The American Way

As the second largest metropolitan statistical area in the United States, the Los Angeles region sees an incredible number of business start-ups in any given year.

Being a gateway area for immigrants from Latin America and Asia infuses Los Angeles with an additional amount of entrepreneurial zeal.

Brothers Pepe and Jerry Galaviz are among the immigrants in Southern

Pepe had entered the construction and demolition field as a heavy equipment operator, working for smaller subcontractors and eventually Cleveland Wrecking, a sizable demolition contractor based in Covina, Calif.

In the early 1980s, Pepe struck out on his own by starting Galaviz Loader Service. He and his brother Jerry operated a loader and dump truck to perform as a subcontractor at construction and demolition sites.

In 1984, the brothers purchased the assets of American Wrecking Co., which included the critical component of a California demolition license.

As start-up demolition company owners often do, the Galaviz brothers built their business up by steps, moving from houses up to smaller commercial buildings and often serving as subcontractors to larger construction and demolition firms.

Among the firms the company served was Cleveland Wrecking, where Bob Hall worked in a management role that brought him into regular contact with his former co-worker Pepe Galaviz.

Since each admired the way the others operated, the notion of all three of them working together was eventually approached. "They persuaded me to join them in 1994," recalls Bob.

The partnership has proven to be a winning formula for American Wrecking. In the ensuing 13 years, the company has grown year-over-year while adding personnel, equipment and winning bids.

Today, Bob and Jerry estimate that the company has some 94 employees, two dozen semi truck trailers, 20 excavators, 18 skid-steer loaders, eight large wheel loaders and a fleet of nearly 30 pick-up trucks that allow site supervisors and those researching bids to visit several current and potential job sites in one day.

The company has grown in scale, but it remains driven by the vision and hard work of its three key managers.

American Wrecking has also helped its bottom line by focusing on the recycling of materials from the outset, always assessing jobs not only for the scrap potential, but also salvage and re-use possibilities.

Among the first jobs that Pepe Galaviz had in the Southern California demolition market was one involving cleaning and grading individual bricks for potential re-sale.

That practice remains very much in place at many American Wrecking job

At a demolition job site in Alhambra, Calif., a crew of four workers demonstrates how the process takes place. Bricks from a recently dismantled academic building are inspected by the workers and placed onto one of several nearby pallets.

According to Jerry Galaviz, older, darker bricks are the most valuable and are often re-used in the construction of upscale Southern California homes. In particular, bricks that carry an imprint that can help identify the origin and manufacturing timeframe are especially valued by homebuilders.

Red bricks are not the only salvageable item that American Wrecking keeps in mind. Timber and lumber that can be harvested without endangering a project’s timetable is also salvaged.

Often, this lumber is marketed through a sister company with facilities in Durango, Mexico. Importaciones Inmobiliarias Galaviz also sells salvaged steel beams and other building materials for which there is a ready market in Mexico. Bob refers to it as the "Durango Home Depot."

American Wrecking also keeps a sharp eye out for fixtures, components or machinery that may have a resale value at a given job site, such as some electrical control panels at the Alhambra site.

"Some demolition contractors don’t allow much for salvage, be we allow salvage value and credit it back to the cost of the job," says Bob. "We’ll share that information with the owner of the property or the developer—whoever is the customer."

Sharing these values is a move that can cut into quiet ways of making a profit, notes Bob, but American Wrecking has been taking that risk for 13 years "and we’ve done nothing but grow from a handful of people to what we are today," he comments.

Generally, customers understand that to recoup such salvage dollars, the bid may need to include additional time for American Wrecking’s crews to operate. But to avoid losing business because of timing concerns, when bidding the company balances out how to accomplish salvage operations with enough personnel to keep a bid’s timeframe palatable to the customer.

Thoroughly considering the estimation and bidding process is crucial, says Jerry. "That is the key—to estimate the amount of recycling you can do so you can get the job and be profitable. Upfront estimating is where this takes place," he comments.

American Wrecking also engages in the traditional recycling activities of harvesting scrap metal and crushing concrete. The company does not currently own its own crusher, as Bob says he enjoys good relationships and competitive bidding from existing crushing subcontractors.

Estimating and thinking through recycling opportunities starts out as a critical factor and remains important in follow-up site management activities. Attention to these bottom-line considerations has allowed American Wrecking to cultivate a growing number of site supervisors and managers who will play key roles in the company’s future.

For the 13 years that Pepe, Jerry and Bob have worked together, the three have established fairly clear roles within the American Wrecking organization.

A visitor to the company’s South El Monte, Calif., headquarters can see from Bob’s office—filled with organized stacks of paper, logs of bidding documents, reference guides and a computer and printer that stay very active—that administration is at the core of what keeps Bob busy.

The same visitor will have to engage in careful scheduling to even catch Pepe or Jerry at the headquarters office building. "The big success factor for us is that two of the three owners are out on the job all day long," says Bob. "They make sure it really happens and is done right."

For their part, Pepe and Jerry say they could not oversee operations as thoroughly without Bob in place to ensure bids go out and paperwork and accounting functions are managed by a trusted partner. "We’re like family," says Jerry. "I see Bob as my big brother—I have a lot of respect for him."

The three partners say their division of responsibilities has not only allowed the company to grow, but is accomplished with minimal friction. "In 13 years, we’ve never really had an argument or disagreement," says Bob.

The partnership has worked through years of impressive growth, and has been possible only with a lot of hours put in on evenings and weekends. "Jerry, Pepe and [their brother] Manuel will drive to job sites on Sunday to plan for the next week," notes Bob. "And if they’re not working on job sites over the weekend, they’re working at the yard behind our office building," he adds.

For his part, Bob stays connected on weekends via a fully functioning in-home office and a closed-circuit camera system that allows him to monitor activity at the yard and even act as long-distance security guard from his home 70 miles away in the San Gabriel Mountains.

The critical requirement has always been customer service, the trio agrees. "Work hard and be honest with the customers, and never be late on a job—because that’s going to pile up in the next job and then the next one," says Jerry regarding top priorities.

Says Bob, "Our work in the field provides our biggest return and it’s how we get repeat business. If a contract says it has to be done in so many days, we’re done. When we hit a job we hit it and get out."

A statement that American Wrecking works hard to keep in mind, according to Bob, is, "It’s not how you started the job, it’s how you finished it. You can get started on time, but that’s not the same as finishing on time."

Quality of work remains foremost as well. "We won’t leave until the customer is satisfied," says Jerry. Bob and Jerry both note that American Wrecking regularly receive calls to clean up job sites
after other demolition contractors have left them in less than ideal condition.

For the past 13 years, Pepe, Bob and Jerry have been able to work hard to help the company grow by leaps and bounds. Fortunately, that phase has also resulted in hiring and training good people who should be able to keep the American Wrecking philosophy and methodology in place when Pepe, Bob and Jerry begin backing away from their considerable workloads.

Much of that hiring has stayed within the Galaviz family. Pepe and Jerry are two of 11 siblings, and all five males are involved in the business. Additionally, sons, nephews and sons-in-law have taken on roles and responsibilities in the company.

"Of course, we plan to keep busy and secure contracts, but we don’t plan on doubling from here," says Bob. "Our goal now is to concentrate on who is going to take over. We’ve built a great company here in a short amount of time," he continues. "I believe we need to find the right people to take over each of these three positions."

One of Jerry’s sons, notes Bob, has already obtained a business degree and is working toward a second degree in construction management and engineering. "The business has become so sophisticated nowadays," says Bob, that such knowledge is necessary.

Ideally, the critical decisions about the future will be done with the same level of trust, cooperation and re-investment that has allowed American Wrecking to grow the way it has during the past 13 years.

"The three of us have never taken anything of the company other than our salaries," says Bob. "It has allowed the company to grow, and it means you don’t have to panic as much during a slowdown. We’re able to keep people busy and on the payroll during those down times."

The trust they have for each other is not only implied, but also stated. "We have complete trust in each other," says Bob. "I trust them not to do anything operationally to risk my license, and they trust me not to do anything from a management perspective that’s going to put them out of business."

The author, editor in chief of Construction & Demolition Recycling, can be contacted at btaylor@gie.net.