Paxton & Vierling grooms its heirs

No one takes the helm of Paxton & Vierling Steel without getting his hands dirty.

Patriarchs of the family-owned Omaha company marking its 125th anniversary this year like to toss their young heirs into the shop, which can be noisy and hot, so they learn that in business and in life nothing comes easily.

“It’s always been the family’s philosophy that if you’re going to be part of the family business you’re going to pay your dues,” said Robert Owen, the company’s chairman and CEO. “The most important part is the people and the processes at the shop, and if you don’t understand, shame on you. You can’t live in an ivory tower. ”

That’s why Owen started cutting weeds at the plant just off Abbott Drive in Carter Lake at age 13 for $1 an hour. And why his grandfather, Fred Owen, pulled Robert’s father, Edward, out of the University of Nebraska because “he was doing better drinking beer and being social chairman of his fraternity.”

“Granddad said, ‘It’s time for you to come back and go to work,’” Robert Owen said.

And it’s why Owen’s son, Tyler, who achieved a degree of success as a musician and music producer in Los Angeles, spent three years in the shop when he returned to Nebraska in 2001. He now runs a Lincoln subsidiary.

The steel business is no place for sissies.

Paxton & Vierling isn’t a steel mill, like Bethlehem Steel or U.S. Steel, which thrived during the first half of the 20th century but then declined, taking parts or entire towns down with them, as foreign countries flooded the market with cheaper products.

The Omaha company buys steel from mostly domestic mills and processes it for heavy industrial use, such as construction of Union Pacific Corp.’s downtown Omaha headquarters and a nuclear waste facility in Hanford, Wash. P&V also provides lighter steel products and specialized customization for companies such as John Deere and General Motors.

Still, the local company has endured retrenchments, retractions and recessions since its early days as Paxton & Vierling Iron Works. After a severe downturn in the 1990s that started with the previous decade’s farm crisis, the company diversified so it wouldn’t be reliant on only one kind of steel processing.

Today, it employs 150 to 180 people and had revenues of approximately $78 million in 2009, compared to sales of $29 million in 1985, its centennial year.

P&V is one of four divisions that make up Owen Industries, which has a total employment of about 400. Robert Owen, 67, has led the company since 1979 and now calls himself “chief mentor and coach.” John Sunderman is president.

On a tour of the sprawling manufacturing plant behind P&V’s corporate offices, Owen and the workers he encounters greet each other by their first names. He proudly points out the two discreet parts of the business: on one side, the fabrication operation, which makes large structural components for buildings and bridges; and on the other side, the metals service center, which fashions sheets and coils of steel into products for clients throughout the United States and some foreign countries.

“We added to our capabilities of being a steel service center and supplying processed steel to the manufacturing industry in the Midwest,” Owen said.

Good thing, too, because the Great Recession that officially started in December 2007 and continued through mid-2009 exacted a toll on businesses without a financial and operational cushion.

“We’re not out of it at all,” Owen said of the economic crisis. “Last year, our business dropped 50 percent in the service center, but the construction industry was stronger.

“The economy is coming back on the manufacturing side, but the construction industry is in for a rough two or three years.”

P&V was profitable in 2009, but sales fell by nearly half, from $145 million in 2008.

That year’s numbers were indicative of the boom. Owen said there was too much construction, too many loans, too much everything.

“There was too much easy money.

“Now banks have tightened up. We stayed with the heavy industrial market, but if we were in commercial real estate, where construction is down 40 percent from a few years ago, we’d be in trouble.”

Commercial construction will recover — it always does, Owen said — but he doesn’t see a return of the boom years.

“A return to 2006 levels is more likely, which is 20 percent to 30 percent less than the peak years of 2008.”

P&V avoided the sweeping layoffs instituted at many companies, but it did employ a coping mechanism used in a previous downtime: cutting workers’ hours to 32 from 40 per week; and reducing shifts on some jobs.

Company executives, however, did nothing to weaken the core mission of the business, Owen said. In fact, it has invested about $30 million in new equipment over the last five to eight years.

That’s the advantage of a family-owned, private company, he said. It can make decisions based on what’s best long term, not on what shareholders want today or on the next quarter’s earnings statement.

What does occasionally keep 38-year-old Tyler Owen awake is the responsibility that he says business owners have to their employees.

“We owe people security. They’ve made a commitment,” said Owen, who will represent the fourth generation of the family to head P&V.

He and his wife have three daughters and a son, so it appears probable that a fifth generation of Owens eventually will lead the company.

Lincoln Structural Solutions, which Tyler heads, is an exclusive supplier — one of a handful in the country — of goods and services to the nuclear industry.

The company decided several years ago that nuclear was the future, a decision that appears prescient given President Obama’s announcement in February of billions in federal loan guarantees to build the first nuclear power plant in three decades.

Robert Owen said it was an obvious step in the redirection of LSS.

“There were a limited number of steel fabricators and gaps in the supply chain. It was an evolution that mirrored our core philosophy — to pick and choose our customers, to be on the leading edge of industrial fabrication markets, and to understand the trends and invest in people and equipment.

“That philosophy hasn’t changed in 125 years.”

Contact the writer:

444-1050, pat.waters@owh.com

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