Their numbers have dwindled, but Chicago independents are thriving thanks to employee loyalty, lucrative projects, cooperation with colleagues and capitalizing on their niches.
by Caleb Givens and Kaija Wilkinson
Decades ago, the Chicago Yellow Pages contained two pages of independent elevator companies. Today, they take up only a fraction of a page. Although the business landscape has changed, mostly due to acquisitions by OEMs, the remaining independents are thriving as they make names for themselves nationwide as go-to sources in their various fields. They also boast loyal workforces, often having employees who have been with them for 20 years or longer. A spirit of cooperation is prevalent throughout the industry, with competitors often working together. If there is a problem, it is a good one: at times, there is too much work.
After shedding its residential elevator division in late 2014, Matot, with roots dating back to 1880s Chicago, has focused on dumbwaiters and materials lifts, with great success (ELEVATOR WORLD, August 2013). Earlier this year, the company partnered with Mitsubishi Electric’s elevator division to install 20 dumbwaiters at the new Apple headquarters in Palo Alto, California.
Describing it as a “unicorn” job in that it is both unique and profitable, Jim Piper, Matot executive vice president, observes that working with Apple ignited interest in Matot products. He explains:
“Dumbwaiters are not as flashy as commercial passenger elevators, but are, rather, essential tools. We have always produced extremely high-quality products built to outlast the life of a building, but to have someone like Apple come in and critique our fit and finishes made us look at things in a new way and drove us to become a better company. It’s a really neat project, and we’ve already seen a lot of success from it.
“One of our marketing efforts has been to speak with architects and others in the construction industry to try to convince them of the value of adding dumbwaiters to their projects. But, ‘dumbwaiter’ can be a very difficult term to market. Speaking to a 25 year old who’s never heard the term, let alone understands when, where and how it should be used, can be a huge challenge. However, when you can say, ‘These are being installed in one of the highest-tech buildings in the U.S.,’ it gets their attention and makes the sale a little easier.”
Matot’s other “unicorn” project in 2016 was for a hospital in Montreal, for which it built a trio of custom units that incorporated a significant amount of hardware. Every Veterans Health Administration hospital in the U.S. is outfitted with Matot dumbwaiters. They also serve San Quentin State Prison in California.
In June, a custom dumbwaiter with a special drip pan was being readied for shipment to an industrial manufacturing facility in Israel, where it will be used to transport chemicals. Matot has built units for U.S. Coast Guard cutters, and has shipped to Puerto Rico, Central America and Canada. Since Piper joined Matot several years ago, he says “business has been extremely steady, and last year, we had a banner year.”
C.J. Anderson & Co. President Tom Sybert says his company has been doing a lot of custom work lately:
“We have seen more building owners who have historic properties who are opting for historic and antique elevator design elements when upgrading their elevator systems. C.J. Anderson is lucky to be so close to these historic treasures located throughout the Chicagoland area, including the Gold Coast, Lake Shore Drive and Wicker Park. We’ve worked with many who have wanted cast brass fixtures similar to what was installed when the building was built.”
Stronger Than Ever
Independent elevator companies throughout the Chicago area describe similar scenarios. Chris Nowakowski, sales manager at Great Lakes Elevator Service, Inc., describes business as being as good as it was pre-recession, adding that 2016 is shaping up to be the company’s “best year ever.” Anderson Elevator Co. reports brisk business has caused it to decide against geographical expansion, at least for the time being. President Gregory Gibbs, Jr., observes: “What’s the point of leaving Chicago? There are always a lot of cranes going up. We have no reason to expand, because there is plenty of work here.”
Business has also been good for replacement-part and component supplier ECS Corp. Its growth followed a strategic rebuilding and restructuring after the company came under new ownership in 2013, notes Executive Vice President of Operations Rick Milefchik. Significant investment in inventory and equipment based around a refined product line has driven growth.
Milefchik observes, “We sold more [escalator] chain last year than the company did in the previous eight years combined.” He adds that 2014 was the best year the company ever had and that, so far in 2016, sales are up 24% compared with 2015.
To what does Milefchik credit the success? Besides the owner’s willingness to invest in the company, it has largely been a result of offering the right products to the right customers. ECS’s philosophy entails always keeping the safety of the end user in mind, forming strong customer relationships and recommending another vendor if that vendor (even if it is an OEM or competitor) is right for the job. Milefchik observes:
“There’s a lot of room in this industry sandbox for all of us to play and benefit.” Based on the orders Parts Specialists, Inc. (PSI) has been receiving from the big Chicago independents, business is “just smoking” right now, according to General Manager Glenn Duncan. “We have a truck going out to them every day,” Duncan says.
At manufacturer and distributor Quality Elevator Products, Inc., northwest of Chicago in Niles, business has surpassed its high-water mark in 2008, says Executive Vice President Joe Kawa. The company has 33 employees, 22 of whom are in the shop. Kawa says overtime is a frequent occurrence, with some of the shop employees working 60-hr. weeks.
“There’s plenty of work for us to do right now,” Kawa says. “This year’s better than last year, and hopefully that continues.”
From Chicago to the Moon, Literally
Mid-American Elevator and its partner company, USA Hoist, together employ approximately 250 people. The companies have built a reputation for delivering highly complex, specialized lift systems. Like many other independents, it is family run, with President Rob Bailey, III spending most of his time overseeing projects onsite, and his sons Cullen Bailey and Rob Bailey, IV leading Mid-American and USA Hoist, respectively.
This past year saw Rob Bailey, III spending 95% of his time at the Porsche Design Tower in Miami, for which Mid-American designed and built a trio of car elevators (EW, September 2015). Cullen Bailey observes:
“We do a lot of weird elevators – explosion proof, corrosion proof, super heavy duty, and systems with robotic interface (such as the one in the Porsche tower). We do work for all sorts of power plants and refineries. We built 80% of the elevators at Kennedy Space Center [in Cape Canaveral, Florida] over the past 25 years. The one for the Porsche tower came about as a result of getting into the robotic parking business.”
Mid-American also has major public-transit contracts, with an office in Washington, D.C., overseeing work for the Washington Metropolitan Area Transit Authority. Cullen Bailey states, “It’s a massive system, and we have done literally hundreds of escalator modernizations and installs there in the last 25 years.”
The company modernized 80% of the elevators for the Chicago Transit Authority and is in the midst of modernizing approximately 25 units for New York’s Metropolitan Transportation Authority.
On a typical day at the office, Cullen Bailey’s mobile phone rings once every 10 min. or so. Admittedly, running the family operation can be hectic at times. But, Bailey says he wouldn’t change it for anything.
See elevatorworld.com/magazine/online-extras-august-2016/ for additional photos.