Business Influencer: Russ Batzer
Russ Batzer's family has a long history in construction in Oregon. His father started two companies, Batzer Construction and JB Steel, in Southern Oregon in the 1960s.
These days, the companies tackles jobs ranging from $100,000 to $18 million and have racked up more than 30 industry awards for their project work.
In addition to serving in a leadership role in the family business, Batzer is a recognized leader in the region's construction industry. The current vice president of the Oregon-Columbia chapter of Associated General Contractors, he'll step into the role of president for the organization next January.
Batzer recently took time out of his busy schedule to sit down with the Business Tribune to discuss the policies AGC has been tracking during the current legislative session, the organization's efforts to help build a future workforce, and how he's preparing now to settle into the president's seat next year. The conversation has been edited for brevity and clarity.
Business Tribune: Tell me about your family's businesses and your background in the construction industry.
Russ Batzer: I was born and raised in beautiful Medford, Oregon. My father started Batzer Construction … and then started JB Steel. … We had a big job down in California and the steel fabricator went belly up and couldn't finish the job. And my dad, who was a tough Minnesotan guy … in the Navy, he said, "Well, hell, we can do that," and we've been going pretty strong ever since. We're a general contractor, but we also provide subcontracting services to some of the other big (general contractors) like Hoffman, Swinerton, Walsh, Andersen.
We do something kind of unique — we provide a structural package. The biggest risk in construction really is site work, concrete and steel. Once you get past those, your risk as a general contractor diminishes. I haven't seen any other contractor provide structural concrete in a structural steel package, but that's what we do day in and day out.
BT: That probably takes a load off of the general contractors when it comes to that risk and that worry. So, you're working throughout the state?
Batzer: We're actually licensed in six states: Washington, Oregon, California, Idaho, Colorado, New Mexico, and soon to be (licensed in) Arizona, and we just follow our customers around, basically.
BT: Construction is still booming here in the Portland Metro area. What's going on down in southern Oregon?
Batzer: Oh, it's booming, just like Portland. Portland is always leading the pack as far as percentage of growth. Southern Oregon, it takes a little bit for it to slow down, and it takes a little bit for it to ramp up in the downtimes. But on a percentage basis, I'd have to look at the statistics, but we're probably within a percent and a half of what Portland is doing.
BT: AGC always keeps a close eye on the legislative sessions in Salem. What was on the organization's radar this year?
Batzer: Probably the biggest thing that we're concerned about is the raid on SAIF — the attempted raid on SAIF. What people really don't realize is that one of the few programs that Oregon is recognized for, I mean nationally, is our (worker) comp program. (JB Steel does) business in six states right now and I have a peer group that is represented in 13 states across the nation. When you look at our rates and you look at … how accidents have decreased, how the cost of workman's comp has gone down, it's kind of an anomaly. When the governor was talking about raiding the surplus of SAIF to offset some of the budgetary constraints that the state finds (itself) in, there's really no surplus in SAIF. It's their working capital.
What (people) should realize is that not one dollar has come from the state of Oregon. It's all been driven by the fees that contractors pay into this organization. And so, when you look at raiding the surplus, whose money are they really taking? They're taking contractors money and that had been paid in. They tried this early in the 1980s, and of course, it ended up in a lawsuit and they had to pay back SAIF.
BT: Oregon construction companies, in general, have made deliberate, focused efforts to improve the industry's safety, haven't they?
Batzer: Yes. You know, that's one of the things when you are a member of AGC, you basically get free consultation from (the association's) safety management consultants. The other thing is, we just want make contractors better at what they do. … If you get accepted into (the AGC's safety) program … the actual fees that you pay make, I'd say, anywhere from three-and-a-half to five times back in the retro return that you get from SAIF. So, making sure everybody goes home SAIF to their loved ones, it truly pays.
BT: The money contractors get back from SAIF if they have low worker comp claims, is that part of the surplus you're talking about?
Batzer: Yes, they set up a return. It's variable each year, depending on how well the fund of SAIF does. We get a percentage back, as a retro — what they call a rebate. It's an incentive to focus on your safety program, just to make sure that you're spreading it through the company. That it becomes, not just kind of that word of mouth but actually something that gets put into action.
It's a group policy with AGC. I think there are 683 people in there. Quite a lot of money flows through that and we take pride in keeping everybody safe. At the end of the day, we can't afford accidents, especially near fatal accidents or anything like that. If (safety is) not the top of your awareness in our industry, you'd better make it.
BT: Overall, in your role as the AGC chapter's current vice president and incoming president, how does the organization think this year's legislative session has gone?
Batzer: It's painful to look and see what's happening in Salem. I think there's just a complete breakdown of trust. Everybody's got to raise their hand and scream and yell and, and I don't know if it's always been like that, but I don't think it was. If you look back a decade or so ago, I think people were civil.
One of my good friends who just retired was a senator from Medford. He just lasted one term in the Senate. He's never really told me, but you can see it on his face. I don't know if he was disgusted or ashamed or just in a place that he just didn't want to be. And that's too bad, because whether you're a (Democrat) or a (Republican), you've got to think about what's good for Oregon.
That's what I like about AGC. We don't consider ourselves political in any way. We're trying to guide policy that affects the industry of construction.
BT: Let's move on from the Legislature and talk about Oregon's construction industry in general. What are some of the issues AGC is working on this year?
Batzer: Well, ask any contractor in the United States, and I think there's a statistic around here where … 71% of all contractors can't find skilled labor. … this has been going on for three decades, where we haven't supported Career Tech Education. When I was going to high school, eons ago, you had to go to a four-year (college) … now I see this explosion (of demand) at least in southern Oregon, and I know it's certainly been in the metro area, for auto mechanics, construction, welding — all these great things where young people can get out of high school and get a job and make beyond the living-wage income.
I know in my industry, we have a statistic here, this is through AGC … on the median blue-collar wage, construction outperforms the median by 10%. I think in the metro area … the (annual average construction income) is around $64,000 (or) $65,000; I think in southern Oregon it's about $45,000. That's pretty good, and you're not in debt, you know? My daughter just graduated from (Willamette University) and, good golly, there's some debt.
BT: Right. With a four-year degree, you usually start out your career with that debt already hanging over your head. That's not the case if you become a skilled craft worker in construction. The other thing is, if you have a skilled job in the trades, you can go anywhere in the country and get a job.
Batzer: And you can get a job quickly.
BT: There are great programs out there to introduce young people to careers in construction and the trades. Girls Build is one.
Batzer: Oregon Building Congress is another one. … when my daughter was in high school, she wanted a job and I made her apply for Oregon Building Congress. They build community service things. She was just complaining the entire summer. I said, "Just stick it out. Just stick it out." So, she graduated from Willamette, not in construction, obviously -- they don't go down that path there. So, she wants to do the Peace Corps. And when she first made the application, they turned her down and said, "You know, we're really looking for somebody with a construction background."
All of a sudden, you know, the light bulb came on (for my daughter). She was in Paraguay (with the Peace Corps) for two and a half years, and did a lot of water projects and sewer projects. Today, she works for a Portland construction company and she's doing quite well -- she's in the field of project management.
BT: So, sometimes dad does know best.
Batzer: Yeah, occasionally we think we do, but there's always debate.
Probably the least used resource in our industry are women. (At my company), we have women as project management assistants and project managers, but we've never really had women in the field. We just hired our first iron worker and she's 21, 22 and her father is an iron worker and, you know, it was pretty exciting. That's kind of the been the basis of our success is we have created a family of families. I've got second- and third-generation families working for us, so it's kind of cool.
BT: How is AGC getting in involved in that effort to help attract more young people to careers in the building industry?
Batzer: (AGC) has had a teacher externship program. It started up in Portland and we basically bring the teachers in and go through the back end of construction (with them), talk about the accounting, the risk management, the estimating, how you put all the pieces and parts together before you start building (a project).
It really started blowing the socks off of these teachers, and it's expanded to all over the state. We host a team down in Medford and we'll give them a safety round and we'll go through all the math and then we'll give them tests on estimating and they're always very excited. What that does is, it motivates them to talk about construction (with their students) and how you can use applied math and what's the importance of conjugation in a sentence (so students can see) how does this apply to me making money.
BT: You're still several months away from actually stepping into the AGC presidency. Are you already starting to look at what you'd like to focus on during your term?
Batzer: It's a work in progress. The organization itself runs pretty well. It's a tried and true formula that's nationwide. Really, my goal is to leave it as good or a little bit better than I found it. One of the things that I'm going to go to our board and is look at is getting a recruiting program. What association out there that you can think of that we'll actually pay you to be a member of? For every dollar I put into AGC, I can prove to you that I get $3.65 back and some of the companies even have a greater return. You've got to put the hours in, but you get a return back. And that in turn helps us have a large voice in Salem. It helps us support outreach programs and marketing programs. The simple goal for AGC is we just want to make contractors better. That's a lofty goal and you know, we achieve that every year.