Building on Fifty Years of Success
Puget Sound Steel
When most people think of American steel, they envision industry giants Pittsburgh or Bethlehem on the East Coast. However, in the Pacific Northwest, one company has remained apart from the industry giants. For over half a century, Puget Sound Steel has been proudly independent, bringing decades of experience as well as a high level of customer focus to the Seattle area and beyond. Puget Sound Steel is employee-owned-and-operated, offering a quality-over-quantity business model that emphasizes project care and success.
Puget Sound Steel traces its roots back to 1968 when steel placer Cecil Tilley headed to the Pacific to start a new fabrication company. “Back in those days, the steel mills controlled the rebar industry,” recalls General Manager Dave Haglund, noting that around that time, the steel mills began shifting from rebar installation to production.
As this happened, Tilley seized the opportunity to start an independent steel placing firm in California. But as the market evolved, he received an invitation from Bethlehem Steel to move to Washington and start a fabrication company in the Seattle area. In 1968, Puget Sound Steel was born.
From the start, Tilley employed a leadership style that set the tone for the company’s future. “Cecil was a legendary owner,” Haglund says of the man with a reputation that present employees still discus. “He really took care of his employees and had a great passion for the rebar industry.”
Upon his passing in 1999, he left the company reins to several select employees, including current president Connie Macolino. As the steel fabrication industry has consolidated over the years, Puget Sound has remained employee-owned and operated, as Haglund relates. “We’ve managed to stay the same in the same location for fifty-one years under Connie’s direction now.”
Today, Puget Sound enjoys millions in annual revenue, thanks to over fifty years of developing strong relationships with clients and steel suppliers. “We’ve been granted a franchise from the steel mills to run a business, and we take that pretty seriously,” Haglund explains frankly. “So if it weren’t for our suppliers and the relationships that we have with them, we probably wouldn’t have made it fifty-one years.”
With only twenty-five employees, Puget Sound retains the fluid, employee-centric work atmosphere founder Cecil Tilley used for decades. “Not one individual in this company takes credit,” Haglund explains. “We have, and will continue to have, a legit team environment, and the employees are – no question – the backbone of our success.”
This small size also allows a much lower communication time between Puget Sound and its suppliers and clients. It is what Haglund refers to as the ‘depth’ of the company, “that allows us to flip and turn on a dime. So when customers get into a jam, we have the ability to react more quickly than our competitors in this market.”
Thanks to these factors, Puget Sound responds fluidly and expediently to any potential crises that may arise, greatly increasing the company’s service potential. “It’s been our philosophy to be the best detailing and service fabricator in the market.”
Haglund believes Puget Sound’s smaller size has allowed it to remain competitive for fifty-one years when so many other steel fabricators have consolidated or gone out of business. “Our size is deliberate, and it’s always been our strategy,” he explains. “I think the larger fabricators have a different strategy to put tons in the market, and for us, our philosophy is putting quality tons in the market.”
As part of this strategy, Puget Sound invests in the latest technologies. Haglund admits that rebar fabrication technology has changed little, but the company has remained at the forefront of other technological innovations. Laser-based safety technologies allow its employees a greater degree of workplace safety than ever before, enhancing productivity while remaining cost-effective.
“We’re continually improving the processes, both in the office and out in the shop,” he says. On the administrative side, software such as AutoCAD and building information modeling (BIM) allow Puget Sound more precise product and cost estimates. Finally, new scanning software allows for real-time supply chain tracking. “You’ll know exactly where an order is as we’re producing it.”
But Puget Sound’s hunger for technology expands far beyond mere day-to-day operations. “We’re looking to evolve the engineering side of our business,” Haglund states. The company is now investigating cutting-edge developments in newer high-strength steel and concrete construction. “In the last five to ten years, [the market]’s been changing, probably for the first time in the last hundred.”
Despite the popularity of wooden construction, he affirms that “There’s not a better product, for sure, in a seismic market, than ours.” With these new technologies making buildings larger and more structurally-sound than ever before, concrete and rebar construction is still “arguably the most cost-effective out there.”
Puget Sound is poised to target the Greater Seattle market with steady business from Seattle-based construction firms. The company has also consistently enjoyed projects over the years from Boeing, Tacoma’s Fort Lewis, and Bremerton’s Puget Sound Naval Shipyard. But these larger entities, while better-known, make up only a small part of Puget Sound’s portfolio.
“We’ve done everything from one-ton jobs, which might be a residential foundation, to thousand-ton jobs for commercial construction,” Haglund explains. “We don’t need to build the high-profile projects that are out there, just to feed our egos. We chase work that we can manage and do a good job at and hopefully do it properly.”
Some of Puget Sound’s most recent projects include the new headquarters for outdoor recreational equipment producer REI, a major transit station in Seattle’s University District, and Seattle’s waterfront Ferris wheel, completed in 2012. Other residential and commercial projects in the area include the Bravern, a luxury apartment complex in Bellevue, and Seattle’s Four Seasons hotel. From small projects to large, Puget Sound applies its considerable expertise and customer focus to ensure quality results lasting for years to come.
An additional factor which ensures Puget Sound enjoys a steady stream of business is its status as a woman-owned business enterprise (WBE) and disadvantaged business enterprise (DBE). These federal programs ensure that, in any construction program receiving tax money, a certain percentage of the work must be completed by businesses operated by women or otherwise disadvantaged populations. Most tax-funded programs require that eight to twelve percent of the work completed by a WBE or DBE, and Haglund explains, “We check that box for the contractor.”
But Haglund admits it is Puget Sound’s loyal employees who keep the company competitive. Employee retention, he admits frankly, “is probably one of the more challenging aspects of our business.” Puget Sound takes care to create a family atmosphere, in which communication and transparency are integral to daily business operations. Further, the company provides employee healthcare plans, pensions and competitive wages. The result, as Haglund describes, is a workforce whose members have an average of twenty years with Puget Sound.
“I think there’s a pretty unique bond shared with our employees,” he says, and the company also works to build strong camaraderie outside of work. “At this company, probably down to the individual, we all want to come into work. We have a good time. We have a great business to work for.”
As effective as these retention measures may be, time and tide wait for no one. As employees retire, Puget Sound looks to have successors ready to fill approaching vacancies. “We look to backfill positions early on,” Haglund explains. “So as an employee here might be three-to-five years from retirement, we’re already looking for that succession plan and trying to get someone on board.” Thanks to its long history, Puget Sound already receives many referrals from up-and-coming professionals, streamlining the recruiting process.
Still, Haglund does not minimize the challenge of employee recruitment in steel fabrication. “We’re kind of an older industry in today’s technologically-driven world,” he remarks, and this is a particular challenge in such a technological hub as Seattle. “I think graduates probably wouldn’t look to the steel and rebar industry for their first choice of a career, so that’s certainly a challenge that we all face.”
He acknowledges that, in the end, Puget Sound must expect the unexpected in today’s rapidly changing world. “Going forward, our biggest challenge might be something we haven’t thought of yet, so our focus is going to be to do what we can, within these four walls, to keep our wheels turning.”
As Puget Sound celebrates its fifty-first anniversary, the company has its eyes set on its next half-century. Haglund admits that, like all other independent fabricators, Puget Sound has been affected by the ongoing steel tariffs, quoting a 30% to 35% increase in steel prices within the past year. But despite these recent troubles, he takes a long view.
“We’re going to continue reinvesting in the company, ensuring that we’re going to have another fifty years of business,” he pledges. “We’re a company that talks a lot about the future, and we have a succession plan at all levels, and we’d like to see our story continue. I think that, to a man or woman, we consider ourselves stewards in the industry and stewards for our employees.”