Talking Shop with Phil Penzel of Penzel Construction

Monday, April 12, 2010
Phil Penzel is president of Penzel Construction Co. in Jackson. (Fred Lynch)

This month Penzel Construction of Jackson celebrates 100 years as a family-owned business. Phil Penzel, the fourth generation of his family to run the company, founded in 1910 by his great-grandfather Linus Penzel, talks about the company's past and shares his outlook on the future.

Q: What was it like growing up in the family construction business?

A: You could basically say that I was bottle-fed construction as a child. Back in the late '60s and early '70s, I would travel to job sites with my dad. He would sometimes stay overnight in the office trailer and it always seemed to be right next to a railroad [track]. During the day, he would take me to the job sites but I had to stay in the truck. In order to not be so bored, I would talk on the radio or honk the horn every time someone else did. Looking back on it, I don't think he was very amused. Those were long days for a kid, as you could imagine. I finally got my first chance to work on a job site during the summer of '81. I worked on a bridge job in Jonesboro, Ark. I worked right alongside the current Scott County Sheriff Rick Walter, and we remain good friends today. Before going out on that first job, I was trained by a fine fellow named Kenneth Borgfield. I think he was scared to death being the one responsible for training me, but I think he did a fine job, if I say so myself.

Q: Why did you choose to continue the family tradition and seek an engineering degree?

A: I ask this same question myself. All I knew while growing up was construction. I learned a lot while working in the summers and after school. It seemed to me that it would be easier to continue learning what I already know and am familiar with than to start all over with some other profession that I didn't know much about. I always liked a challenge, and I thought getting an engineering degree with a professional registration would complement my profession. As it turns out, one of my favorite project delivery systems is design/build projects. I am the most comfortable with this type of construction and it allows me to use my degree and expand my creativity. We have a tremendous track record with design/build projects. If someone wanted to give me any project to build that I wanted, I would ask for a heavy foundation project like a large sewer plant, a paper plant or a power plant. They are very challenging yet fun to build.

Q: What are some of the challenges of working with your relatives?

A: I'm sure there have been trials and conflicts along the way but I can't remember anything specific, so I guess they didn't amount to much. I really don't work with family members anymore except my wife, Sandy. She is a CPA and she works in the accounting department. I think we get along just fine. My office is on one end of the building and hers is on another end. We have worked together for over 10 years with hardly any conflicts. If she will admit it, once she started working with me, she discovered a whole new appreciation for my job.

All of the other family members have been bought out years ago so I don't have any problems there. I can remember that after my grandfather Carl retired, he would come to the office to borrow equipment from my dad Gene. It would aggravate him so much that he would tell me that he won't do that to me when he retires. Guess what? Gene is just like his dad -- but then again, we all knew that was coming.

Q: How has the company grown and changed through the years?

A: In the early years, my great-grandfather built many homes, churches and schools. It wasn't until the late teens, early '20s and into the '30s that he jumped into building farm-to-market roads and bridges. He continued building bridges and buildings the rest of his life. During the '70s we mainly built bridges and not much else other than the Cape Girardeau sewer plant and the Sikeston power plant foundations. When the highway program died down in the late '70s, we had to scramble to get back into building and industrial work. In the '80s, we added the ability to design and build projects and lease them back to the customer. We still do that today. Over the years, the company has sustained terrific growth by remaining diversified. Our industry is cyclical and you must prepare for the next downturn or it will take you down or even out. The company has seen the largest sales volume in its history during 5 of the last 10 years.

Q: As you look back on the past 100 years, what are some of the projects Penzel is most proud of?

A: P&G Bounty Towel expansion, KFVS television tower and the Southeast Missourian renovation. The Aquatic Center has been a lot of fun to build despite the weather. The Glennonville, Mo., combined cycle power plant and three simple cycle power plants in Holden, Mo. The Highway 65 bridge over the Osage River in Warsaw, Mo., and the bridge over Lake Taneycomo in Branson, Mo. My all-time favorite of my career has been the renovation of the historic Southeast Missourian [building]. It was very challenging to keep nine departments in operation, plus we were upgrading the facility while preserving its historical integrity. The Rust family won a state award for the historical preservation of their building and they invited me to join them in receiving their award at Jefferson City. That was quite a treat.

Q: How has the industry changed over the years?

A: I can answer this question with the good, the bad and the ugly. The good is that the available improvements in technology such as GPS and concrete additives allow us to do new and exciting things quicker. The way materials are made has greatly improved from when I started 30 years ago. Even the equipment available is more productive. The bad is that our industry has transformed itself into a cutthroat industry which has never made sense to me. There seems to be a trend of some contractors branching off into things they know nothing about, or that they are undercapitalized for. The bonding industry has greatly contributed to this negative trend. Highly leveraged contractors sometimes run their business with a "I just have to have this job" mentality. In the end, they do not make any money at all. I am not certain but is seems reasonable that this mindset comes from the need to pay off a lot of debt. The ugly is that the construction industry has become the most regulated industry in the world. This terrible trend just keeps getting worse every day.

Q: What are some of the major projects Penzel is currently working on?

A: We started the first bridge of a seven-bridge replacement package for KTU, the joint venture hired by MoDOT to replace over 570 bridges throughout the state. We are finishing up the Board of Municipal Utilities' new headquarters in Sikeston, Mo. We are nearing completion of the Family Aquatic Center and Osage Centre additions and a bridge deck replacement in McBride, Mo.

Q: What are you looking forward to for Penzel in the future?

A: I have 2 daughters. My oldest is going to school at Berklee College of Music in Boston. When she graduates, she would like to go to law school and practice law in the music industry. My youngest wants to be a Mizzou Tiger and go into the medical field as a pediatric orthopedist. In either case, it seems that the family interest in construction may end with my generation. As with old companies such as ours, there is a lot of history that any potential new owner can tap into. I feel we have an outstanding staff and when I get to the point of hanging things up, it would be my desire for some of the key employees to take the ball and run with it. It certainly would be wonderful to still have a Penzel Construction Co. another 100 years from now.

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