By Benjamin Minnick
Journal Construction Editor

A well-known name in mechanical contracting has resurfaced in the Northwest - MacDonald-Miller.

Once a piece of the faltering Encompass empire, MacDonald-Miller was bought back on Dec. 31 by President Fred Sigmund and Steve Lovely, Executive Vice President of Operations. The newly formed company operates as MacDonald-Miller Facility Solutions.

In addition to Sigmund and Lovely, the new MacDonald-Miller is led by Gus Simonds, Executive Vice President of Market Development, Jack Cheetham, Executive Vice President of Technical Services, Gary Kuhlman, Executive Vice President of Quality Assurance, and Tyler Kopet, Chief Financial Officer. Together, the six-some has more than 100 years of experience.

"I think we will be stronger because of our experience with Encompass," Kopet said. "It's good to be back and a local company again."

In November 1997, MacDonald-Miller was acquired by Group Maintenance America, which merged in January 2000 with Building One Services to become Encompass.

Encompass became huge. At one point, it was a $4 billion contractor with about 40,000 employees nationwide. It grew quickly and took on a high debt load, a precarious position to be in when the economy tanked. Encompass in November filed for Chapter 11 bankruptcy. When you get to a certain size, Sigmund said, there are a lot of efficiencies left to slim own. "Encompass was profitable for some time."

MacDonald-Miller is taking over the regional mechanical contracting business from Encompass. The electrical business was bought on the same date by Sequoyah LLC of Redmond, which operates as Sequoyah Electric and Sequoyah Network Services. Its president is Dave Nichols.

Kopet said Encompass' Pacific Northwest region did $155 million in volume, of which $115 million came from mechanical and $40 million from electrical jobs. On the mechanical end, there are 550 employees in offices in Seattle, Portland, and Tacoma.

Kopet said Encompass laid off a minor number of workers between October and the end of the year due to slow business. "We don't anticipate any significant layoffs and there aren't any planned," he added.

Sigmund said Encompass was doing well locally, but business fell off because the company wasn't able to bond projects as it approached its bankruptcy filing date. The region remained profitable, even through the bankruptcy proceedings.

"The bankruptcy was difficult for everybody," Kopet said. There was little impact on active projects, but customers were concerned about sending new work to Encompass.

Sigmund said one of the most gratifying things to him was how many of the company's customers welcomed them back. "We've had a number of customers who have said they have held back work (waiting for us)," he said.

Sigmund said he expects to reach about $60 million in volume for 2003. The company's largest current projects include a $13 million contract for work at Marion Oliver McCaw Hall and about $15 million at the Immunex Helix project.

MacDonald-Miller was founded in 1965. Sigmund joined in 1967 and bought the company in 1975 with fellow employee Virgil Timmerman. Sigmund in 1988 bought out Timmerman.

When the company was bought in 1997, it was under an employee stock ownership program. The ESOP owned 50 percent, while Sigmund and his wife owned 32 percent, and the rest was owned by key management.

Sigmund said he paid less for the business than the price Group Maintenance America originally paid, but he would not disclose either amount.

Sigmund said he plans to re-instigate the ESOP.

At 61, Sigmund said he wants to retire in three and a half to five years. By then, he said, there will be a group of senior managers in place to take over.

"I sure didn't want to go out in Chapter 11," he said.