Exceeding Expectations

Kern Steel Fabrication

Kern Steel Fabrications, Inc., of Bakersfield, California, is a structural steel fabricator providing services to a wide range of industries. NuSteel Fabricators, Inc. is a subsidiary company offering similar services out of Childersburg, Alabama, near Birmingham. Together, these companies provide fabricated steel products and services from coast to coast.
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Kern Steel was established in 1959 by founder Elwood Champness. Prior to being in the steel fabrication business, he had built a successful construction supply company serving contractors in his region. Eventually, Champness identified a need among his customers for steel components such as handrails and staircases. He found suppliers and, soon after, began fabricating these components himself.

In the mid-nineties, Kern Steel was given an opportunity to develop a fabricated steel heat exchanger for the oil and gas industry. This would be a large steel component designed to transfer heat away from the hot liquid pulled from the ground during a drilling operation. At the time, this was a relatively new technology that only a very few businesses were working on.

Elwood’s son Tom joined the company in 1995 and helped to develop this market, creating a new company to join the Kern Steel family of companies called Drill Cool. When Tom Champness took over ownership of Kern Steel, he hired a general manager to handle the structural side of the business so that he could focus on Drill Cool. This proved to be a fortuitous choice, because the general manager ran Kern Steel’s structural operation quite efficiently, requiring little input from Champness. He also led the company into a brand new sector that would become a significant component of its business going forward.

He began working with government and commercial airlines, developing docking stands for aircraft ground support personnel to use in safely accessing various parts of the aircraft for maintenance-related activities. These are huge stands on wheels designed to roll right up next to the aircraft for maintenance purposes. This design, fabrication and installation of these maintenance stands became a key offering of Kern Steel and remains an important part of the business to this day.

In the summer of 2015, the Vice President and General Manager who Tom had entrusted to run the structural side of the company for so many years, passed away, and new Vice President Larkin McKenzie was brought in to fill the role, having successfully helped NuSteel generate profitable backlog as the Genernal Manager at NuSteel. At the same time, business in the oil and gas market was substantially lower than in previous years due to world market conditions, limiting the opportunity for Drill Cool to supply its products and services. Tom Champness decided to downsize Drill Cool and moved over to take a more active role on the structural side of Kern Steel. Mr. Champness, Mr. McKenzie, a very talented staff and efficient shop employees take on the challenges of the difficult projects they have the good fortune to win.

The acquisition of NuSteel Fabricators, Inc. in 2012 was a strategic decision based on a plan to move some of the work that the company was doing for customers on the East Coast to a nearer facility. At the time, Kern was building a lot of aircraft ground support equipment for government clients. A majority of those projects were being shipped to the East Coast, and so Kern Steel bought the Alabama facility, NuSteel, with the intention of moving the fabrication of those projects east, greatly reducing the total cost of those projects, while increasing capacity in the Bakersfield facility.

The partnership of NuSteel Fabricators, Inc. and Kern Steel Fabrication, Inc., has proven to provide many opportunities previously unavailable to both companies. Beyond saving money on shipping heavy freight to the East Coast, NuSteel Fabricators, Inc. also offered fabrication expertise in different market sectors that increased the capabilities that Kern Steel could market, and vice versa for NuSteel. NuSteel Fabricators, Inc. specializes in the fabrication of large plate weldments such as crane girders for mill buildings, large-scale ductwork, chutes and storage tanks made out of heavy steel. Many of these projects require NuSteel to complete the fabrication assembly outside the covered shop fabrication floor due to their size.

Today the company employs roughly sixty-five shop and office people at Kern Steel, thirty-five at NuSteel, and five at the Drill Cool operation, which is starting to see new life after the temporary downturn in the oil and gas market. In the past 15 years, the company has grown significantly in terms of manpower, facility space, and, particularly, in the purchase of capital equipment. It operates a collection of state-of-the-art fabrication equipment including two robotic welding machines, a plate laser machine, a tube laser machine, and an automatic programmable plate bending machine. It also has a full line of more traditional steel fabrication equipment, such as (2) beam lines for drilling, shearing, and cope cutting, and a cambering machine.

Kern Steel also has advanced painting capabilities, equipped with (3) different blast cleaning machine to prepare steel products for liquid paint and powder coating systems. This is relatively unique for California because the Environmental Protection Agency has implemented strict permitting requirements for painting processes in California. Kern Steel’s completely enclosed booth fits up to 110-foot-long pieces that can be cleaned and coated inside, enabling the company to operate within regulations. This capability is rare for California. Kern Steel has sold painting and power coated projects to other fabricators as well as manufacturers of many products that Kern does not fabricate. Selling these sophisticated painting services in the region has generated an entirely new revenue stream for Kern Steel.

A substantial portion of the powder coating the company does is on steel pipe. “There’s a lot of water piping that goes throughout the state,” says Larkin McKenzie, “and there’s a lot of oil piping right here in Bakersfield and surrounding oil-rich Kern County. Small and large diameter pipe for many different applications are coated on the outside and often on the inside with a sophisticated paint or powder coating to provide a long lasting surface protection for the life of the pipe. They have to resist some pretty high wear and tear, and these special paints and powder coating products we apply can do that. It’s an important part of our business.”

Kern Steel differentiates itself by deliberately seeking out the more challenging work that is often passed over by other steel fabricators. It ends up with a higher chance of winning the projects with a higher potential for profitability and more interesting work that challenges the team and enhances the company’s portfolio. “We’re looking for the difficult,” says McKenzie, “the unusual and the challenging. It’s more rewarding work because of the complexity we have to overcome to be successful.”

Kern also looks for projects that are bonded, such as schools. A bonding company provides a guarantee similar to an insurance policy that will save a project if the company working on it goes out of business. Bonding is often a requirement on public school and some government projects, but it is also difficult to acquire a large bonding capacity. For a bonding company to represent a steel fabricator, the fabricator has to show a history of being very sound financially for several years. “There are not a lot of fabricators our size that are as well off as we are financially, or have as large a bonding capacity as we have,” says McKenzie, “which is a testament to the Champness leadership and vision, so that’s another market sector we look for when deciding which projects to bid on.”

The company recently delivered a difficult project for Disney on the new Star Wars expansion, for both the California and Florida projects. It was hired to build tilted-rolled box trusses for the Disney expansion in California and the structure was to provide the framework of a wrecked space ship. The work was very challenging, but the company exceeded everyone’s expectations, receiving compliments from the installer, the General Contractor in charge of the project and even construction representatives from the Walt Disney Company itself. “It was so successful that we were asked to provide some of the project components for the same feature in Florida so that it would look exactly the same as it does in California. We’re very proud of it,” says McKenzie. “It was probably one of our greatest recent accomplishments.”

Kern is currently working on a number of challenging projects, including a complicated rolled truss roof system for a soccer stadium in Portland, Oregon that the company anticipates will be even more difficult than the Star Wars project. On the airline ground support side, it is working on a four-story tail dock stand designed for performing maintenance on A320 aircraft. From it, technicians will be able to access the horizontal and vertical stabilizers as well as the fuselage.

NuSteel Fabricators, Inc. won a government project that required rolled and galvanized eight-foot-by-forty-foot steel plates with structural rebar trusses welded to one to line the inside of two concrete hangars on the island of Guam. Many fabricators did not even bid this project because of the complexity and red tape that often accompanies government work, seeing it as a concrete job, but NuSteel Fabricators, Inc. and Kern predicted that this type of project would present an opportunity without much competition and so they bid it and won it. The project was put on a short hold when an unexploded ordinance from World War II was found on the site, but the project is now back on track.

Kern Steel is a structural steel company with a unique approach. “We’re not your average fabricator,” says McKenzie. “We have very expensive equipment for doing some pretty unique fabrications and some pretty unique talent to take on some of the most challenging projects.”

Building the Next Generation

As thousands of experienced workers retire across North America every day, it is small wonder many industries are concerned about the future. It has been a decade since the oldest members of the baby boom generation started leaving their jobs, removing from the workplace decades of experience and skills that are tough to replace. The situation is so dire that, when younger workers are not available or knowledgeable enough to take over, retired staffers are often called back to work on a part-time basis.

November 15, 2019, 8:19 PM EST