“There are other guys that are doing this, but very few,” Jerry said. “This is our real differential.”
The employees at Shapiro & Duncan are not unionized. The company employs what is known as a “merit shop.” Welding requires highly skilled workers, who can earn from $16 to $55 an hour, based on their productivity.
The company is big on productivity.
Prior to the financial crisis of five years ago, Shapiro & Duncan was awash in work. Profit margins were in the mid-teens.
“There was no pressure to perform,” Jerry said. “There was no accountability. We worked Saturdays. Whatever resources we needed, we used. That kind of ruined us.”
When the economy collapsed in 2009, Shapiro’s revenue dropped dramatically. The company took any work it could get, regardless of margin, just to keep revenue coming in.
It lost money for the first time in 2010. The company laid off 100 people.
“We were not disciplined,” Jerry said. “We wanted to keep everybody busy and tried to keep people working. We took jobs too cheaply. We went for revenue instead of profit.”
Since then, the company has become more disciplined. And the Shapiros have become fanatical about productivity, with the prefabrication plant the prime example of that ethic.
The company has put such a premium on productivity that Jerry’s 23-year-old daughter, Aubrey, has made it her mission. Every field person, from helper to laborer to foreman, is given weekly expectations.
“They have to know how much they are expected to finish that week, how many welds they have to complete, how many linear feet of copper pipe they have to get in,” Jerry said.
Just informing employees that they were being measured saved 13 percent on labor costs almost immediately, Jerry said. Every piece of job data is recorded and calculated to help find ways to save time and money.
For those who make the grade, the company pays for about half of their health care. The company also matches a portion of employee 401(k) contributions.
Shapiro & Duncan dates back to Jerry’s grandfather, Jake, who began a plumbing and heating company on Georgia Avenue in Northwest D.C. after World War II. Jake’s son, David, (who is Jerry and Sheldon’s dad) opened his own company in 1976, and added the word “Duncan” just to differentiate it from his father’s business.
Jerry joined Shapiro & Duncan in 1983 after he earned an engineering degree from the University of Maryland at College Park. That year, the company did less than $1 million in work.
Sheldon, 48, joined the company in 1989. The two split their responsibilities, with Jerry running estimating, bidding and engineering. Sheldon oversees the projects.
The company’s first big breakthrough came about a decade ago when Clark Construction hired Shapiro & Duncan to do $15 million in work for heating, air conditioning and plumbing in Georgetown University dormitories. It was double the size of anything Shapiro had done previously.
It put them on the map and, more importantly, gave them credibility with Clark.
“They took a big risk, and we performed and got it done,” Jerry said. Since then, the work has poured in.
In fact, the boring-but-profitable Shapiro & Duncan enterprise is drawing the attention of a fourth generation of Shapiros.
And the family does pay homage to the invisible Duncan in its title: the family chocolate labrador retrievers, past and present, were named Duncan and Duncan Jr.
For previous columns, go to washingtonpost.com/business.