Stimulus fails to roll out new barrel business
They dot the borders of road projects like safety sentinels, protecting the backs of workers who have neither the time nor opportunity to watch for oncoming traffic.
They are, and probably always will be, in high demand. But, to a mixture of relief and disappointment for orange-barrel business owners, that demand is generally no higher or lower than in years past despite the massive river of federal money flowing toward roadwork.
“We look at the stimulus money, at this point in time here in Wisconsin, as really continuing the construction projects that were slated to be done without delaying them,” said John Kugel, president of Traffic & Parking Control Co. Inc., Brown Deer.
The situation is the same at Lakeside Plastics Inc., the Oshkosh-based manufacturer of “federal-mandate orange” traffic barrels and cones, said Division Manager Anne Muench. This year, Lakeside has sold between 75,000 and 80,000 barrels — drums in industry lingo because they used to be steel drums before plastic took over. That’s on par with past years’ sales levels and has kept the company employment at about 75 in Oshkosh, she said.
Muench said companies always are considering opportunities to expand, but the prospect is still too risky in a market that has done little more than stay afloat.
“It’s been good,” she said, “but you are always wondering about the next year.”
Subcontractors that line up the barrels and other traffic-control paraphernalia on highway jobs are still submitting competitive bids, meaning the workload has not increased to the point that companies are happy with what they have, said Dan Zignego, controller for Waukesha-based Zignego Co. Inc. The company is the general contractor on the project to rebuild a portion of Interstate 94 in Racine County using American Recovery and Reinvestment Act money.
“The stimulus projects, as of right now, aren’t creating more work so much as replacing work,” Zignego said.
“So I don’t think anybody right now is too stretched for equipment.”
There might not be more work, but the stimulus projects added more challenges to the barrel business, Muench said. Lakeside Plastics has had to stay sharp to keep up with the nationwide demand for barrels on stimulus contracts because every state has different rules for the width and type of reflective tape that must be on the drums, she said. The barrels sell for between $35 and $70 each, depending on the reflector and rubber base requirements.
Muench said the company has a couple thousand orange barrels on standby, but Lakeside must be prepared with barrels that have the right tape for the states with a lot of roadwork.
Muench said Lakeside’s sales staff is tracking the special stimulus project bid lettings across the country.
“Sometimes you can tell a little bit, but we don’t know exactly where necessarily all of the stimulus money has gone,” she said. “You try to predict. You try to understand.”
Kugel, whose company mostly supplies permanent road gear such as traffic signals and signs, said employment has remained steady at more than 100 people at Traffic & Parking. The infusion of stimulus money did not pump up the market, but holding steady has its advantages, he said.
“It is good,” he said, “because, therefore, we didn’t have to lay off anybody.”