A work of Art – Art Favre has grown Performance Contractors from a merit shop born in the mid-1970s to a $760 million firm covering the industrial corridor from Texas to the East Coast.
BUSINESSPERSON OF THE YEAR
COMPANY: Performance Contractors
• Co-founded Performance Contractors, a general industrial contractor that employs about 6,500 people and earned more than $760 million in 2011
• Pledged $1.2 million to establish an endowed chair for LSU’s Department of Construction Management and Industrial Engineering
• Received LSU Greek Excellence Award, ABC Pelican Chapter Merit Shop Man of the Year award and SME of Greater Baton Rouge Marketer of the Year award
• Inducted into the LSU College of Engineering Hall of Distinction, LSU Alumni Hall of Distinction and LSU Construction Management Hall of Fame
Louisiana’s first so-called right-to-work law was repealed in 1956. But in 1975, a coalition of business interests formed the Louisiana Association of Business & Industry, which began a campaign to elect sympathetic lawmakers and to shape public opinion in favor of right-to-work legislation.
In January 1976, disputes between AFL-CIO building trade unions and independent locals erupted into violence at the Jupiter Chemical plant, then under construction in Lake Charles. One man died in the skirmish, and the incident helped galvanize anti-union sentiments among the public and their representatives at the Capitol.
That year, a right-to-work bill passed both houses of the Legislature with votes to spare, and Gov. Edwin Edwards signed it into law. Merit construction firms, promising better efficiency and more flexibility than union shops, would soon be in greater demand.
Performance Contractors, a merit shop, was born in this new environment. Art Favre and his partners started Performance in 1979; the company now employs about 6,500 people and earned more than $760 million in 2011 to rank No. 4 on Business Report‘s list of Top 100 private companies.
“We hit a window of opportunity that, in my mind, really hasn’t existed since in our market,” Favre says. “The timing was perfect for us.”
Growing up in Gulfport, Miss., Favre had no inkling of his future career in industrial construction. He was intensely interested in the design of his family’s home, built when he was a teenager, and the work of a friend’s father, who was a homebuilder.
“It’s exciting to see something go from the ground up,” he says. “It kind of set the seed in my mind as to what I wanted to do.”
Favre went to LSU to study architecture, but quickly found that he didn’t have the artistic talent to be successful. The university started a construction management curriculum during his sophomore year, and in 1972 he was among the program’s first graduates.
His classmates included future MMR Group President James “Pepper” Rutland, ISC CEO Eddie Rispone, Buquet & LeBlanc President Bill Firesheets and Turner Industries executive Frank Jeanmard, says Turner CEO Roland Toups, who taught a night class in construction technology at the time.
“They soaked up everything you threw at them,” he says. “They were an all-star bunch.”
Favre wasn’t necessarily looking for a career in the industrial world after graduation, but he joined Lurgi-Knost Engineers and Constructors in Baton Rouge because they happened to be hiring. He moved to Houston to work for Fluor Corporation, then returned to Baton Rouge to become a vice president with Universal Corporation.
He says Universal was performing a lot of work in the Middle East, and after several less-than-enjoyable overseas trips, he decided his interests lay closer to home.
“It wasn’t a lot of fun,” he says, recalling a trip to Baghdad. “You get out in the middle of the desert, with a lot of people who don’t speak English; you start to feel vulnerable.”
While right-to-work might have helped set the table for Performance, Ron White, Favre’s co-worker at Universal and his original principal partner in Performance, says the legislation to weaken unions didn’t have a sudden, dramatic impact in the Capital Region.
“Right-to-work came and went in Baton Rouge without much fanfare,” says White, who now is retired. “As far as the actual work being performed, the day it went into effect there was nothing that happened that we could tell.”
The seminal moment for Performance followed a strike by a local pipefitters union, he says, which was asking for a significant raise in the midst of a weak construction market and what already was a hostile environment between business and labor.
White says the big industrial plants broke from their usual practice of fighting even small wage increases and quickly acquiesced.
“They just threw in the towel in one week,” White says. “That meant only one thing to me: They’re going to start supporting nonunion contractors, and you’d better head in that direction.”
Universal didn’t see it that way, he says, so Favre, White and their minority partners, Brent Boé and Ron McMorris, struck out on their own.
“I was probably too stupid to know any better,” says Favre, who at the time was 29.
White and Favre had most of what they owned on the line, and they wanted to start slow and avoid overextending themselves. White says that mind-set led them to part ways with two early financial backers who wanted to go big right away.
The partners had industry contacts to call upon, but it wasn’t easy convincing the plants to take a chance on a new firm. Favre says they were selling the concept of a new, hungry merit shop, led by college-educated guys who knew how to run a safe, efficient project. And during its first few years, Performance was able to work with Dow Chemical, BASF and ExxonMobil.
“They were so fed up with the old [labor] regime, they were willing to be in a little bit more of a risk-taking mode,” Favre says, “knowing that if it was successful, the long-term payoff would be phenomenal.”
Early on, Favre and his partners just wanted to support their families and make a nice living working for themselves. But by the late 1990s, the time had come for the company’s leadership to think about expansion.
The first target was Mobile, Ala. Favre says Dow suggested an office in the Houston area, where Performance now has three locations, and Lake Charles followed soon after. Favre says the moves have worked out pretty well; when one region is down, another picks up, enabling the company to maintain growth.
“Now we pretty much have this whole industrial corridor, from Texas to the East Coast, covered,” he says. “That, to me, was a defining moment.”
Favre says his next big goal is making sure the company develops its young talent, so they’ll be ready to step up into management when the time comes. He’s been especially happy to see the company hire second-generation Performance employees, which he considers an indication that longtime workers think enough of the company to recommend it to their sons and daughters.
Favre attributes much of his success to being in the right place at the right time. Toups disagrees, however, saying Favre and the rest of LSU’s construction all-stars would have been successful at any time.