Ahead of the Game and Poised for Success
Northwest Excavating is sixty this year, and it has never been stronger. It has also been over a year since Robbie Groff took over as President from his father who built the company. This has not been without a few hurdles, as emissions standards in California are quite stringent. However Northwest Excavating is back on track after investing in new equipment and upgrades.
While there certainly is competition, Northwest Excavating has positioned itself to be working on various projects and has acquired a few new developers to help along the way. Finding trained workers is always an issue, but the company knows how to squeeze as much out of the union as possible. We also discovered a little about the company’s culture in talking once again with Robbie Groff.
When we first spoke to Robbie last year, he was going through a life-changing transition, taking the reins of the company his father built. It was a fairly smooth transition, as he had been preparing for that position for over twenty years.
Work within the underground division of the company remains at an all-time high, and behind Robbie’s lead the company got back in the black after suffering through nine months of losses in the rental department.
“I’ve learned the position reveals the challenges involved a little more every day. I have discovered that you must grow into the position. You need to reach the point where the job becomes you, and you become the job to achieve the company goals, and it is working out. That would be my assessment of the first year,” says Robbie.
Wildfires are becoming the new norm in California. However, this unfortunate circumstance has benefits from a business standpoint. “It’s not bad for business going forward, but not the way I want to gain work. The climate change we are living through gives us more work on our operated equipment rentals as we undertake jobs for the county, maintaining its properties,” says Robbie.
The Woolsey fire in Los Angeles County began in November of 2018 and caused the evacuation of close to 300,000 people, destroying close to 100,000 acres of land. Northwest Excavating did a lot of work there and in Ventura County to keep one of the crucial highways systems operational right down to the ocean.
“Climate change entered into our lane, and we are doing our part,” says Robbie.
California was one of the pioneers in setting standards for how a wide area, with a large population, goes about dealing with emissions. There was quite the upheaval in the industry in the beginning, but the regulations have been in effect for ten to eleven years now, and people are starting to see the wisdom behind the stringent standards.
Northwest Excavating company has been poised to take it on from the beginning and is presently not only complying but is at the forefront of the movement. Robbie takes pride in that, and since there have not been any new standards initiated, the company is in a very advantageous place.
“We have always known the milestone dates, and the last one is in 2023 for on-road standards. The off-road standards come into play a little earlier. We made our money back from the upgraded equipment investment purchased to meet those emissions standards. We take the money from gear sold and roll those proceeds into new equipment. We have made that money back,” says Robbie. What makes this feat even more impressive is that it happened without any tax relief or incentives from the state or federal governments.
One of the new pieces of equipment acquired is the Cat Dozer D8T, with a Tier 4 compliant engine. That is now the flagship piece of the fleet along with sixteen backhoes that are also all Tier 4. Everything is coming together and working out better than Robbie imagined as the company got closer to the carbon compliance standards.
“I was pretty aware of what we were doing. I didn’t look at the numbers until I got in this chair and started analyzing them. I realized we were in a good position,” says Robbie.
Northwest Excavating has been fortunate in having the necessary resources to revamp its fleet to be carbon compliant. The company has a relatively small fleet, but the big grading contractors that make up the competition will be dealing with a great deal of adversity as time goes on. These companies have loads of gear to replace.
“They have the old gear and are still working on it. It’s probably ten to fifteen years old and not compliant. At some point they are going to have to get rid of some gear and won’t be able to afford $1 million on a scraper or a dozer,” says Robbie. These grading contractors will likely look to equipment rental companies more in the future rather than make the large investment necessary.
Northwest Excavating has been on an upward trajectory since the recession, and the volume of work is the biggest Robbie has seen in the last twenty years. The company is further helped by the fact that there are no new players in the industry.
“Even with the Olympics on their way in 2028, I am always mindful of the next recession and how we will weather such an event. We are on a ten-year growth swing, and what comes up, at some point, will come down. I have to always make sure that I am looking ahead and keeping my ear to the ground politically and economically,” says Robbie.
A few developers have been added to Northwest Excavating’s growing client list of local and national builders like real estate development firm Onni Group, based out of Vancouver, Canada and Suffolk, is a nation-wide builder from the U.S.
Being unionized gives Northwest Excavating the chance to acquire better builders and field employees. However, the national unemployment rate has been under five percent over the last three to four years. Couple that with local construction employment expected to grow by seventy percent from last year, and you have a recipe for difficulty in gaining more trained workers.
“We have a desire to obtain the best roster of workers available for our clients. We have boots on the ground looking in the field for potential candidates and trying to use our resources available to us to the maximum,” says Robbie. The company calls the union hall and works to squeeze what it can for talent.
The culture at Northwest Excavating is based on care that influences every action the company undertakes. That care and the quality of equipment gives it an advantage, which brings in qualified employees and customers. Everything flows from there.
“Our average tenured employee, regardless of position, runs close to fifteen years. Everyone in my office has at least ten years of dedicated service under their belts. We have people in the field that have been with us since the early eighties,” says Robbie.
“California is building, and we are building with it, which keeps everyone in the company busy. We are not growing due to fluctuations in the construction industry as far as the demand goes. As a utility company, you can never get too big. You have to be rational about your growth,” says Robbie.