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Engineering firms, big and small, feel hit of economy

Sean Ryan
sean.ryan@dailyreporter.com

Somewhere between many and most of Wisconsin’s engineering firms have been forced to lay off workers due to the slumping economy.

Kevin Hagen, vice president of Graef, Milwaukee, and director of the American Council of Engineering Companies of Wisconsin, said engineering firms that specialize in private jobs such as housing subdivisions or commercial projects have been hardest hit.

“It depends a lot on the market people were in,” Hagen said. “Some of the firms that were heavy into land development types of work, many of them have been severely impacted.”

Ronald Klaas, president of D’Onofrio, Kottke & Associates Inc., Madison, said work has gotten so slim in the private sector that his 40-year-old company started to chase public jobs for the first time last fall.

D’Onofrio, Kottke & Associates had 24 employees at its peak in mid to late 2007, Klaas said, but the company now is down to 15.

The firm also cut employee hours. Some work three days a week, others four and the rest work five days, but don’t work overtime, he said.

“We’re doing what we have to do to survive,” Klaas said.

Small firms aren’t the only ones affected by the economy.

Officials from R.A. Smith National Inc., Brookfield, and MSA Professional Services Inc., Baraboo, said they made layoffs in recent weeks.

Chuck Stevens, director of marketing for R.A. Smith National, said the firm cut 12 technicians and three administration staffers in the past two weeks.

The technicians mostly came from the division that handles private-sector jobs, he said.

The company has 165 employees remaining.

“Credit is tough right now,” Stevens said. “So it’s hard for people who want to take on new projects or move projects forward to get financing.”

But MSA Chief Executive James Owen said public-sector work has started to dry up as well.

The company is down to 270 employees from 300 at its peak in late 2007 and early 2008.

About 70 percent of MSA’s workload is for municipalities, Owen said.

“Many of our municipal budgets have been paired,” Owen said. “Tax revenues are down.”

MSA is trying to avoid layoffs when possible, Owen said.

“We’ve been trying to retain the talent and transfer them to different offices,” he said. “Our company is in four states and Iowa has been quite busy, and also Duluth.”

Owen said the federal economic stimulus package is providing some hope for engineering firms.

More municipalities have been hiring engineering firms during the past three months because they want to get projects ready to apply for stimulus cash, he said.

However, most of the heavy engineering is complete on shovel-ready projects the stimulus money targets, Owen said, so the package likely will generate mostly surveying or construction-inspecting work.

But Owens said municipalities hopefully will start accelerating their long-term schedules and plan new projects while stimulus jobs are under construction.

“We’re hoping that they’re going to backfill,” Owen said. “Let’s hope they get some more projects on the shelf.”

Hagen said it’s unclear what effect a federal stimulus package will have on the private housing and commercial markets.

“The picture is a little cloudy there because the economic stimulus monies have not filtered through to things yet,” he said. “One would think that the transportation market would improve.”

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