmed fatality that I mentioned a moment ago. This person wasn’t exposed on the site but because it was on the same footprint they made that call.
They informed us that they were going to be shutting down the site and that more information would come Sunday morning. Sunday morning we had an email basically saying that my company would be allowed ten people on the site Monday morning and we have the day to basically shut down and stow away any critical items for the foreseeable future.
Later on Sunday, the Governor made the mandate and that expanded our site shutdown to include the duration of the shutdown per the Governor’s mandate and maybe, possibly further. Because of their rapid shutdown timeline — because there’s over ten or twelve contractors on-site and we have a site of roughly 1,500 people — they were not allowing personal tools to be removed from the jobsite because we would not have enough time to get them out. The reason for this is each personal toolbox, or anything that goes off-site, has to be inspected visually. We would have no way to identify, load, and inspect all the toolboxes for all the individuals in the timeframe we were given. Until the Governor’s mandate is lifted, all personal tools remain on site.
Additionally, we had to contact all our third-party vendors to try to put a stay on all equipment rentals for the time being because there are over four-hundred pieces of equipment on the jobsite and there would be no way to get them all out within a day or two. There’s just not enough trucks available in the region and I assume there would still be equipment deliveries going on all over the state.
For the time being, we are shut down at least until the 12th and it could be longer than that.
[Yves Frinault] Okay. Can you clarify a little bit why there were the extra inspection steps to look at the toolboxes you were taking off the site? Is it because it’s an active plant? What is the reason?
[Neree Croteau] It is because it’s an active plant. The owner is generally concerned that items that belong to the plant might be improperly removed. They implemented the step of everything that has to leave the site has to be inspected by security. Which means individual inspection, eyes on every piece of equipment or tools that leave the jobsite.
[Yves Frinault] Okay. So that makes complete sense. So basically, your tools are locked on the site. A lot of your rental equipment is, as well. What was the nature of the discussion you managed to have with the various companies you are renting equipment from? Were they understanding? How did that work?
[Neree Croteau] Actually, it was pretty helpful, speaking to the various companies that we work with. Because of where we live in New Orleans and the Gulf Coast region, they have a lot of experience with these types of cases. Hurricanes, they roll through every year. Standard practice is usually to put a stay of the rent onto a piece of equipment. They either stop the rent in place and resume after or reevaluate every couple of weeks. Or what they’ll do is they’ll close the ticket out on that equipment and start a new ticket the following day and just delay the start of that ticket until operations resume. Our vendors are very helpful and have been good about working with us, too, to get through this ordeal.
[Ray Mina] Is some of this personal equipment from your team? Is it their own personal equipment?
[Neree Croteau] We only have a couple — two or three pieces of equipment that belong to the company. Everything else is going to be third-party — aerial lifts, fork lifts, things of that nature. Just heavier equipment.
[Yves Frinault] If you look at the volume of activity of the company right now, are you guys essentially completely shut down right now? Do you still have projects running outside of this major one? What’s the situation?
[Neree Croteau] For my branch of the company, I believe there’s one other plant or one other construction site that is still running, but they’re running at a much lower rate. They are able to reduce their hours to forty hours a week and I believe they are still having discussions about whether they want to shut down, as well. Basically, we’re running at 50% as far as our business volume and once that one shuts down we will probably be at a complete standstill for the foreseeable future.
[Yves Frinault] Okay. I mean, it’s always a big question on major sites like that where the continued activity is actually dangerous. You said that there were discussions on how to adjust the work prior to the state shutdown. What were the steps that had to be taken care of? Talk to us more about that.
[Neree Croteau] Sure. The general contractor was going to do everything they could within feasibility to try to create some distance between the employees. They were adding additional lunch times and they were going to separate all the tables to create a little more space. Eery crew was going to have their own table for every company. There was going to be one person per bus because the craft had to be bussed in and out through security. They would have one person per seat and they would be wiping down the busses between each trip.
Additionally every meeting or every lunch session would have everything wiped down with Clorox and bleach to reduce the infection rate. Also, we were going to be moving towards rolling fours starting yesterday which would have been a four-day-on, four-day-off, twelve-hour shift. They were splitting the contractors into two shifts, “A” shift and “B” shift, so my company would have gone “A” shift, along with a few other contractors that we kind of work with in the same scope or region. Everybody else would go to “B” shift, so we would work Monday through Thursday, they would come Friday through Monday, and we come back Tuesday. That was kind of the plan that we were going to roll with moving forward, like I said, yesterday. But with everything happening this week, that plan kind of got nixed and we went into a full shutdown.
[Ray Mina] One of the things I remember when you and I talked previously was the one thing you said that was keeping you up at night was what are the plans for your team to make sure they are going to get compensated in some way. Because there was a fear of, if you’re not able to, they may need to leave and find work somewhere else and then you were going to lose them forever. What is that situation now?
[Neree Croteau] It’s a difficult one. With the tools being stuck on the jobsite, no one can really go anywhere. They don’t really have an opportunity to earn a living the way we would like them to, but again we can’t really risk letting them into the plant to get their things. There’s just too much risk of exposure.
The rates we have been seeing in Louisiana — the virus has spread pretty quickly. So until the stay-at-home mandate ends, we can’t really let them in to do anything about that. The other issue that I have been considering is, maybe we need to try to lay off some people and give them the opportunity to collect unemployment. But there’s a whole mess of issues that come along with that, as well. We’re still trying to find a good solution in order to make sure everybody has an opportunity to take care of their families and earn a living.
[Ray Mina] I think you mentioned you were in the virtual town hall today. A lot of contractors have this on their mind as well. If you were to replay this, if you were to offer guidance to other subcontractors out there, what recommendations would you make to them? What questions should they be asking to try to avoid something like this happening to them?
[Neree Croteau] The main thing I would try to figure out is, how can you mitigate the pain point? I think everybody’s heart was in the right place, to try to keep the job running as long as possible so people could keep earning a paycheck. But I think in the end it put us in a much tougher position, especially when we had to do a rapid shutdown. In my opinion it would have been better if we shut down the job last week, or the better part of a week, and gradually come to a stop. That way, we would have time to get everything off-site, get everybody’s tools off-site, and safely shut the project down. Versus we only had one day to kind of patch work together and put away — materials stowed, materials strapped down, equipment moved to a safe lay-down yard, and just got out.
In that sense, we put everybody in a position where people — if they want to go somewhere else and try to earn a living, they really don’t have the option to, if they want to try to leave the state or something like that. I would say, if you’re going to make the decision, it’s better to have a little bit of pain for a short period of time than to have a really uncomfortable position for a little bit longer. We could have probably shut down, had two weeks off, and maybe have been past it. Instead we’re going to be down for much longer. People are going to be in a little bit of a tougher situation.
[Yves Frinault] We have seen that communicating more openly with partners — whether it’s your owner, whether it’s the general contractor, whether it’s the other trade partners — sometimes it generated better outcomes. As you said, you were able to call over to your suppliers and they accepted to extend a situation of free rent or no rent on the materials. What could have been done better in the communication with the other partners to improve that shutdown?
[Neree Croteau] Yeah. I hadn’t considered it, I have only been down to this part of the US for a little over a year, and I hadn’t really had to deal with a hurricane or anything like that where the jobs get shut down very quickly for an extended period of time.
I would recommend if you see something like this — you can’t really see something like this coming — but if you have a storm or a virus like we have right now, I would reach out sooner to your partners and begin to have the discussions a couple weeks prior. “What are we going to do when and if something like this happens.” I know, speaking for some of the safety teams, everybody has a contract clause for hurricanes, everybody has a safety mitigation plan for hurricanes. No one has a plan in place for this kind of viral disease or epidemic. I guarantee after this, every single contract will have some kind of clause and every single safety plan will have a large section devoted to what we do with a viral- or a disease-like epidemic. It’s just trying to get out of it. It caught a lot of us off guard. We thought it was not going to be quite as big of a deal and it turned out to be a much bigger deal than anybody wanted to think it would be.
[Ray Mina] Everyone gets to see my CNN moment with my daughter running in. It’s because my wife is a pediatric nurse who is working night shifts right now. I bring that up because you had mentioned to me before about how you were doing some personal things like letting people know in your team where testing stations are. Can you talk a little bit about some of those things? It sounds like you took some things into your own hands to help people out. What were those things and what was the inspiration for them?
[Neree Croteau] Yes. When I realized we weren’t getting enough information quickly and there could be any number of reasons for this — I don’t want to put it on anybody as far as them not trying or anything like tha. But I had the luxury of being surrounded by medical students because my wife is a fourth-year medical student. I had a lot of information coming in and there’s also a safety manager for a company across the hall from me who also has a wife that works for a medical provider. We kind of pooled our resources from our partners to gather information to distribute it to the site.
My wife put together a flyer that showed all the local testing centers in the region for COVID as well as a link to show where you could get the most recent data and additionally showing people how they could do virtual teleconferencing with a doctor versus going to the ER and maybe possibly infecting somebody else. Then this gentleman put together a mitigation plan within a couple hours that we shared with as many people as we could.
I would recommend: just don’t wait for a solution to come to you. If it’s not coming in as timely the fashion that you need it in, you need to work on and use your resources to try and find the solution. That’s kind of how we were able to get through it as best we were able to.
[Yves Frinault] Yes. That makes a lot of sense. I have seen there’s a tendency in the industry to be strong against the headwinds, but this is a time we need to adapt quickly and find solutions locally to some of those problems. I think for example making resources available to the trades on site so that they know what to do. Communicating to the teams, communicating to partners, make a lot of sense. I think for those who don’t know, last Friday was ‘Matching Day’ which is the big day that most medical students in the nation — when they know they’re going to get their hospitals, what’s the exact term?
[Ray Mina] Advanced training.
[Neree Croteau] Yes, that’s correct.
[Yves Frinault] Once again, we are super thankful to all those that are on the front lines of the healthcare side. That’s a big deal right now. They didn’t even get to celebrate, because that’s usually a big moment for students and most of them —
[Neree Croteau] Yes, a lot of them have been pulled in to do the virtual call centers. Just because, if they are getting short-handed, they have been doing a lot of shift work. I know my partner as well as a bunch of other people have been doing shift work at the hospital doing the call center.
[Ray Mina] Please thank her for us.
[Neree Croteau] Yes, no worries.
[Yves Frinault] Yes, it’s important right now. Okay, I think you have a situation right now where the site is shut down, the company is operating at a reduced volume, what do you think is going to happen in the next few weeks? Few months? This is likely to last at least four-to-six weeks, we don’t know if it’s going to be extended further. What are your thoughts on that?
[Neree Croteau] Yes, we’re in a really tough spot. All I can really do at the moment for my team is, I am trying to track the costs available. What basically comes from this whole situation in order to properly protect my company from any kind of fallout as far as equipment, labor, any kind of time we spend planning.
I myself have to spend a lot of time planning how we’re going to re-start this job. How we’re going to mobilize everybody that has been home for a couple weeks and how do we safely and quickly bring everybody back to the jobsite? It’s going to be a trying couple of weeks. There’s not a whole lot we can do as far as making things better right now. The best we can do is plan, and plan, and try to make sure that when we are able to get everybody their tools back and we can get back to work, we can do that process quickly and safely and go back to earning something to take care of their families and friends.
[Yves Frinault] One quick question. Are you guys a union shop? Or are you non-union?
[Neree Croteau] We are non-union.
[Yves Frinault] Okay. You’re non-union. I am very interested in what the unions are doing for their employees.
[Neree Croteau] Yes, it’s actually a good question. My father is a business manager for a Local in Chicago and I haven’t had a chance to actually talk to him and see how things are going over there or what the unions are doing. The only thing I do know is that there are a few contractors in Illinois and in Chicago that have a prefab shop and at least some of the union workers are working in the prefab shops versus working on the jobsite. It’s a little more of a controlled environment that’s safer to work in.
[Yves Frinault] Yes. Because I see many specialty contractors right now are exposed on cash and the question, if they demobilize part of their workforce, how the government can help with unemployment — unions have a huge role to play. The question is, how fast can they ramp back up as soon as there is a bit more visibility on the situation.
[Neree Croteau] Yes, it was brought up earlier. Do we have the cash flow at that point to even get everything rolling? It’s going to be interesting. Because I am not privy to that information at the moment from my company, so I don’t really know where we stand. It’s definitely a question I have and I have been wanting to ask. Because we’re going to be there in no time, and it’s going to be a question of “can we?” rather than “will we?”
[Ray Mina] Neree, given that this is such a dynamic situation, I don’t think many people planned for a pandemic. Where are you going to get information? Where are you going to find recommendations? For getting your team organized and ready to get back on the jobsite as soon as possible?
[Neree Croteau] I am reaching out to a few of my mentors in the industry. I have some friends that work for some of the largest contractors and some of the smaller contractors all across the country. I am trying to get information on: A) How they have handled similar situations; and B) Just some of the things I am not familiar with.
This is my first experience with a force majeure-type of situation where you deal with the “act of God” clause and how do you handle that? That has been my goal, to reach out to the people that I know have some industry experience and pull from them and then implement those ideas as best I can.
[Yves Frinault] Yes. I guess it’s a good time to read your contracts and if this is not clear, talk to your partners. I know for us very often we have been able to negotiate with partners on these things that were not necessarily handled perfectly in contracts and that has been positive. It’s a good time to ask others to help right now. Good.
That was Neree Croteau from Classic Industrial Services. Thanks very much for joining us. I think you guys are probably one of the most directly impacted firms in the country right now. Almost like a full activity shutdown with direct fatalities of COVID-19 and there is a lot we can learn from that, so thanks again. Once again, we will try to keep more of those conversations going to bring a differentiated point of view to everyone.
[Ray Mina] Yes, thanks Neree, I appreciate you jumping on today. Good luck with everything.
[Neree Croteau] Thanks very much, I appreciate it.
[Yves Frinault] Thanks very much.