Instead of competing against each other for earthmoving contracts, Pagel Construction Co. Inc. and Hoffman Construction Co. are now sharing the equipment sales market.
Pagel, based in Almond, is closing and trying to unload 21 vehicles, said co-owner Alan Pagel.
Hoffman, based in Black River Falls, is staying open but trying to sell 35 to 40 pieces of equipment from a fleet of about 140, said President Jim Hoffman.
“That’s all I’ve ever done since the day I was born,” said Pagel, 48, “and I was employed when I was 18.”
Hoffman said his company had 450 employees in 2006 but now has barely more than 100. The company is chasing jobs beyond Wisconsin, such as a mine project in Babbitt, Minn., for which Hoffman said he had six people working Wednesday morning.
Hoffman said his goal is to survive and avoid making fatal mistakes long enough for the state to approve new projects that will increase opportunities for earthwork.
“We’re not treading water any more,” Hoffman said. “We’re all underwater holding our breath and waiting to see who comes up for air. And the last one to come up for air will be the one that survives.”
The amount of earthwork on state highway contracts peaked in fiscal year 2002 with 33.6 million cubic yards moved. But the numbers declined to 13.9 million cubic yards this year.
There was a bump in work opportunities in 2009 because the state advanced projects to take advantage of stimulus money, Hoffman said. But there are not enough new projects coming down the pipeline, he said.
Road projects that involve earthwork take years to design because of land acquisitions, utility relocations and environmental permitting, Hoffman said.
“That’s a three- to five-year process to get that done,” he said, “and I hope I can hold my breath that long.”
Pagel said the stimulus opportunities weren’t enough to keep his 26-person company running. He said he would have closed the company last year if he did not owe the banks for the heavy equipment he’s trying to sell.
“All of my money is going to the bank,” Pagel said.
Hoffman said he has multiple buyers for his equipment, including one from Africa who wants to buy the whole fleet of scrapers, which are used for digging and grading.
Pagel so far has sold 10 pieces of equipment and said there is plenty of demand from foreign buyers. He said gear he used in Wisconsin will be shipped to buyers in Saudi Arabia and Pakistan.
“It’s all foreign demand,” Pagel said. “The U.S. demand has been little or nothing. There won’t be any Wisconsin contractors, that’s for sure.”