2010 marks the 40th anniversary for a company that emphasizes teamwork, growth and vision — with an empowering sense of a “What’s next?” attitude.
It’s that attitude that has made Mears Group into the successful, well respected company it is today — always seeing the big picture and how it fits into their plans. The Fluharty name is tied to horizontal directional drilling, first with Mears’ founder Herb, who ran the company for 32 years, and now with his son, Scot.
“It’s hard to believe it’s been 40 years. It’s been amazing,” says Mears’ president Scot Fluharty. “We started out very small. The key is that we have been able to add great people and people who are smart, hard-working and take on responsibility. They are what has allowed us to grow.”
And grow it has. With its beginnings as a small companion company to his father’s pipeline construction company to focus on engineering, Herb Fluharty envisioned more for his company. Over the years, he added pieces to his foundation, including entry into a little-known and, at the time, little accepted market called HDD. Today, Mears employs 600 workers.
Mears became a big player in the small and mid-size rig market, making a name for itself in the fiber-optic construction community. In 2000, Mears joined Quanta Services, allowing them the financial support to make the leap into focusing on the large diameter pipeline market at a time when most HDD contractors were struggling to keep their doors open.
Now a major cog in the large rig market, Mears’ tentacles are spread throughout North America and around the world. Once just a small shop in the tiny community of Rosebush, Mich., the Mears complex now includes six buildings on approximately nine acres. In 2007, Mears dedicated its new 15,000-sq ft training facility as the Herbert L. Fluharty Training and Test Facility, a state-of the-art, NACE-approved facility that serves as the cornerstone of a newly designed training program for employees and for rig-testing but primarily it serves its pipeline integrity division.
Always one to seek out niche markets, Mears has delved into the design-build contracting strategy that is not all that common but is increasing in HDD work. Mears sees design-build as a key part of its future.
Retired since 2002, Herb Fluharty hasn’t given up the business he led just yet. “He’s always around and is very up-to-date on what we are doing,” Scot says. “We are very excited about the future and we see a lot of unique opportunities opening up in the industries we serve.”
The seeds were planted for Mears Group history some 30 years before the company actually began to take root. Family patriarch Harold Fluharty was a welder for a West Virginia oil company and was transferred to Rosebush, during the 1940s. A young man in his 20s and itching to carve out something on his own, Harold met the woman who would become his bride, Bertha, and together raised a family in the small, agricultural community — population of 342 as of July 2009.
Harold founded the pipeline construction company Welded Construction in 1948. A companion company to Welded Construction was created in 1970, run by his son Herb, that was designed as its support organization, focusing on civil engineering and land surveying projects primarily targeting municipalities, realtors and individuals in the central Michigan area.
The company was named Mears — Management, Engineering, Accounting, Rental and Sales. Mears remained a division on Welded Construction until 1981 when Welded was sold to The Bechtel Corp., leaving Mears as its own company, continued to be run by Herb, focusing on pipeline integrity and engineering services.
By this time, Scot Fluharty had joined his father, working his way up through the company. At age 14, Scot started in the field, working summers as a laborer and equipment operator. Once out of school, he took on positions of more responsibility including construction superintendent, field operations manager and finance manager. Scot became president of Mears in 2002, having served as executive vice president since 1990.
“When I started at Mears, we had 12 employees and were doing $300,000 a year in business,” Scot reflects, pausing to note the growth since that time. “We were growing as a business so mostly those jobs I took on, I was the first one to do them. I had to create how to do those jobs.”
Today, Mears is led by Scot but two of his cousins, Jay and John Fluharty, are still involved as a general superintendent and chief consultant, respectively. Early on, Herb, Scot and John had a great partnership: Scot spent his time in the field, Herb made the deals and John focused on customer development.
“I was able to focus on the operational aspect,” Scot says. “My father was very good and focused on the business development aspects and John was focused on customer development.”
So who had the best job? Scot laughs: “My Dad and John were the guys who would make the deals and I was the guy who had to get it done. I think we each thought the other had the most fun.”
And then an opportunity to try a relatively new technology caught the visionary eye of Herb Fluharty. HDD was in its infancy and wasn’t drawing a lot of attention. But something about it piqued his business acumen and he decided to take the leap into this relatively obscure construction method.
“My dad thought it was a potentially emerging market because it was environmentally friendly and that was important to him,” Scot says. “And he saw that it had the potential to be a very nice niche market.”
Today, the company has a modern, state-of-art facility at the same site where Harold Fluharty’s small shop stood. In fact, the original building that housed his company was only recently taken down. Scot says maintaining their original location has been key to the company’s continued success. The new 15,000–sq ft training facility has added to the company’s commitment to safety and training.
“Our field operations headquarters is located where my grandfather founded us in Rosebush,” Scot says. “We believe it has been a key to our success. Most of our field employees are from the area and we continue to invest in our facilities for maintenance and training. We provide an opportunity for a lot of people who have a good, Midwestern work ethic. People are so key to the services we provide and we have a great base of people here.”
Finding the Niche
In the late-1980s, Mears was installing a specialized cable-type product underground and horizontal directional drilling, specifically the small rigs, was just starting out in the industry. “We purchased a small one, about 7,000 lbs and decided to try [HDD],” Scot says. “We felt [HDD] had the potential to be a big opportunity for us.
“At the same time, our location in central Michigan, which is an oilfield area, was going bust. There were a lot of people available who had a lot of oilfield experience and we took advantage of that experience,” he continues. “We hired a few people to start, such as Bob Stern, who are still with us today. They understood a lot about drilling and that helped us get over a big learning curve with HDD.”
He adds, “Bob [Stern] was the one who got out on that 7,000-lb rig and figured out how to use it. Today, he’s our HDD operations manager.”
Mears earned its stripes in the HDD industry installing the fiber-optic networks and mainly using smaller and mid-size rigs, such as its second rig, a 70,000-lb American Augers machine. Today, the company is a leader in large diameter pipeline work around the globe, using 16 rigs in excess of 100,000 lbs with two exceeding 1 million lbs.
How did they make the jump? The company did have a nudge from the fiber-optic HDD bust in the early 2000s. When the fiber-optic market fueled the HDD industry, larger corporations were buying up the HDD contractors to bring them into their fold. Because of its success, Mears was acquired by Quanta Services — a large company with large resources and a commitment to let Mears run itself without meddling.
When the fiber-optic market collapsed 10 years ago, Mears was hit hard like most HDD contractors. But instead of cutting its losses, the Fluhartys took the bold step of expanding into a different aspect of the HDD market: large diameter pipelines. Scot says adjusting to this market change was by far the company’s biggest challenge to overcome.
“When the fiber market collapsed, we just hunkered down and focused on our two core niches: pipeline integrity and HDD,” Scot explains. “But we got through it. The support of Quanta was imperative and it allowed us to make investments at the time when it would have been difficult to do so because of the state of the market.”
The HDD market bust created fierce competition among those operating smaller rigs. Mears added to its engineering staff and invested in technology, equipment and people to make the move to the larger work where it felt it could really expand its business. “It actually was a gradual move and we sort of migrated that way over time,” Scot says.
Early on, Mears primarily worked in the Midwest but expanded throughout the United States and Canada. Today, the company is working overseas in such places as Argentina, Brazil, and most recently southeast Asia (described by Scot as a “boom market”).
The Quanta Effect
Quanta Services acquired Mears in 2000, after the company had grown into a mid-size HDD contractor powerhouse. Three years later, Quanta merged the Mears operations with another successful family-run HDD contractor that it had purchased earlier, Tom Allen Construction. The merger of these two HDD contractors added to the Mears experience and personnel each already had. Mears was now known as Mears Group.
According to Scot, having Quanta as its parent company opened doors for the company that may not have been available otherwise and helped them weather the tough economic storms. “It has to do with the support we get from Quanta because it allows us to just focus on what we are best at and that provides opportunities for us,” Scot says. “We have that flexibility of being able to focus in challenging markets because we have that support behind us. We don’t have to get distracted with short-term setbacks.”
Mears’ timing couldn’t have been better for making the jump to large diameter work. As the HDD market has matured, the crossings have become longer, larger and more complex. “It’s a combination of a lot of things,” says Neil Smith, Mears senior vice president of the HDD division. “There’s a better understanding of the engineering, it’s more refined and the equipment is better. As an industry, we are able to do more ambitious crossings than we were 20 years ago.”
Smith joined Mears Group in 2002, having been involved in the HDD industry since 1989. He was familiar with Mears’ and respected the work the company did.
“It sounds so cliché but it’s all Herb and Scot,” Neil says. “Their vision and leadership is what’s really made the company… a vision to find these niche markets. It wasn’t luck but true intelligence to switch gears and reinvent the company. That’s quite exceptional. They are such humble people, honest, genuine and really caring of all their employees.”
Family-run businesses always have a story to tell. And over the generations, the principles that the companies are founded on continue to resonate through its future leaders. Mears is no different. The philosophy that Herb founded Mears on continues to permeate everything the company does today — some eight years after he retired.
“My dad’s philosophy is that you find good people, treat them with respect and conduct business with integrity,” Scot says. “We have followed that from Day 1 and it is what has kept us in business. Early on, my father established our guiding principles. These are core values that we apply to our business every day. I still carry a card with these principles in my wallet and all employees are educated on these.”
Mapping out its future plans, Mears looks to keep on course as the HDD market continues to remain strong for pipeline work. “The need for longer crossings keeps growing. There are so many different technologies that are in development and in trial stages that will help us get there,” Scot says. “We keep working on projects that push the envelope and we have the ability to deploy ourselves around the world with both equipment and workforce.”
Of note, two of their big HDD projects have been rewarded in back-to-back years as the Trenchless Technology Project of the Year for New Installation in 2009 and 2010, with several honored as the runner up in previous years.
Scot also notes that HDD is also entering the design-build foray and sees it as a key part of the company’s future. “It’s an exciting time to be in business,” he adds.
Sharon M. Bueno is managing editor of Trenchless Technology.