The Bigge picture
18 April 2008
California-based Bigge Crane & Rigging is approaching its centennial year, and yet the average age of its management team is just 41 years old. But even though they may be young, Weston and Reid Settlemier combined share many years of experience working together as a team to strengthen their company's position in the market.
Moreover, the two brothers and the three vice presidents that comprise their executive team share the same passion for the industry and for Bigge, says Weston Settlemier, president of the company.
In January, the company was set to undertake one of the most interesting and complicated lift and transport jobs the company has ever faced, the transport and installation of two 2,000 ton bridge spans on the new San Francisco Bay Bridge.
ACT recently had the opportunity to catch up with the Settlemier brothers, to discuss the state of the company since they took it over. With input from his brother Reid, Weston Settlemier answered our questions, giving us a closer look at the diverse company, and offering perspective on its past, present and future.
It's been more than a year and a half since you and your brother Reid purchased the company from your father. How has the company changed (if any) since the change in ownership took place? Is the company managed any differently?
We have seen the need to change remarkably little, which is hardly surprising considering that our purchase of the company was the culmination of a gradual process. We may still be young for the industry, I am 35 and Reid is 40, but we have been in the business for almost 30 years between us during which time we were fortunate to hold several jobs with significant responsibility and we learned the ropes from one of the greatest, our father Brock.
Last fall, Bigge announced it had acquired American Heavy Rigging & Hauling Company, located in Richmond, VA. How has this acquisition affected Bigge's business strategy?
Bigge has three primary operations: crane rental, heavy rigging and hauling, and equipment sales. For our rigging and hauling business, the acquisition of American Heavy Rigging & Hauling is very significant. Although our rigging business has been active all over the East Coast for many years, this purchase significantly strengthens our presence. Having a full service East Coast operation allows us to better serve our customers.
Our crane rental strategy is very different, however. While we compete on a national and even international level for specialized rigging work, we deliberately stay much closer to home when it comes to crane rental. However, where we do see opportunities is offering ourselves as a strategic partner for other crane rental companies around the country. We believe that we can partner with all kinds of crane and rigging companies across North America - companies with whom we don't normally do business - and provide them with the equipment and expertise to enable them to compete for jobs that might otherwise be beyond their scope. That being said, we are also happy to rent from a competitor or rent to a competitor because there are many situations where this makes good business sense. This rent-to-rent market offers our potential partners opportunities to win additional work and improve their bottom line profit.
Do you envision other such acquisitions in other parts of the country over the next year or so?
Over the past 10 years we have acquired Shaughnessy in 1996, Concord Crane & Rentals in 1997, Santa Fe Equipment in 2000, American Heavy Rigging & Hauling in 2005 and Solveson Crane in 2005. It's a dynamic business and things are always changing. For example, we started up an aerial work platform rental company in 1998 in Stockton, CA, and divested of it in 2003 when we found it wasn't quite the fit that we had anticipated.
A growing company like Bigge, with a strong balance sheet, is always going to be interested in good business opportunities, wherever and whatever they might be.
We are also very interested in partnerships where we can offer expertise to local companies.
What is the scope and focus of Bigge's operations (number of employees, locations, services offered, scope of equipment owned - i.e. fleet of cranes, trucks, trailers, etc.)?
We have 250 employees working out of locations in San Leandro and Concord in California, as well as Salt Lake City, UT; Auburn, WA; and Richmond, VA. We have approximately 200 cranes, including RTs, boom trucks, truck cranes, all terrains up to 600 tons capacity and crawlers up to 500 tons. For numbers of mobile cranes, that puts us in the Top 10 in the country.
We own 20 tractors and a few hundred over-the-road trailers. We also have 12 hydraulic gantries for rent or sale, heavy lifting hoists, girders and portable bridges up to 1,000 tons capacity. Additionally we own more than 100 lines of platform trailers, 12 prime movers and a unique inventory of other special equipment engineered and built by Bigge.
Under the Bigge umbrella is Bigge Equipment Company, which distributes new and used cranes and other equipment? What is the scope and purpose of this division?
Part of our strategy is to be a full-service crane industry enterprise, not just a rigger or a rental company. Bigge Equipment Company is a separate division, run by Reid, that covers all of our dealerships - Terex, Tadano, Liebherr Crawler Cranes, Broderson Industrial Cranes and Hydrospex gantries, strand jacks and hydraulic jacking equipment. It also includes our used equipment trading operation. Equipment Sales generates 25% of our annual volume, and in 2005 we sold more Terex cranes than any other dealer in the U.S. If you look at our website, you will see that at any given time we have between 20 and 30 different models of new cranes in stock for sale and probably more than 50 used cranes available.
The Hydrospex dealership is our newest enterprise, secured just last year. Hydrospex is a Dutch hydraulic specialist that we have learned makes the best, the most advanced and the safest hydraulic equipment that we have ever come across. To be their exclusive partner for the Americas is a tremendous opportunity for us and, with our help, we see Hydrospex making quite an impact on the market. We are extremely excited about the Hydrospex gantries. Bigge Equipment Company took a booth for the first time at the SC&RA Crane& Rigging Workshop last year to showcase the advantages of this innovative equipment. We will display again at the SC&RA annual conference at Hilton Head in April.
As brothers, you own and manage one of the largest and most diversified heavy rigging, hoisting and hauling companies in the United States. Are there particular dynamics to working together? Who does what in terms of organization, and how do you handle differences of opinion in terms of business strategy?
Sharing the same business background, we have similar business philosophies and strategic aims. We agree on most items and haven't come across a situation that couldn't be resolved. This arrangement has been key to the success of our business. We are co-owners of the group and share responsibility for all major decisions, but on a day-to-day basis, Reid runs Bigge Equipment Company, and does it very successfully.
Reid also manages the family's real estate business, which is outside of the crane and rigging industry.
What are Bigge's strengths in the markets it serves?
We combine the energy and vigor of our comparatively youthful management team with the depths of experience and expertise that comes from more than 90 years history in the business. A key market for us continues to be the power market where we have developed a wealth of experience and recruited some of the best professionals in the field. We have a subsidiary, Bigge Power Constructors, that specializes in serving the heavy lift and transportation needs of the nuclear power industry.
Since 1959 when Bigge performed the work at PG&E's Humboldt Bay Facility, the first nuclear facility in California, Bigge has pioneered, planned, engineered, developed, and fabricated specialized equipment to meet the heavy lift and transportation needs of nuclear power plants. We have planned and provided specialized transportation and heavy rigging services to every nuclear power plant in California and to 70 of the 103 power plants in the United States. Bigge Power Constructors services include nuclear head replacement, decommissioning, single failure proof hoist supply, consulting engineering, steam generator replacement, marine operations and specialized heavy transportation. For nuclear rigging and heavy rigging, we are at the forefront in the field. Many times we compete with companies on a job, but after the contract is awarded, we may rent a piece of equipment from them or they may rent a piece of equipment from us. We feel this rent to rent strategy should be embraced by the industry as generally it improves the utility of equipment and the P&L of both companies.
We also have a refinery services group that focuses primarily on servicing Northern California refineries.
Then there is our heavy construction work, where we provide cranes, rigging, custom engineered lifting solutions and transportation services for projects that range from setting bridge girders to replacing heavy components in industrial plants.
We operate the largest fleet of operated and maintained cranes in Northern California. We service the commercial construction, power and petrochemical markets from our San Leandro and Concord terminals. We also bare rent rough terrain and crawler cranes throughout the Western United States. We are committed to developing lasting relationships with local contractors focusing on adding value to their lifting needs.
That all sums up our expertise. However, I feel that our business philosophy is also a major strength.
Bigge has always been a good corporate citizen in the industry, participating in SC&RA and other organizations and being an advocate for safety? What do you see as the major concerns for the crane and rigging industry?
I believe that the larger companies in this industry, along with the SC&RA, have an obligation to keep the industry strong, and we take this seriously. A key component of this is in increasing safety, reducing risk and maximizing the profitability for the value we add to the construction industry.
I am proud of our safety record but I know it can and must always be better. Last year we had our best ever safety record, with no lost time accidents and just two OSHA recordable incidents. With more than 550,000 man hours worked, our 2005 projected TRIR (total recordable incident rate) is 0.73 and our projected EMR (experienced modification ratio) is 0.59.
As well as pushing the safety message, our industry must stand their ground financially and contractually to protect industry margins. We as an industry need to be conscientious in reading contracts, understanding our risk, protecting our insurance underwriters, and thus protecting the industry and our net worth. We are willing to bear the risk for things that are under our control but we don't believe we should let others force us to accept risk and responsibility for things which are outside our control.
The big story right now is the San Francisco Bay Bridge project. What is the history of Bigge's involvement in this project and explain how your team engineered the plan for lifting and putting into place the first transition span, linking the concrete skyway bridge deck section with the yet-to-be-built suspension bridge?
Our involvement with the new Bay Bridge began with erecting 15 tower cranes and selling equipment to contractors working on the project. We have been actively involved in the heavy equipment specialized lifts as well. We also won the contract to transport and install a pair of 2,000-ton bridge deck sections that measure 200 feet long by 85 feet wide.(See the Site Report detailing the transport of these spans on page 30.)
For the lift itself, we devised a solution based on strand jacks operating from a Bigge-engineered lift system. A barge-mounted crane would not have had the required stability to place the tubs precisely enough and there isn't a crane in the world that you could set up on the deck, reach out and lift 2,000 tons.
For this project, you are using lifting technology that has never been used in bridge construction on a scale of this magnitude. How did you assure that your plan would work and what types of models did you use to develop this plan to assure it is/was fool proof?
From the beginning, we recognized the benefi ts of strand jacks over any other lifting equipment for this job and, in an effort to provide the most competitive pricing to the contractor, we utilized our existing equipment inventory of modular girders. Following the contractor's guidelines, we upgraded our inventory of strand jacks to the Hydrospex brand because of their advanced capabilities.
Precision movement was critical and the computer control and safety features offered by Hydrospex made them the only choice. Concurrently, we also applied our existing girder inventory to the job application and began the intensive process of the critical load cases which the girders could see. This required some minor improvements to the girders. All of our engineering has been evaluated by three parties - Bigge, the contractor and an independent engineering firm. After a complete evaluation and revised engineering, the lift system was qualified and tested on site to 115% of the expected worst case load scenario.