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Cleve Whitener III

CEO of Lauren Engineers & Constructors
March 5, 2018

Cleve Whitener III

CEO of Lauren Engineers & Constructors

Cleve Whitener, CEO and Lauren Engineers & Constructors. Since 1984, Lauren Engineers & Constructors has been designing and constructing highly specialized facilities in the chemicals and polymers, power, oil and gas, and refining industries. Cleve has over 44 years of experience in ownership and management of engineering, procurement and construction companies. He took his B.A. at Southern Methodist in Mechanical Engineering and did graduate coursework in business administration at University of Texas at Arlington as well as Dallas Theological Seminary. In our conversation today we discuss building power plants, hunting dogs, and the problems with 5 year plans. We hope you enjoy the conversation.

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Transcription

Matt: So how long have you been in Abilene

Cleve: Let's see, 24 years.
Eric: And you grew up in Dallas, is that correct
Cleve: Yes.
Matt: Tell us a little bit about your family like, what did your father do?
Cleve: Well, my dad was an attorney and my mom was a stay-at-home mom. We grew up in the '50s and '60s so that was a different time. We, you know, moved to Lake Collins when I was eight years old. We'd lived down the coast for a little while and then we lived another close by Lake Collins, but Lake Collins was a new school. It was part of Richardson Schools, and we moved out there, we all moved there in the third grade, or before the third grade. So my mom still is lives in the same house that was, you know, 60 years ago. And dad lived there until he passed away three years ago.
Eric: So, that's kind of like typical post-war boom area, right? New developments, new schools, expanding neighborhoods eras, is that right then?
Cleve: Yeah. Very much middle class, you know, neighborhood. Difficult house was, you know, three-bedroom, 2,000 square foot, two bath-house I think, probably every house in the street was… while, they were individually built and custom homes, I think they were all just about the same. In our house, I have four brothers or, you know, four brothers and sisters. Two brothers, two sisters and for a long time my grandad, because my grandma died when we were… I guess was about 12, and my grandad came to live with us. So, in one room, I had two brothers and grandad that shared a fairly small bedroom.
Matt: All right.
Cleve: That was a different time in the US. You know, certainly we always have fine memories of childhood but I actually think that was the best time for America.
Eric: Do you remember learning anything from having your grandad live with you?
Cleve: Well, all of us learned patience. I mean, grandads, you know, especially then they were, you know, you had to be patient with him, all three of us.
Matt: There was something about intergenerational living that I find fascinating, that, it seems as though, our culture has gotten a little bit away from these days. And sometimes I mourn that we don't do that that often.
Cleve: Yeah. Well, you know, my grandparents were… my grandad was a farmer. And so, he lived on the farm, and me and my dad grew up on a farm which is pretty typical especially in Texas. You know, back in the '30s that's what people did was they farm, and so my brothers and I we spent every summer on the farm until grandad moved in with us.
Eric: And where was the farm?
Cleve: It was near Waco, Texas, you know, small farm but we didn't recognize that as kids. We had a great time. Yeah, we worked and, of course, played, and we were already used to my grandad and that we spent the summers with him and, of course, my grandma until she passed.
Matt: Yeah. So then, did your dad farm as well or what did he do for a living?
Cleve: No, he was an attorney. He went to Baylor and got his law degree and that's where I was born while he was still in law school. I don't remember that part, of course, because I was just small. I started to remember the farm well, there was a lot of fine memories of, you know, doing stuff with granddad and working. And they had a garden that was just really for their use, but it was large enough where they had a lot of extra produce. And so, we'd take it to town nearby, which is this town called Mart. We'd sell it, you know, behind the pickup, just drive around the streets selling it, and we got to keep some of the money and go get an ice cream or something, so.
Eric: Do you think spending time on the farm as a child gave you kind of a primer for wanting to understand how things work, and like the mechanical nature of things?
Cleve: Well, certainly it helped, you know, because the farm, you have to do everything.
Eric: Right.
Cleve: So, if the tractor needed fixing, you didn't call mechanic, you'd fixed it. You know, if a fence was broken you fix it, and certainly. So it was a… it's very much manual labor so you learned a lot about manual labor. So, yeah, I'd say that it certainly was a good experience from that standpoint.
Matt: And you got to keep a little bit of the money of the produce that you sold, so you learned how to enjoy the spoils of your labor.
Cleve: Yep, yeah. It wasn't much, but, yeah, you know.
Eric: What do you think your… what was your favorite job on the farm when you were a kid?
Cleve: Driving the tractor. I'd tell you the worst, a lot of times you remember the worst job. The worst job was picking cotton. You had a lot of… you gain a lot of respect for the man and woman who came to pick cotton because that was a terrible job. You know, you got your hands bloody, and we weren't very good at it compared to them. Of course, they got paid by the tow sack full of what they picked. And so, they were, you know, much better at it, but, yeah. The best job was driving the tractor either plowing or bailing hay. As a kid, you know, that was a pretty nice job.
Matt: You ended up going onto be an athlete. So, my guess is you were built strong and able to handle the manual labors, is that right?
Cleve: Yes.
Eric: About how tall and what was your weight when you were at your peak playing days?
Cleve: Well, I'm 5'11 and I weighed about 210. So, I was small for a linebacker, large for a free safety, so I played both positions. And about the same weight. I didn't put on a lot of weight when moved to linebacker.
Matt: Were you fast?
Cleve: Well, for that day in time, you know. It's a whole different game now than it was in the '60s and '70s, but...
Eric: How did you get started in football? Do you remember your very first time playing?
Cleve: Oh, sure, you know, I love athletics from the time I can remember. I had a football when I was probably four or five years old, and carried it around, and started playing organized football at about seven. You know, I played baseball too and basketball. So, you know, I mean, athletics was a big part of our growing up, there's no doubt about that.
Matt: And did your dad encourage that? Did your dad play with you?
Cleve: Oh, yeah, he was our little league coach, and then, of course, he played, you know, catch with us and he was a good athlete himself. He had gone to a school on a football scholarship at Howard Payne but the work came along and so that cuts short, because he was only there a year and then when off to Europe, got wounded and came back, and went to school and got a law degree.
Eric: Do you have kids? And did they play any sports?
Cleve: Well, I have a daughter. When she was in high school she ran track and played basketball, but she was also a cheer leader. Her talent and passion is more on the art side. She sang jazz for a good while because she was really quite good at it, but we just have one child.
Matt: Do you have like an incredibly memorably game from high school football where you were the star or something big happened?
Cleve: Yeah, we…you know, unfortunately it didn't work out well for us, but the game I remember most, we had a good team, I was a quarter back, I was the free safety. We actually went undefeated, but we didn't get out of our district because our big rivalry was McKinney High School. And we tied them six to six, we played in this terrible weather, it was muddy, kind of snow storm so neither one of us really had much offense, but we tied six to six, and, you know, there was some kind of rules back then where, you know, the winner of the district went out. And they eventually got beaten by the State champion late in a playoff. So, that game was probably the most memorable just because it was my senior year. Also played basketball, and we did win the State basketball that year so that was a pretty big deal, and along went baseball too. So, you know, Lake Collins was kind of a new school and lot of kids moved in, and so we had good athletic teams.
Eric: One of those power house up and coming schools at the time. And then a really good history and tradition since then, right? I mean, I looked at the notable alumni, and it seems there a handful of very successful football players that had been out of there.
Cleve: Yeah, no question. I think, they still do well, not quite as well as they did. Even after I left they actually did even better, won several State championships and all.
Matt: So, we're from Chicago land area, and how… you know, we've always heard these stories about how big high school football is in Texas. Is there like any way to describe or illuminate how big it actually is there?
Cleve: Two things. One is, you know, we have here in Abilene, we have two large schools, there's actually three schools total, but the two large schools are big rivals. And there's about 40,000 people…
Eric: Holy cow.
Cleve: …in that games when those two high schools play each other each year. So, you know, they're standing room only, the stadium is packed, and that didn't matter what the record is. So that will tell you one thing about high school football. And certainly, the little towns around Abilene, if it's Friday night, and, you know, you're playing out of town, especially when you're rivals, somebody could probably steal the whole town and nobody would ever know it because the town is empty. And, of course, the other town is full. And then now they have the State championship games at Jerry Jones Stadium, I guess, you know, Arlington Stadium, everybody calls it Jerry Jones Stadium. And they practically filled that up for even the small school against each… you know, that play each other, you know, they'd play those games there, and they'd televise them and, you know, big, big crowds, you know, more like colleges crowds than what you'd think high school would be.
Matt: Yeah, that's incredible. So, how did you decide to go to SMU for college?
Cleve: Oh, I went on football scholarship so that's the easy answer.
Eric: Yeah, right.
Cleve: You know, they were two or three schools that I could have gone to, and SMU seemed to be the one that was… recruited me the hardest, and it was right there in Dallas. They had a good engineering school at that time and it was really a pretty easy decision.
Matt: Okay. So, you knew you wanted to go into engineering, going in the college?
Cleve: I did, yeah.
Eric: Okay. How did you come to that decision? What made you wanna get into that field?
Cleve: Math always came really easy for me, and always liked it, and physics, and chemistry, you know, sciences were all easy. And so, you know, you were either… if you were good at that, your counselor either tells you to go in medicine or engineering, and I wasn't going to go into medicine. I hate hospitals, I always have, going to hospitals, you know, just because it's not fun. Whereas, you know, at engineering is and was. In addition to that, from the time I was old enough to get a job, I really was lucky to get a job in construction because construction paid a lot better and I really enjoyed the job, as well as I made more than anybody else, you know, my classmates, and teammates. And I was really fortunate to get that job. I showed up at this construction site… actually they were building the high school, the Lake Collins High School, a brand new school and they were building it, and I showed up to apply for a job, and one of the guys didn't show up that day, and they put me to work right there.
Matt: Oh, that's great.
Cleve: Yes, it was a good time and… because it was, as I said, a lot better job than sacking groceries or working at a gas station, I know, you guys, you don't even know that nobody pumped their own gas back then. You know, you had people who pumped your gas, and that was a common job, was either working at some, you know, grocery store or filling station or, you know, maybe a local retail store. So, construction paid about three or four times what those jobs did.
Eric: Thinking about your college career, were there any professors that really had an influence on you?
Cleve: Athletics was always a lot more important than studies. I mean, yeah, I did really well in studies, but you know, spent… each class you had a different professor, you know, you took a class and then that was it, whereas, you know, you had the same football coaches for all four years, and you spent the whole afternoon with them, every afternoon of everyday you're in campus, other than Sundays, you were down at the athletic department. So, coaches were a lot more influential than teachers.
Matt: Did you have particularly inspiring coach?
Cleve: Well, the most inspiring coach, it was Bum Phillips who, I'm sure, you guys have heard of, I know. He was SMU defensive coordinator and he really was quite a character and was bigger than life to the players, as well as… of course, he became really well known at Houston. But, you know, he's probably the most inspiring coach that I had. We had another guy named Rey Utley who was a little guy, but he was more directly my coach, he was linebacker coach. I remember, he didn't tell me this but we had a guy that was a small guy, actually ended up a good friend of mine, a little older. His dad had ran a camp in Missouri called the Kanakuk.
Eric: Oh, sure, we all went to Kanakuk.
Cleve: Okay. So, Joe White, you know, I played with Joe White at SMU. Joe, he was the nose guard, and Joe was a lot smaller that I am. I mean, he probably didn't weight 200 pounds, and so he was little. And I remember he told Rey, you know, he'd give anything to play football and nose guard, and Rey said, "Well, Joe, you'll never make it then." And, Joe, he got a look on his face, he said, "A guy like you has got to give everything. You can't just give anything," which is kind of a memorable thing, and of course, Joe ended up playing a lot. But that's something that certainly stuck with me that you can't just give anything, you got to give everything if you're gonna really succeed.
Matt: Yeah, right. And the less you have to start off with, the more you have to give.
Cleve: No question. No question.
Eric: So, Joe White is like the legend around Kanakuk. They have all these stories about him doing incredible feats of strength and...are all those true?
Cleve: I don't know. You know, I worked at Kanakuk after the last couple of years at school rather than work construction. And, of course, Joe was… he didn't have those legends then. But, yeah, Joe was a great guy, and obviously, you know, he's done really, really great things for Kanakuk and for the Lord.
Matt: Right out of college, you had a half year where you went to work, but then you did one year where you went back to seminary. Were you just kind of contemplating what you wanted to do with your future there or you just had just a break in work, and you just thought you'd go back to school for a bit or…?
Cleve: No, I was still contemplating on what I was gonna do at that point. You know, I thought it would be great… I never thought I'd be a pastor, but I thought it would be great to be a coach at a Christian school, you know, probably a small… there weren't lot of Christian high schools than there's a lot of them now. But there were lot of colleges, you know, small colleges that… and so I just thought that teaching and coaching, and teaching in a Christian school would be a good vocation, so that's really why I went back to seminary to kind of prepare for possibly doing that.
Eric: Yeah. Having it impact an in kids' lives and a form of ministry as vocation?
Cleve: Yeah, exactly.
Matt: What then led to you deciding not to do that and going into the workforce?
Cleve: Well, that's… you know, I fell in love and got married and we needed to make a living for one thing, but, you know, I always… and also, yeah, I went in seminary and while it was great, it really wasn't what I thought it would be. This construction really was very interesting to me, being a builder, you know, creating things from scratch. And so needing a job, I went and I got a job with a company called Sam P. Wallace and they were good to me and I never looked back.
Eric: What was your first job with Sam P. Wallace? Were you doing project management or...?
Cleve: I was just, you know, a field engineer. Fortunately, they also had a training program and I got in that training program. So, I had a lot of different jobs with Sam P. Wallace. They had a design group, I was in the design group for little while, I was in estimating for little while, I became a field engineer on a hospital, and then I became a field engineer on a power plant. And that really kind of excited me, building power plants, building refineries, and so that's where I gravitated in Sam P. Wallace. I worked there for 10 years.
Matt: And that was a booming time for oil and gas in general, right?
Cleve: Yeah, and power plants too. You know, there was a lot of coal power plants being built. We built a lot of plants, I moved around some building those plants. You know, the best job in construction is a project manager job. That's what I think most of the college graduates are going to construction aspire to become, at least as soon as they can. And I was fortunate to have that good opportunity. Build the Nebraska City Powerplant as a project manager, and then moved to Atlanta, eventually became the division manager and then the title of president of Wallace Power and Industrial.
Eric: I guess that that was a subdivision of Sam P. Wallace's, the power?
Cleve: Yeah. It was their industrial, you know, their power and industrial division at Sam P. Wallace.
Matt: Was there anything that led you to that area of the company in particular, the power and side of things?
Cleve: Yeah, I thought the work was most interesting. It involved a lot of engineering and construction. Sam P. Wallace, they really started out as a plumber. I mean, you know, Sam P. that's what he was, was a plumber. And they became a pretty significant mechanical contractor. And that part of the business was just a lot more appealing to me. I thought the projects were a lot more interesting, a lot more challenging, you know. There were larger projects, it's what I wanted to do. The company wanted me to go over to their automatic sprinkler system and become the manager of that, but that just didn't have much interest in me, running sprinkler pipe and installing that. I've got to use more of my engineering background, and a lot of bigger projects. You have projects that have 500-600 people and more building, so that's just a lot more appealing to me.
Eric: What do you think some of your most memorable moments were, those first couple of years working, you know, being a young guy out on a job site?
Cleve: There's no doubt that it's the people interaction. When I went to Nebraska City, the unions at that time were very strong. Unions just kinda gone by the wayside, not accepting Californian, and up along the Great Lakes and New York, you know, along the East Coast. But I got there and ran into both union BAs and union stewards, and even the general foreman. So, they lived with those union issues where, you know, for a young guy was… could have been intimidating because they try to intimidate you. But we had to walk out. I remember having meetings with the BA. My wife was teaching school there in Nebraska City. She had some kids of the pipefitters. It scared her because they were over, and said, "Your husband is gonna…he's gonna get hurt."
So, you know, but it was just threats. I didn't ever really think I was gonna get hurt but they tried to intimidate you but that was…Again, that was another time. You don't have that now. We did another job down in Louisiana that's next to… I remember because the teamsters were really strong down there then. And a guy named Jimmy Parton, who run the teamsters, and so I was running the office, and I was still at my 20s, and went down to his office to meet with him. And I told that we didn't even well up on the other jobs off to Gulf Coast and out of Baton Rouge. We have teamsters that really, you know, drove heavy trucks. But the teamsters did a lot of things down there. So, I went into his office and the first thing he did was reached to his drawer and pulled out a revolver and sat it on his desk.
Matt: Whoa.
Cleve: Just intimidation tactic and then it's all right. So, I asked him, I said, "How many teamster…?" I told him about the job and we were doing and we're building a power plant, and asked him, "So based on the manpower and all that, how many teamsters are we gonna have to hire on the job to cover all this?" And he said, "Well, I don't know." And I said, "Well, I just told you what the skill for the work." And he says, "Well, I don't know how many guy I'm gonna have on the bench, and how many guys are on the bench is how many guys are gonna work on your project." So, we actually ended up actually that not being the case, but he again were just trying to intimidate. Yeah, in those early days, unions have a lot more influence on construction than they do now.
Eric: Yeah, I'm pretty sure you couldn't get away putting a revolver on your desk these days in a union meeting. Do you remember, at the time, were you nervous and intimidated by these tactics, and just time gave you some perspective on them? Or did you have that perspective at the time, "Oh, this guy is just kinda yanking my chain here"?
Cleve: Well, you know, I never took it serious. I didn't ever think my life was actually at a threat. I wouldn't say I'd laugh, but I thought it was, you know, a bit theatrical to think much of it. Yeah, and I never was… I thought, "Well, you know, that's the way you behave and so I'll just have to behave the way we have to behave." Not that it didn't get violent, because it sometimes did. We had a job that we had to fly a helicopter in and pull the project manager, you know, off the site because the unions were outside the gates rioting, I guess you could say. So, it could get violent but that wasn't real common.
Matt: That's got to be a funny phone call to get, "All right, this is happening. We're sending in a helicopter."
Cleve: Yeah. Well, exactly. "I can't get off the site, how do I get off the site so," you know. And the sheriff and the police didn't help you back then. They were more on the union side than they were on the owner's side, the contractor side.
Eric: So, who had the helicopter?
Cleve: We rented it. We rented it from a helicopter service and, you know, got the guy out of there and then obviously you had meetings with the unions, and eventually got things squared away, and you went back to work but that took about a week to get that one squared.
Matt: Now, what type of conflict was there that would cause that type of rioting?
Cleve: Well, not doing what the unions wanted sometimes. You know, sometimes the unions were as rough on each other. I think that was the dispute about who was supposed to do the work and dispute between the pipefitters and the boiler makers as to who was supposed to do the work, and they didn't like it. Our superintendent was a boiler maker, and the pipefitters thought that he had given work to the boiler makers that were really pipefitters. Certainly, the non-union work would cost a lot. But in that case, it was just a dispute between one union and another one, and they thought we were sided with one in favor of the other.
Eric: Do you think, over time obviously, labor situation has changed, do you think we're much better off today? Or is there something that you think we're missing from a labor situation today?
Cleve: Well, you don't have that, so you're better off from that standpoint. You don't have the non-production of dealing with unions. But craft are not as skilled today as that they were. The union did train people, and workers were more skilled, productivity was better. Our estimating units are not anywhere close to what they used to be when you had skilled workers. So, you had different things to deal with. Now, you're dealing with lack of skill, you're also dealing with lack of motivation to some extent. Construction tends to be a passthrough occupation now. Whereas, it used to be, you know, if your dad was a pipefitter, you were a pipefitter, or if your dad was an electrician, you were an electrician. That's what you did and you're proud of your trade and proud of your skill, and you still have those people, but there are not very many of them. Most of them look at construction as a, "I can't get a job that I really want. And I'll go do construction for a little while."
And so, we've seen a lot of turnover in the industry which is kind of a shame because you don't have the skill level that you had. But, you know, on the flip side, you don't have to deal with the union nonsense either. In some ways, I'd rather deal with a union nonsense than the frustration of, you know, not having a workforce that's skilled.
Matt: Right. Not being able to do the work. That seems to be a common theme with a lot of the people that we've talked to recently, just kind of a labor force issue in crisis and that people see coming up in the next couple of years. What do you think a solution for that is?
Cleve: Well, that's a good question. Certainly, one solution that's happening is immigration. Obviously, our company, we can't employ anybody that don't have Social Security Number, and they'd need to have a green card if they're not a US citizen or not. But the construction industry, as a whole, especially the home building and white commercial industry, are just, you know, there's a lot of immigrants working in the industry. So that's one solution, is I do think I don't think we're gonna fix it. You know, we're not gonna fix this immigration thing. It's pretty evident that our government really don't want to fix it. Some do, but I don't think the majority do, but I do think that you gotta have to, because of the aging population, particularly in the construction industry. If you're gonna get there, you're gonna have to do something about immigration and encourage it, you know, because you're not gonna get the inner-city kids to work construction, and you're not gonna get the suburban kids to work construction for the most part. That's just a fact.
The solution is automation, that's the real solution, is just produce the need for the worker. We're doing a lot more modular fabrication, a lot more work away from the site with a stable workforce, more trained workforce, and chip in modules to the site so that you reduce the amount of labor that's required at the site. I'm not sure the industry has actually figured out the solution to that because owners are not happy with what things cost now and, of course, we're not happy with the production that we get. You train, and even that, you don't train as much as you used to. And even the non-union, you have a few non-union companies like, you know, Brown, and Roots, and Zachry, and Daniels, which became Fluor Daniels, and they trained because they had to train, but the owners paid for it. Now, owners aren't gonna pay for you to train people, and, of course, the unions train. So, I'm not sure what to… that there's a great solution. We're not gonna let foreign workers come over here from foreign countries. It doesn't appear, in big numbers, anyway.
Eric: Right. Yeah, that seems to be a theme across a lot of industries, just trying to use automation in your shop to do as much pre-fab as you can. It just seems to make a lot of sense. And as automation continues to get better and, you know, these robots can do amazing things, do whatever you can that way and see what you can do on the site.
Cleve: Well, you know, there's not a lot of automation on the site now, but that's gonna come.
Matt: Right. Yeah.
Cleve: The next generation that's accustomed to computers doing things and more accustomed to, you know, robotics and things, it will come even on the site, but you don't have a lot of it right now.
Eric: Right. Going back to some of your career timeline. So, Sam P. Wallace, that was the first job. How did the move to Comstock go? What led you there? Did they hire you away? Or did something happen at Sam P. Wallace that wanted… made you wanna leave?
Cleve: Something happened at Sam P. Wallace. You know, Sam P. Wallace was run by two guys while I was there. I mean, the Wallaces, you know, Sam P. Wallace's sons were there, Carl Wallace, who's a great guy and actually his son, Preston, and I were the same age, and we worked together. Preston worked for me actually in Nebraska City for a while, but for the most part, Sam P. Wallace is run by two guys. One named Buck Buckner, who was President, and another guy named Pete Frost, who was the Executive Vice President and COO. You know, they had two different personalities, but Pete was a real, real hard charger, and hard worker, demanded a lot of people, and demanded a lot of themselves, and then Buck was real people person, just highly ethical.
Anyway, Sam P. Wallace got involved with a guy name Gaith Pharaon, who was a Saudi Arabian, and he held part of the company. And our most profitable office was in Puerto Rico actually, and the guy in Puerto Rico, you know, was from Huston. He was a plumber, he was a Hispanic farmer from Huston. And Sam P. Wallace had that office, they never could make any money over there, and then they moved Al Rodriguez over there, and now just turn things around, it was doing great and... Anyway, Gaith Pharaon, and I know we're taking a lot of time here, but I think it's an important story for me because it made me change from Sam P. Wallace. So, anyway, Ghaith Pharaon was under investigation by the State Department because of his banking. This was in the Jimmy Carter presidency, a guy named… I think it's Bert Lance was his name, and Gaith Pharaon has some bank dealings that were under investigation.
And so he got worried that during the investigation they would uncover some type of corrupt business dealings. And he was sure that Al was doing what you do in Puerto Rico, and he was concerned that the he'd get in trouble with the investigation, it will have at Sam P. Wallace doing work in Puerto Rico, and making so much money, etc. So he fired Al Rodriguez and Buck Buckner, you know, he quit, as a result of that because, you know, he just didn't think it was right. You know, Al had been a loyal guy to him, so he just stood up for Al and quit. And it changed the company and they promoted a guy named Bob Morell who had run the Houston office, that was Sam P. Wallace's largest office, and he and I didn't see eye to eye about things at all. I was running, you know, Wallace Industrial. And he'd sent guys to a couple of our site without even telling me. Anyway, I got crosswise with him and so I quit and went looking for a job and Comstock hired me. And that was good guys and a good company and that's actually how, you know, when I got started was under Comstock. And then they got bought by foreigners and kind of the same thing happened. So I ended up starting Lauren and leaving Comstock, but...
Matt: Interesting.
Cleve: I left Sam P. Wallace just because, you know, the company changed, leadership changed.
Eric: That sounds like a formative experience for you. And did it shape the way that you viewed how company leadership should act broadly? And did that something that you took on with you to your next positions
Cleve: Well, I think Buck did, and Pete did. I mean, the combination of those two guys, they created a tremendous amount of loyalty because they gave a tremendous amount of loyalty. And so, certainly I would say, you know, those two guys, they had more influence on my management style. And Pete gave a combination that, you know, you work hard. That's I think, you know, hard work is one of the most important aspects. And Buck gave the deal that you treat people right, and you treat them with respect. And so, yeah, I'd say that those two guys had a lot of influence on what I hope we do here at Lauren. I hope we work real hard, and I hope we treat people real good, so.
Matt: What are some examples of the right way to treat people in your organization?
Cleve: Our core values, you know, are important to us, and I guess those are, you know, if you follow those examples you'll, you follow the core values, you'll treat them right. Now I assume you know a lot about this so you've probably been at our website. Aand most core values are there, but we believe that not just our purpose, but everyone's purpose, our primary purpose is to love and honor God, and serve others. We have seven core values, but I think they could be boiled down into a little shorter deal than that, that you gotta be good at what you do, you gotta be… you gotta excel. And if you do that then you'll get repeat business and that you'll have loyalty from your customers.
And then if you challenge people, promote them where they can, and encourage them, and always put them ahead of profits or anything else. And then our last core value really is about encouraging them to take risks that are responsible, but then if those don't work out, you forgive their mistakes., and as long as they are honest mistakes, they know that they're safe to take those risks. And if they succeed, they're rewarded. And if they don't, you know, they get another chance. You know, I think that's what you gotta go, you gotta challenge people, and you gotta reward them when they deserved rewarding, and if they fail, done their best, and they've done their homework, and they weren't lazy, and they weren't stupid, then you say, "Hey, that didn't work out. We're gonna forgive you and move on." So that's just key. People are what make the business fun, and they're what the makes the business successful.
Eric: Yes, yes. You have any examples or stories of having to make a tough choice because it was the right decision over a profitable choice?
Cleve: Well, over profitable choice, it doesn't necessarily had to do with people, but there are times when you're not treated right by clients and, of course, we had talked a lot about that, but that's another part of the businesses. Certainly, that labor market has changed, the dealing with the unions have changed, but customers have become more distant and more demanding. So, yeah, there's times, especially since the 2008, what I'd call…2008 changed. I think it changed our business, it probably changed America, but it certainly changed our business. And so there's been times since 2008 that we've worked for people who were not only unreasonable and dishonest, you've signed the deal and you live up to your end of the bargain. And we'd have a couple occasions that we did that, and it didn't work out so well for us financially because, you know, we ended up not doing business with honest forthright people but you still do it. And in the long run, it's the right thing to do, it really works out financially. And that really didn't matter.
Matt: Right. So, you said since 2008, owners have been more prone to kind of move the goal post in the middle of the project?
Cleve: Yeah. Owners, I think since then, but, first of all, the economic has change, and I use that because I didn't notice it before. It probably was happening before. Upper management of companies distance themselves from contractors and projects. You know, it's hard for us develop post-relationships and what I'd call friendships with senior-level people in our major customers. Now that didn't used to be the case. But now, I really feel like that they do it because they want to move the goal post as you say… you know, they're moving it with somebody that they really don't have a relationship with. So, that's a real challenge now. Unfortunately think that they're more focused on short-term profits and their own wellbeing, if will, than they are on...well, I still think most contractors in the industry are focused on.
You know, sometimes we don't have a great reputation, but I think that's undeserved, at least all the peers that I know, they're very honorable people who wanted to do a good job and don't have to shortchange anybody. But I do think that owners, first of all, they're tougher. And some of it has to do with… we're not getting projects done, own budget, and on time the way we used to. Now, the owners don't recognize they're a large part of that, but it regardless of the reason, the senior management of those companies, they really don't get involved in the reason. They just know it's not happening and they're gonna take it out on the contractor rather than looking at their own organization to see why something is not happening. I do think the business climate has changed in the last ten years.
Eric: So, you would say, obviously, relationships are very important in business. How important is it? We're from Chicago, so we're kinda northerners. How important is it being from the south, being local to getting business locally in the south? You think that's a big part of your business?
Cleve: It's still important. But I'd say, across the US, and I'd include Canada, people are pretty open. They don't just do business with a local contractor. They're open to developing relationships with others, probably less so in the US than it is in another countries. You go to India, and we've done work in India. It's a lot more important there still for sure than I think other places, that's the case, too. You know, foreigners come here and they're immediately welcomed in and compete against us, and, you know, the reverse is true when you go to another country.
Matt: All right. You transfered from Sam P. Wallace, you went to Comstock. How then did Lauren get borne out of Comstock Mechanical and then become private on its own?
Cleve: Comstock got foreign ownership, a company called SPEE a French company, acquired Comstock. And Comstock, you know, I had started Comstock Mechanical and actually had started Lauren as a non-union part because in the south, Comstock was a union company totally. But, wanted us to locate in Atlanta, and so I'd lived in Atlanta before with Sam P. Wallace. We were glad to go back there, a nice town. And we went back there. But not too long after I went to work for Comstock, they sold a part of their company to SPEE, and this SPEE management and ownership, they bought Comstock for three things. And one of those three things wasn't, you know, what we were doing, and we were doing maybe 40 or $50 million worth of business in the mechanical industrial side. And we had an office in Maine and an office in the South.
One of the main office was union, the office in the south was not a union, but SPEE was big on nuclear and they were big on mining, and they were big on transportation, and that was Comstock. That's why they bought Comstock were for those three reasons. Comstock was really involved in all the rapid transit systems, board out in San Francisco, you know, marketed in Atlanta and, of course, in New York they'd started in New York in the New York transit system. And then their Chicago office, which you guys are from, that was their nuclear power group. And they did work…you know, they did more… they were electrical contractor, and they did all the electrical work on about half of the nuclear power plants that were being built then, at that time. And then their Pittsburgh office was in the mining group. So, we weren't a fit.
And so they looked to sell us, they put us on the market, and I made an offer to buy them, to actually finance the deal. And so that's… I scrubbed up enough money to make a down payment. We had a fab shop in Chattanooga, Tennessee, Rothville, Georgia actually, but it's a suburb with Chattanooga. And we sold that fab shop to a local guy who's actually in the asphalt business, but that's really… I used the cash from the sale of that to pay the down payment because I had made a deal with them, and then now they found somebody to buy that fab shop and, you know, put some money in myself. So, that's how Lauren got started. Kept Comstock Mechanical, but we changed it to a commercial welding which was our main operation anyway. And so, we kept commercial welding until we closed it and moved everybody to Abilene.
Eric: Okay. So, at that time, when you purchased Lauren, how many employees were there?
Cleve: We had about, in terms, of course, of Maine shop was with union. So, you know, most of the employees up there were union. But we had about 15 or 20 that were commercial welding employees and we had about 15 in administrative employees in Atlanta. And we had a small office in California, and we had a small office in Texas. And then craft-wise, you know, that goes up in fab. We didn't have a big craft force, probably 100, 200 crafts is as much as we had. And then we relocated everybody to Abilene in '94.
Matt: Okay. What was the driving factor behind that decision?
Cleve: The industrial foundation in Abilene made us a pretty attractive offer. We were looking to locate an office in Texas. I had worked in Abilene back in the '70s, I had a short stint with a company called Tip It G [SP] as an engineer. That was a result of my father-in-law died, and my wife's mother lived here, and so we… you know, I left Sam P. Wallace for about a year and came back and kinda helped her through, you know, pretty tough time with… he was only 49 when he died. And then I missed the construction side of things and went back to work for Wallace. But that's sort of how we get to Abilene, we need people. My dad and I had...we had always come up to West Texas at the time.
Eric: Okay.
Cleve: Anyway, the industrial foundation us here. We moved all the people from Atlanta. We moved two guys from California. We moved several guys from Maine, and they paid for that move, and actually, financed our, you know, our building and fab shop that we relocated. So they facilitated that with a loan that got forgiven over time as we met employment requirements.
Matt: Okay. Now, you've purchased Lauren and it starting to grow. Were there any unexpected challenges or difficulties now having your own company and running your own company that you didn't foresee before?
Cleve: Well, whether I foresaw it or not, I don't remember but bonding was a huge challenge. Bonding and financing was a huge challenge, you know, banks and bonding companies, they're not out there just waiting to finance and back contractors. So, we started out without really any banking relationship or bonding capacity. That was a challenge. Cash flow obviously is probably the most important thing to a contractor anyway but it was super important to us not having any kind of bank line or anything.
Eric: Right.
Cleve: I mean, Comstock had taken care of all that. You know, over time changed that. But it took a while on your own for them to decide that you're a pretty good company.
Matt: Is there any way you would have navigated that differently? Could you go back and redo it?
Cleve: I don't think so. I don't think there was anything that you could do any different. You just weren't gonna get it. So, fortunately, I think it'd be harder to do now because it'd be harder to have owners, have relationships with owners that would trust you to do that. I had good relationships with owners and they believed in our people, believed in that we can do to work so they gave us opportunities. I think it'd be tougher now to get those same clients to take those kind of risks.
Eric: If you had to go back and give yourself like a piece of advice when you first starting your career in construction, what would it be?
Cleve: Well, I guess I'd give the advice that I heard a guy named Fred Smith, not the Fred Smith that started FedEx, but he was kind of a motivational speaker. And I remember I was at a conference, I don't remember what the conference was, and he was the speaker, and he said, you know, a young guy. I just started working for Sam P. Wallace, and he said, "Find something that you like to do and get really good at it and you'll always be needed." And I just think that's good advice, a pretty simply advice, but you need to work doing something that you like and you need to really work hard to get really good at what you do. And hopefully, that won't be something that gets totally obsolete. And certainly, so that's what I'd do. I'd advice anybody in construction, if you got to be in construction, first of all, you have to like it or if you're gonna be an engineer, you got to like it. And then work hard in getting really good at it. Don't chase money or dollars or anything. People who will see your talent would take care of you.
Matt: Right. What do you view, looking back at your career, what do you view is one of your biggest mistakes? What did you learn from it?
Cleve: After 2008, business had changed. In 2012, we spent a lot of effort, brought an outside guy in, to help us put together what we call Vision 2020, and you may see that on our website. It's still there. But we try to be like, you know, corporate America. We put together a five-year plan. That was actually was a seven-year plan, and we had all these goals and BHAGs, and we had great plan. Our management team worked at it. But I don't think we ever should've done that. When I decided to, you know, acquire Lauren and start it, and all the things, it was always a faith-based effort. It was always going before the Lord in prayer, and we'd always been really kind of… when an opportunity came, and it when it looked like a good opportunity, we'd pray about it and we'd pursue it if we thought it was the right thing to do. We had great control. It's a real different thing to… you know, one of our keys to success is, you know, keep good records. So, I'm not talking about keeping good records. I'm talking about creating a plan of what you're gonna do. That's for other companies and not for us, and I really think it got us off track, and we're now rebuilding from an effort to be something that we weren't.
Eric: And in part, because a lot of those plans and vision didn't necessarily come from your internal organic culture and core values that you had established in your mind.
Cleve: I think that's good way to put it. I think our guys were concerned that if we became what we thought we wanted to be, that we would lose those. And so I think there were some hesitancy, by the key people to say, "Are we really doing the right thing?" And, of course, others, you know, don't see it. I've said that internally to others, and some would nod in agreement, and others will say, "No, that's what companies do." But I think we're a different company. I think every company is probably different and we certainly value keeping good records. We value having good metrics. We value measuring how we're doing but in terms of saying, "We're gonna do such and such and do this and that," I just think that, for us, anyway it created the wrong focus.
Matt: That's really interesting. You can read all the business books in the world, and sometimes there's some ingrained wisdom in being who you are uniquely, and being great at the very specific things that you make you already good as a company instead of trying to compete with other people on what they're good at, and that's an interesting story. Couple of fun questions here. Do you have a favorite book you read in the last year?
Cleve: Well, my favorite book always is the Bible and I read that every day. And as far as that being a favorite book, I never get tired of reading and re-reading the Bible. I do read a lot, but I can't say one book stands out among the others, other than that one.
Eric: What is your methodology for reading the Bible? Do you have a plan that you follow or do you just kinda open it every day and go with what you open to?
Cleve: I spent a lot of times in one section. Maybe even verse by verse, meditate on it. Right now, I'm in Ephesians, before that, like I spent though, probably the last year in Psalms, and just really Psalms from about Psalms 23 to Psalms 42. Over the years, obviously, I spent a lot of time in Proverbs and Ecclesiastes and then New Testament. So, I don't skip around. But I spend a lot of time in one book. Probably, I spent two to three years in Isaiah. There's a lot of parallels with Israel in Isaiah as to what's going on in the US now, in my opinion. We're, in some ways, behaving sort of like, you know, Israel did. They got, you know, off track. Of course, they got off track a lot, as we all do, individually and otherwise.
Matt: A long narrative of a straying away and then getting back on course and straying away and getting back on course.
Cleve: Thinking about the wrong things.
Eric: If I'm traveling to Abilene next month, what restaurant should I go to?
Cleve: You got to go to Perini's, I mean, that's an easy call. It's not actually in Abilene. It's in a little town south of Abilene called Buffalo Gap. But Perini's is easily my wife's favorite restaurant. It's a steak place. Tom Perini, he's an Abilene native, a matter of fact, he grew up in a house next to where we lived. It got torn down and they're building a new one. But Tom, when George Bush was in the White House, he'd cater to the White House, his steaks and ribs. But it's pretty unique. They have a cookbook. One thing that we do because it's so good, they make these tenderloin particularly at Christmas time. They started selling them through Neiman Marcus and it turned out they had a bigger volume of business selling tenderloins at Christmas than they did the rest of the year combined. And the tenderloins are unbelievable. The way he seasons them. You can't get them in the restaurant unless you order ahead of time because it's not on the menu but Perini's, if you come to Abilene, it's in the book. One of the 50 best restaurants in Texas and all that, so that's a pretty easy call. There's nothing else in Abilene that even comes close to its food or reputation.
Matt: And what's your favorite cut of steak?
Cleve: The filet. They're known for their rib eyes and I like those too, but you know, if I go someplace I'm more likely to order the filet than a rib eye.
Eric: You mentioned bird hunting earlier. Do you still hunt?
Cleve: Oh, yeah. That's sort of my passion. One thing that my dad did. My dad, he loved to hunt and fish. And he gave us all of a love for that, but I guess me more than anybody else for whatever reason than my other two brothers, picked that up and I have a bird dogs. I have had more, actually I have six. I guess my daughter has one of them now. I'm a little bit of morning. Sunday, this weekend was the last day of quail season. It's all about the dogs. My dad was a great shot. I'm not, but one story about him, is we were out here in west Texas, we live in Dallas. I don't know if you guys are for bird hunting.
Matt: Yeah. I have a pheasant dog, We pheasant hunt up here.
Cleve: Okay. So, if you quail hunted, in the late afternoon, birds will go to roost and they roost out in the open on the side of the hill usually. And so, it was late in the day, and the dogs pointed the birds, they had just gotten on the roof, it was, you know, the sun had went down but it's pretty close. We had just this unbelievable cover rise, birds just kept getting knocked. You know, they didn't all get up at once and fly away like they normally do, I guess because they were just getting on to roost. So anyway, and this is the only time I've done it that I can think of. I actually, shot three birds, you know, and got all three, and I was really excited and I turned to dad and I said, "Get the dogs back in here. We got to pick up my three birds," and his comment to me was, he said, "We'll get your three as soon as I pick my seven." He had killed seven on the rise. He can reload his gun, and he hardly ever miss. So that was, you know, that's a quail hunting. It's all about the dogs and every one of them has a different personality and you get to… you know, I don't know, I guess you could say a dog's best friend, you know, a dog was man's best friend, and I have five, and I'm just as passionate about any of them, but they're all away from, you know, a year and a half old to 13 years old.
Eric: Yeah. What kind of dogs you have?
Cleve: Well, I have two Pointers, two Brittanys, and two short hairs.
Matt: Okay.
Cleve: And all six of them have totally different personalities, but you know, obviously the breeds tend to have their own set of personalities, but the… so...
Eric: Yeah. We have a yellow Lab that we fuzz and hunt with.
Cleve: Oh, yeah.
Matt: We do a lot more snow and cold weather hunting up here.
Cleve: Yeah, it's a…
Eric: Well, you work the dogs one right after the other or do you send them out in pairs or how do you get the dogs on a hunt?
Cleve: Pairs. Yeah, we have them hunting in pairs. Here, this year we hunt them…you know, the last two seasons before that, you know, the quail population was really diminishing, and then two seasons ago, it just came back like gang busters, and I got to where I could only put one dog down at a time because we were getting… both dogs were pointing different cubbies and you're having a hard time keeping up with them, it was... You know, you don't get many season like we had last year and the year before, but, you know, normally we put two dogs down together and I always…you know, I like to kinda put challenges. I don't know if they know they're challenging, I think dogs kind of…everybody says, they just for themselves, and to some extent that's true, but they like to please you too. But, you know, I have two females where I'll put the two females down against two males or I'll try to put two pointers against the two short hairs, or the Brittany's, you know, and we'll kind of keep a tally of which one does the best. So, yeah, we usually put two down at a time.
Matt: That's a lot of fun. What's your favorite gun to hunt with right now?
Cleve: Well, I have a 12-gauge Beretta that I probably like the best. It's over under, it's one of those… it's called a Super Light so you can carry it all day. I'm kind of a purist in that the most of the guys that hunt out of here, you know, they'd gotten old and they like to hunt out of vehicles, and I like to walk. So, we'll hunt. If you hunt with me you're gonna walk and you gonna be tired at the end of the day because you going to have covered about 15 miles of walking.
Eric: You need a light gun.
Cleve: So you need a light gun because, you know, I carry around a heavy vest because I have water for the dogs, and of course all the other paraphernalia that you have now. So, yeah, you need a light gun.
Matt: Was there anything that you wanted to add or any questions that you had or…?
Cleve: Yeah, I've noticed, you know, your last couple of question, what advice would you give about leadership and, you know, I would comment on that. My model, I think I learned more from athletics than I did from school. Obviously get the background of engineering. You couldn't be an engineer without the classroom stuff, but I think coaches, you know, there's two methods, I guess, of motivation, which you could call leadership, because leadership really is motivating people to perform at a high level, you know, at their maximum level. And, you know, you can motivate… I've had coaches who motivated by fear and, I mean, you know those coaches, who intimidate, and you're, you know… so I think people in general, fear motivation or it can freeze you. By far, the better motivation is love.
And so I do think that whether it's construction or anything else, you motivate people through encouragement and just show them, you know, genuine concern and love, respect, you know, for them, and you can do that. I mean, some people are real verbal and talk a lot, and others don't say much at all. And the important characteristic of a leader is that he really does genuinely care about other people and they know what… fear can work. And I'm not saying sometimes you don't need to really come down on somebody, but I think that can be love too. But I think, in general, you know, leadership really is about motivation and certainly the best leaders, you know, rose it, show that they care, and demonstrate that however their personality is that they demonstrate it.
Eric: With athletics being such a big part of your life, do you look for athletes to hire into your company? Do you see a quality in an athlete that is desirable for you in your company?
Cleve: We don't have a lot of athletes, but I agree with that. When I went to SMU, because there's not a lot of athletes that stay in engineering. When I went to SMU, there were about 10 that started in engineering and two of us stayed in it after the first year, because it demands more than what, at least, the, you know, the average college athlete wishes to give. So I do think they make great leaders, they'd make great managers. I wish more athletes would be engineers, but...
Matt: Do you think that's on the college coaches at some point to help the athletes stay in the programs that they've start and see something through to the end?
Cleve: Yeah. I think that's another thing that changed in the colleges now and certainly, you known, I don't even watch Pro Football anymore because I'm so disgusted with them this year. But with the college coaches now, it's just so much about winning and so much about talent, and I wonder… I don't know, but I wonder how much they really want student athletes versus they just want somebody that can, you know, run fast and strong. Certainly it doesn't seem that the, you know, there's a few coaches there where their kids still graduate, but for the most part there are bigger programs there. I don't think they're necessarily graduating their athletes as much as preparing them for the NFL.
Eric: Yeah. Let them go in the majors that don't really have a career at the end of it or they'll kinda just let them hang…
Cleve: No. And if, yes, if they don't make it in the NFL then hopefully they're gonna get a sales job because that's really, you know, all they're gonna be trained to do.
Matt: Well, this last week is kind of eye-opening for a lot of the college basketball with some of the reports of payment for players and all that type of thing that came out this past week. I mean, do you see any parallels there to business, some of the ethics behind taking jobs versus turning jobs down, versus your motivation behind the business you're running?
Cleve: Well, I think, there's a parallel in the US behind what…it goes all the way back to, I would say, you know… and I think Bill Clinton was a pretty good president, but I think he set a wrong example that, and I'm not going to blame him for it. But I do think that we, just in general, justify our ends in everything that we're less concerned about doing the right thing and more concerned about whether we get by with something. And I see that in athletics, I see it business, you see it in politics. You know, there's a general added to this that I'm concerned about, because capitalism only works when there is values and ethics.
You know, I had a business partner, a guy named Ben Malek who probably is my favorite person of all time, he was an engineer's engineer. He died of pancreatic cancer, you know, for, but he pointed that, you know, I mean, he made a statement one time and we were just in discussion, he says, "Russia will never be a world leader as long as they have no, you know, guidepost, no ethics. As long as there's corruption, then capitalism it just…it doesn't work." And I think that's true in everything. You know, if you depend on regulations and laws, and you're working to just not get cops, so to speak, or you're working to stay within the boundaries so that you don't get in trouble, you're gonna stray. Even if you're successful you're not successful. You know, I hate to point out Bill Belichik, who, a lot of people think he's the best coach ever, but I think he's the definition of, you know, "If I can get by with it then I'll do it.' And I think, that's a very dangerous place to go, and particularly in business because capitalism doesn't work if you have that attitude because it will eventually takes you down on the wrong path.
Eric: It comes back to get you, just on what timeframe, right? You maybe get away with it for a while and people tend to perceive that as success and…but eventually that falls down. And having a strong moral foundation, you know, it always serves you well, it never comes back to bite you.
Cleve: Whether that happens in your lifetime, and that really doesn't matter, it does matter though with us. I hope it we're headed in the right direction. I don't know whether we are or not. As an industry, in particular, and certainly as a capitalist environment over all, you know, I hope that we're headed that way. Certainly, instead have anything to do with construction, but just like this latest incident in Florida with the schools. Those solutions has to… have to come. First of all they have to come at a local level, you know, and they have to come with responsibility. I mean, just, you know, for instance, that sheriff down there, he doesn't seem like he's taking any responsibility for his department or his people or, you know. I'm afraid that's… and unfortunately, solutions, we're trying to legislate or regulate the solutions, and that's just not gonna, you know… it's not gonna change people. There's other things that you're gonna have to do. It has to do with business, too, because it has to do with our industry. If we don't recognize that you got to do the right thing when nobody is looking, and you got to do right thing no matter how much it hurts, how much it cost you. You know, unless you have that behind you then eventually things are gonna collapse.
Matt: Is there anything specific that you do within your company to kind of instill that mentality and those values to the people below you?
Cleve: Well, we have regular company meetings, and we do two things. We start off with prayer at every company meeting that we have, and we actually, our HR guy, you know, he has… Wednesday, that people are invited to come. We pray about meaningful things. And then, of course, you know, we have our safety topic, but I think we make sure that our people know that doing the right thing is always paramount and you'll never get in trouble here in this company if you do the right thing.