June 2009 Vol. 64 No. 6
Features
Michels Corp.: Making History For 50 Years
The Michels Corporation is celebrating its 50th year in business in 2009, marking its evolution from a small contractor specializing in gas pipeline construction to one of North America’s largest, multi division utility contractors.
Michels’ employees, customers, suppliers and friends will meet at the company’s headquarters in Brownsville, WI, in late June to share many stories about the company’s rich history and steady growth, the wide range of projects completed and memories of the late Dale Michels, the company’s founder and driving force until his death in 1998.
Dale Michels was working as a pipeline welder when he conceived the idea to start his own pipeline company to serve growing demand for gas distribution infrastructure. He approached his brother in law, Ted Koenigs, and Ted’s business partner, Jim Michel, to join in the new venture, and soon after Michels Pipeline Construction was in business.
Michels’ original plan was to take advantage of the need to build new gas distribution infrastructure and when that was complete to look for a new challenge.
“In the beginning, Ted and Jim thought they were just making a silent investment in the new business,” said Brian Johnson, Michels Corp. executive vice president. “But they were wrong.”
The young company quickly developed a reputation for doing every job right, on time and within budget, and customers came to Dale with projects, often difficult ones that others were reluctant to try.
Acceptable risks
“My father was a risk taker, always looking for opportunities, and he was never afraid to take on challenging jobs,” said current Michels President Pat Michels. “He would ask himself and others in the company, ‘How is the best way to do this? Is there a way to do it that no one else has tried before?’ He took jobs no one else wanted because he had confidence in himself and his people.”
An often told story by Mary Ausloos, Dale’s only secretary and present corporate office manager, illustrates the point: “One time Dale was talking to a customer on the telephone, and I heard him say, ‘Sure, we can do that, we can do that.’ I bet he said it a dozen times. Then he hung up the phone, and said, “Now, we have to figure out a way to do this.’ And, of course, he did.”
Longtime employees of Michels say Dale had an intense interest in every element of a job from planning, through construction, and to completion. As the company grew, Dale developed and maintained relationships with Michels employees and customers that resulted in strong, long lasting loyalties.
“One thing that stood out was Dale’s can do, no fear attitude and never ending drive to complete every job,” said Johnson, who joined Michels in 1981. “Dale became my mentor when I transferred to the home office in Brownsville in 1987, and every day I witnessed his can do attitude. I saw it every day. It’s the dedication and commitment to service that Michels customers continue to receive today.”
As the Michels organization has grown, it has continued to serve the pipeline industry, and its expertise has expanded the company’s capabilities to include a much broader market than most utility contractors and is active in telecommunications, tunneling, electrical power systems, wind energy, aggregate materials, paving, stone mining, and environmental services. Michels has adapted to the changing needs of its clients and taken advantage of new technologies such as pipeline rehabilitation and horizontal directional drilling.
New markets
In 1963, telecommunications was the first new market addition for the pipeline company.
“Telecommunications was a natural outgrowth of Michels’ gas distribution construction business,” Johnson said. “Wisconsin telephone companies knew of Dale and asked him if he could do buried cable construction. The key was that Dale never said no to a customer.”
Sewer, water and tunneling were added in 1970, and seven years later water construction was expanded to include construction of rural water mains, laterals and services throughout the Northern Plains states.
In 1976, Michels began producing crushed aggregates and supplying road construction and building materials for projects throughout eastern Wisconsin.
Aggregates might seem a departure from Michels’ utility base, but Johnson said they are a natural fit.
“Aggregate materials and mining were an early complementary business for Dale Michels,” explained Johnson. “He grew up in a geologically rich area, surrounded by an abundance of quarries and sand and gravel pits. It was further complemented by his knowledge and utilization of heavy construction equipment and the demand for crushed aggregates in utility and general construction. What started as two gravel pits for a sewer project has catapulted Michels into being the largest aggregate producer in Wisconsin. With aggregates came road construction and paving; vertical integrations of the aggregate mining business.”
In 1983 – 20 years after completion of its first telephone project – Michels become one of the nation’s first contractors to install fiber optic communications cable which ultimately led to the information highway that has changed how the world communicates. In order to speed installation of cable along railroad right of way, Michels designed and built cable plows mounted on rail cars.
In 1988, Michels was one of the first contractors to recognize the potential of the new technology of horizontal directional drilling (HDD). In 1996, Michels designed and built a 1.5 million pound pullback HDD unit, the Hercules 1200, at the time the largest machine of its kind. Today Michels is one of the country’s largest directional drilling contractors.
Family
It is significant that during a time when large multinational corporations swallow up successful privately owned companies, Michels remains in the ownership of the founder’s family.
“There have certainly been times when Michels has been approached by the roll-ups and other suitors hoping we would sell or become part of something larger,” said Johnson. “But quite some time ago, we reached a size of ‘critical mass’ where we looked at ourselves and those would be suitors and said, ‘Who should be buying whom?’ We reached the point where the Michels family is committed to passing this on to the next generation of the Michels family.”
In 1997, Michels expanded into the electrical market with the acquisition of Superior Electric Co., which began a series of acquisitions of selected companies to expand the company’s service and operations to a national level. Key acquisitions include Pilchuck Contractors (1999), Data Tel Communication Services (2000), Gelco Services (2004), and PCC Construction Co. and its affiliates (2005). New services also were established in the company, including Michels Drilled Foundations (2003) and Michels Wind Energy (2005), and names of several operating divisions were changed to more accurately identify their services.
To accurately reflect the scope of its business and place in the industry, Michels Pipeline Construction changed its name to the Michels Corporation in 2001.
By 2008, Michels Corp. included 14 divisions operating from the company’s headquarters in Brownsville, WI, and 14 regional locations in the U.S. and Canada. The same year, Michels Corp. ranked number 64 in Engineering News Record magazine’s Top 400 U.S. Contractors and number 172 of the largest construction firms in the world.
Brian Johnson terms Michels’ 50th anniversary a celebration of endurance, pride and success for everyone at Michels.
“For a business that has grown from one man’s simple idea to become a small Wisconsin gas distribution contractor, and then evolves into a leading North American utility contractor is a remarkable accomplishment,” said Johnson. “And that accomplishment is the result of some incredible people and very loyal, satisfied customers over the last five decades.”
Teamwork
With many milestones in its 50 year history, perhaps one of the most important occurred shortly after the company was started. Dale Michels was seriously injured while the young company was working on one of its first large projects. Without their leader, the crew didn’t waver, didn’t give up, and completed the job.
“That the new company survived Dale’s injury is a major event in Michels history,” said Johnson. “The way our employees went forward without Dale’s presence, completed the job, and carried the company forward, speaks volumes about the team members that Dale chose and the character of employees who have taken the company to where it is today.”
Indeed, the Michels family credits its employees – now numbering more than 4,000 – with a large part of the company’s success. Almost 75 percent of the company’s employees have been with the company more than 10 years.
“A good company attracts good people,” said Johnson. “We need to provide a quality workplace, a great place to work, one with challenging opportunities, state-of-the-art facilities with the right technology and tools and modern equipment, and a pay structure that rewards performance and exhibits the company’s core values.”
What about the future?
“Change,” said Johnson. “Five to six years ago, we weren’t in businesses that today represents as much as the total volume of our business then. We know that if we don’t change, we’re standing still and going nowhere. We understand that we can take our skills and apply them to a world of opportunity. Some ideas for the future are still in the planning stage, and some have yet to be discovered. We need to be adaptable; we need to think of new ways to do old things; we need to advance the technology of our businesses, we need to embrace change. We still subscribe to the belief that we can do whatever we put our hearts and minds to. We have safely stayed vertical to our business.
“My vision is that the next generation here at Michels will build on what we too have created – just as Dale Michels created it for us. The next generation has a wonderful opportunity before them.”
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