By BOB PRICE - CONTRACTOR NEWS - May 1996

How one contractor has made the change from wood to steel

Scott Shaddix is the President of Nicholas Lane Framing Contractors. Nicholas Lane works with developers like Home Devco, Inc., Presley of San Diego and Taylor Woodrow Homes. They are in the vanguard of the light-gauge steel residential building industry and therefore in a unique position to give us insight into this new technique as it interfaces with existing practices.

Contractor News: Nicholas Lane frames in both wood and steel?

Scott Shaddix: That's correct.

CN: Since you use both, you have a chance to do an A-B comparison between the two.

Shaddix: What wood did in 1993, the volatility(of the market), helped a lot of developers make the decision to switch to alternative products like steel. I was already involved with the steel product. While I had been framing wood houses for seven or eight years, prior to that I was in the commercial side, and we did steel high-rises and so forth. So when the opportunity came around to be able to lend my services with steel to residential construction, it was a pretty easy situation for me. I already knew the terminology, plus I knew how to put a house together.

Whether you frame with wood or steel, you still have to know how to build a home. The difference was that I knew about steel already and I could introduce it in a way that was proficient. So in 1993 we worked with a developer in San Diego to complete the last 9 houses of a 140 house development in steel. From that we learned a lot about different situations like fastening systems that may be more time consuming when putting steel together (when compared to wood).

But there are companies now trying to introduce fastening that are almost as fast as trying to fasten wood to wood. We're starting to see the more technological aspects getting involved, code requirements, city officials, everybody that needs to have the wherewithal to understand what the product is so when they're out here it's not a foreign object. It's more of a product that they've known and they've worked with. Same thing with the.fastening companies.

They're starting to be involved in this pursuit because they can see there is a possibility that this may be what we go to in regards to future construction. And steel has been around for so long. Our Federal buildings, our schools and high rises are steel because the specification standards that steel has is a higher level. Therefore, institutional buildings use it because it lasts forever. The fact that lumber went up makes the use of steel more attractive. What we're trying to do is use it in a way that can produce proficiency on a level labor wise as with wood.

The fact that you can use fewer pieces to facilitate the same structural integrity as a wood house gives you the ability to use less material at a lower cost depending on the lumber market. If the lumber market is at a high level, the steel is going to cost you a lot less when compared to the wood product. If the lumber is at a low level, then the steel will not be as much of a savings. What has to happen next is the technical ability of fastening systems to come in line to allow us to achieve labor effectiveness so we can become more efficient with our labor costs.

It's my opinion that if fewer parts are used to put a house together, I'm carrying around less weight. But it has to become competitive in labor costs. So the labor work force has to want to learn it, the officials have to want to get involved with it, the architects, the engineers, the developers-the ones that are the most important to anything we do, they have to say "this is what we choose." My ability to be able to give that selection (of building either in wood or steel ) I thought was something of value. I had to maintain the ability to stay competitive by giving my developer the choice of steel or wood.

With the trials and tribulations of now knowing this product as well as, I think, anybody out there, we can produce a pretty sophisticated house. Anything we can build in wood we can build in steel. With that combination, I can give a developer the choice and a price. This of course allows my opportunities to be a little more forthcoming from developers who want this service. And that was a price my company had to pay to create a better working relationship with the developers. So I think the future of steel being used in this format in Orange County will get more of a spotlight, and more people will want to be involved with it.

What you have to do is create a critical mass. Everything has to get to a certain point for everybody else to get involved. Right now there are very few developers willing to do that to be visionaries. I was fortunate enough to start off with a person in San Diego who wanted to go forward. But most construction professionals involved in day-to-day activities don't look at the long range picture. That led to the introduction to another developer which was Taylor Woodrow. The person who worked with them saw that they had to invest the time and effort to get this to where they could know and use steel proficiently.

When the paradigm shift happens, you want to be first in line. With that he committed himself to 80 houses out in Temecula. In a year and two months we produced 80 houses. In each phase we did 15 or so houses, and there were 4 or 5 phases. With each phase every subcontractor coming behind us became more and more proficient at putting their parts into the package.

CN: The plumbing contractors and electrical contractors...

Shaddix: You could see that the quality and the craftsmanship got better because of the commitment that they saw in front of them and the ability to learn it as they went. By the third phase we're developing third generation workers who are capable of working with steel. I didn't go looking for new employees, I used the same employees I used with wood. A carpenter is a carpenter. You don't want to throw away the value of a carpenter's skills in regards to knowing where a stud has to be or where a header has to be, etc. So I tried to encourage employees that were involved with me working in wood to want to go ahead and adopt the techniques of steel.

The evolution I saw in them was from the time they started there was frustration. There's always frustration with something new at first. By the time we got into the later phases you could see that their proficiency had doubled. They understood it, could maneuver it, work with it and harmonize with it. The level is there for people to work with this. You don't disregard a carpenter, that he can't work with steel, because he can. Give him the opportunity and the tools to do it right and correctly, and you will find that everybody behind that will do it correctly and economically, which is the biggest factor for developers. They are economically driven.

So when you saw the prices of lumber going up in 1993 and 1994, you saw the price of lumber going down in 1994 and 1995. In 1995 we were at the 1992 prices. That was when the shift changed back to wood framing and put the steel aside.

When you do that, unfortunately, everything that has been generated now comes to a halt. It atrophies, it starts to disintegrate. And I think the commitment from Taylor Woodrow which produced the ability for subcontractors to come together and become efficient will eventually show itself to be the right decision.

Efforts like this are why Taylor Woodrow is still number one. They win the industry awards because they build a high quality house that lends itself to appeal to a multitude of home buyers, and they do it with the philosophy of building a quality home, seeing what the consumer wants and build it. They go to the next step, which is why they are the leaders in using steel.

The hope is that this recognition will affect the other parts of the industry. "What do those guys do that we don't do?" They invest the time and energy through their network to make a good marriage between the steel industry and Taylor Woodrow. It is my intention to take whatever, lessons I've learned from steel and become even more proficient. And also be able to involve more people so as to create that critical mass that helps the developer save money. Steel is showing that that can be done, but we have to create the work force and the technical aspects to create that critical mass so this transition can occur.

CN: Did you train the carpenters you moved from wood to steel in-house or did you use outside educators?

Shaddix: We tried to familiarize them with the product before they actually built the house on the slab. We set up a shop on site where they can get familiar with cutting it and screwing it together, so they understood what type of screw they were supposed to use and how it would feel when they cut. We didn't just throw them out there and expect them to swim. We tried to give them a life preserver and still maintain their enthusiasm. In the end they realized what they had accomplished and it gave quite a bit to their personal satisfaction to know that they could do either steel or wood.

CN: That makes them a more valuable employee and makes them more employable in the future. Did the developer have to re-engineer the houses for steel?

Shaddix: Yes, they did.

CN: Did you have to find architects or engineers familiar with that sort of thing or did you borrow them from the commercial building industry?

Shaddix: It was a case where Taylor Woodrow went to their engineer of record and asked them if they wanted to participate, and they did. The architect of record really had to make minor changes to the plans, but he was involved with using this product. Taylor Woodrow had a team meeting and expressed what they wanted to accomplish, so everyone was aware of what was coming.

CN: And the added costs are amortized by the number of homes built. How about inspections? Residential inspectors are used to wood while commercial inspectors see a lot more steel. Did you have trouble with that? Did they just inspect by the plan, or were they asking you questions about the material?

Shaddix: Dean Barnes the Site Manager can help you with that, since he had to interface with the inspectors. But I think that the developer had to pay to have the engineer of record come out and inspect the first phase, and sign off that the house was built to the specifications given, because the city inspectors weren't familiar. At the next phase that didn't have to happen again. The inspectors understood the product, and the developers didn't have to pay the added expense to the engineer again.

[At this point we are joined by Dean Barnes, the Site manager for Tay1or Woodrow Homes. He had to deal with all the subcontractors and city officials daily].

Barnes: They (the inspectors) got a lot better at it. Once you explain to them the pros and cons, it gives them an opportunity to weigh it against what they have to deal with day after day. They really liked it. Everything was a lot more accessible. You didn't have hidden nails. Your screws were always accessible.

Shaddix: That's a good point because with most of your inspections there are parts that are blind nailed. But with steel they can see how many screws are there compared to what is on the plans.

CN: When building in wood, there are a variety of ways to accomplish the same purpose, all of which are considered correct, With steel do the inspectors have that option or were they a lot less flexible with their inspections? If it isn't put together precisely the way it was shown on the plan, though it may be structurally just as good or better, there may be a problem.

Barnes: A lot depends on the individual inspector. We had some really good inspectors in Temecula who could think for themselves. You have a certain way the engineer has it on the plans, but as long as the engineer was happy with what we did, and we had a logical reason for doing it that way, everybody agreed to it, it was just a phone call to the engineer and that takes care of it. Then the inspectors develop a rapport with us. We may change something, but we always back it up with the engineers. It makes everybody's job a lot easier. Once the inspector learns that you're not out to screw him, then he enjoys coming out and talking to you, and that helps no matter what trade you're in. Plus, the engineers came out and saw the situation in the field, and they were able to incorporate those changes in future plans.

CN: So the techniques are in the early stages of evolution. Eventually the engineers, inspectors and builders will be-many levels above where they are now. And making even better homes.

Barnes: That's only if the energy of the developer keeps going to using steel. If we aren't given houses to frame with steel, then we're not able to become more proficient.

CN: When you build two homes, side-by-side or one after the other, assuming you've already gone through the early teaming curves, does it take any longer to build a steel house?

Shaddix: Certain elements like the trusses and joists were a little more time consuming. But if we get to the point of getting a 'fastener that can couple steel as quickly as a nail gun can couple wood, then we will see some real progress. Right now, nailing our sheeting to steel is the same as nailing to wood. Those elements of fastening have helped create the labor effectiveness that will be on par with the tools that are out there for the wood industry. If they develop the ability to tie the materials together as quickly, you'll see a labor proficiency that's going to skyrocket above nailing it together. There's-one in development that is a clinch on product. It looks promising, but if it does what they say, we're looking at something pretty revolutionary .

CN: This isn't just a clamp that holds the pieces together while you are screwing it. It's part of the fastener itself.

Shaddix: They're apparently using it now in Sweden. It will hopefully be introduced here in the future.

CN: This still has to go through ugh the approval process then, which unfortunately could take years due to the bureaucracy. Even if it has been used in Europe for 10 years, it still has to go through UBC and ICBO. How did the subcontractors interface with steel, especially the plumbers and electricians?

Barnes: They did real well. Everybody that's new to it always hedge back a little bit because it is a new product. But once they learned what you can and can't do and what the inspectors are requiring from the mechanical trades, they brought it in real well. The plumbing and electrical contractors down in Temecula are looking forward to continuing with us as I am with them. They've gone through their learning curve, and I like subs who are knowledgeable. They really liked it.

CN: Did they prefer steel to wood?

Barnes: The plumber did. He liked it a lot better. He had some metal chips, but he didn't miss the sawdust. The cutting was a lot easier. You're dealing with one thickness of 20 or 18-gauge plate versus three inches of lumber.' Everything went together a lot smoother. For the electrician , it was about equal to wood. He could go either way by the time he was done with my job.

CN: Most of the steel studs I've seen already have the cutouts for electrical, so they just had to install a rubber grommet. But the plumber would have to cut his own holes. Was he using a drill, nibbler or plasma cutter?

Barnes: A plasma cutter. It's a slick tool and it works for everybody. The electrician used it, the plumber used it, the HVAC contractor didn't have one, so he talked the framer into doing his stuff for him.

CN: That's was convenient.

Shaddix: You try to develop this camaraderie, because everyone wants to do a good job. You have to realize that in order to change over to a new product we're all investing in new materials and tools. That will be amortized over ten or a hundred houses. So there is an investment as regards to the subcontractoral costs, and be able to pony up and say "I need to retool my company to produce this product and be competitive." We can share a tool for now so we can all get used to it, and that's what this industry is all about.

CN: Eventually they will all have their own because it's more efficient. For the buyer, will a steel house cost the same as a wood house? For example, if the buyer has a steel house or wood house, side-by-side. Similar lots, identical floor plans, but one's wood and one's steel?

Shaddix: I think the developer's intent is to give the consumer the best product possible at the least cost that they can provide to the consumer. With the introduction of steel, the developer can show the consumer a better product. But I don't think the developer is able to raise his revenue because of the soft market in the residential industry in Southern California. If the cost of materials and labor go up, generally the developers eat that.

CN: So it eats into your profit margin a bit. So for now, framing in wood is more profitable.

Shaddix: Let me put it to you this way. The networks are being developed by Taylor Woodrow to create the same costs or maybe a little bit more. And in that effort, they are developing the ability of producing that.

Being a subcontractor, I want to see a developer succeed so I can have more work with him and I'll try to guide my efforts to offer him a choice that will give him more productivity, cost savings and more value. Taylor Woodrow stands for value, quality and leadership in the residential building industry. What they build, everybody else wants to . I know how to do it right now. That doesn't happen by accident. The fact that they have adopted using steel shows me that they think steel has an intrinsic value that can be passed on to the consumer. They aren't marking up their product to do that. They're doing that in order to learn it.

CN: Eventually, the consumer may see having a steel framed home versus a wood framed home as a built-in upgrade. Before they may add a garage or finish a basement to increase the value of their property, the steel will automatically add to the resale value.

Shaddix: But there may not be an added value later. That remains to be seen. But Taylor Woodrow is trying to offer it to the consumer at the same price. There's lots of different ways of winning.

CN: Have the insurance carriers made any changes when you've gone from wood to metal? Is it less expensive to cover a project or is it the same? Are they even aware of it?

Shaddix: They're aware of it. The quote hasn't come out yet. We've been informed that they will have a rating for steel frame carpentry. They have to take into consideration that it isn't a high rise type of steel. I'm curious as to what that is going to be, but I haven't seen it yet.

CN: Although a fall is a fall, no matter what you fell from, it seems that most of the injuries would be less severe. How would you compare the job site neatness of metal versus wood?

Barnes: It's a lot better. The waste factor we experienced going to steel was phenomenal in Temecula. You build a wood tract, and there is wood everywhere. You cut it off and throw it away. But so much more of the steel is usable. You get a random length, and everything is usable down to the last few inches. Plus since it's a lot lighter, it is much easier to take care of and keep in an enclosed area which lends itself to creating a clean atmosphere.

CN: So the clean up was faster, more efficient, etc...

Barnes: And the scrap is recyclable.

CN: I assumed you did that, put the scrap in a drum and then not have to pay to have it hauled away.

Barnes: The trash haulers worked with us down there supplying us with bins for an unlimited amount of time because with less waste, it takes more time to fill one up. You're not turning that over every week. We had our bin for four or five weeks down there on the first 16-house phase. They recycled it somewhere and we used that money to take it off the other end.

CN: It's easier with regards to good neighbor relations as well. How about the load on the foundation with steel versus wood?

Shaddix: The weight is probably cut in half. Your house will stay level for many more decades.

CN: Is there a barrier between the steel and the cement? Cement is porous and can bring moisture up.

Shaddix: Plus its acid content is high. But steel has been attached straight to concrete for 40 or 50 years in high rises, and there have been no failures. Galvanization is a strong inhibitor to corrosion. I think G-60 is specified for anything within 5 or 10 miles of the ocean.

CN: Many of the metal stud suppliers cut the studs to length before they deliver them.

Shaddix: Angeles, Cemco and Western Metal all do that.

CN: Is it like building a model kit?

Shaddix: It's not to that level. What Cemco and Angeles do is give you the material to the length you may want, but they won't tell you where to place them. And you still need to cut out f6r windows and doors and so on.

CN: Steel is much lighter than wood, so you don't need a lot of bodies to carry this stuff around. Can you reduce your work crew because of this?

Shaddix: You still have to maintain care. When you stand up a large wall, even though it's light you don't want to have less people when maybe one extra would allow it to be put up in a safe manner. It's just not as strenuous for those who are doing the work. It creates less stress or strain.

CN: Let's tell that to your worker's comp carrier.

Barnes: And production wise they can actually get more accomplished. They aren't worn out in four hours. They can go all day. Working with roof trusses, it's easier to move that stuff around. And when you're 20 feet off the ground and you know you don't have to put everything you've got into jerking on something. You don't end up taking a dive for it.

CN: With roofing, you're still sheeting in plywood and installing a conventional roof Have you investigated the newer roofing products?

Shaddix: We haven't used them. I know our research and development department has looked into that for the future. But for now we still stick to conventional roof.

CN: Is there an added expense for your sub-contractors because of the need to install barriers to prevent the electrolysis between aluminum (from window frames) or copper (plumbing) and the galvanized steel?

Barnes: Whenever you have a penetration with wood or steel it needs to be fastened down. Everyone's going to plastic connectors for this purpose for either wood or metal. We don't use aluminum windows. We use a vinyl window which eliminates that problem.

CN: Have you found advantages with the consistency of the product?

Barnes: Each piece of steel is the same as the last, and you don't have to worry about it growing or shrinking after it is installed. So it lends itself to a higher quality, probably a higher value home.. The shelf life for steel? I can set a bundle of studs out here and next year it will be just as shiny as the day we set it here. If it was wood, we'd say "what is that mess over there?" It colors and twists in so many different ways. Lumber is a perishable item. You have to use it right away, and you have to cover it up as quickly as you get it up, too. If it's open to the elements it starts to go back to its memory. Wood has a "memory." When you take a log and you cut 2 X 4s out of it, it will eventually try to go back to its original shape.

Shaddix: Also, when you have a specified gauge of metal it will be that way consistently. With lumber, you have a range and they have to take that high spectrum and low spectrum to grade that lumber. With steel, you know exactly what that value is.

CN: So you should be able to build a more precise house with straighter, plumb walls. I used to think there was no such thing as a straight wall, until I started investigating steel. It sounds like you can stockpile steel better, and the price is more stable.

Shaddix: I could show you how in just the last two weeks wood has gone up and down $200-300 for each house we sell. Steel has stayed basically the same since 1973. Now and then there might be a "blip" in the price. Also, the steel industry had no other market to resource. Right now, steel companies are being squeezed by other products like plastics, aluminum and glass in the container market. They've been involved in the automobile industry, and plastics and aluminum are spreading there as well. But steel is perfect for residential housing. This is a market that can grow. The steel industry wants this, and they can market it to the consumer. The advantages are obvious. And steel hasn't shown itself to spike in price compared to lumber. And the volume. If I had the amount of material used to build these houses in wood sitting next to the material for building these houses in steel you'd see three or four times the volume for using wood. Steel would be stacked flat and neat, and it nests into itself.

CN: Especially in Southern California, the people are environmentally conscious, and the recyclability of steel should be a selling point.

Shaddix: It's not just that. There're advantages for fire protection, flood, earth-quakes. And we are environmentalists by nature. You have to expect that when you throw those salvos out, the lumber industry will come back with their own studies which don't show the shininess. There's a fine line between putting another industry down and perpetuating what your industry is. But as the consumer learns, they will make the right choices. Why did we go to aluminum containers? We saw the intrinsic value of the recyclability. And that will be the same with construction material. Taylor Woodrow considers themselves to be "green builders." How many developers are out there trying to better their industry by bettering the environment. It takes boldness.

CN: And you have to do things differently from the way you were taught. For example, years ago if you built a house in the woods, you would first bulldoze the trees down, then build the house, then plant trees. It sounds like steel is not cheaper ... yet, it's definitely better, it's not quicker ... yet, but it will be eventually.

Shaddix: My personal opinion is that I invested my time and energy not to change the way we build, but to adopt something that is better. If something is better, and I can align myself to do that, it will make my company stronger. A lot of people invested in it in 1993, but they didn't have the relationships needed to build a home. The fact is I was in the commercial industry during my apprenticeship, but I learned how to build a house in the 1980s when I started my residential business. That is when I learned how to build a house. And now being able to marry that with steel because I had that ability in my younger days and the knowledge of how a developer wants to build a home. This is a competitive industry, and you need to know the needs of the developer. The boldness was at first to save money. But now they've taken the first steps, and they're walking very quickly. Taylor Woodrow is years ahead of the others. Later they will scratch their heads and say "Why weren't we doing that?"

CN: Do you think a contractor will have to have the ability to work with steel to remain competitive in the future?

Shaddix: I thought so. That's why I did it. When I saw myself lose volumes of homes because the cost of lumber per home went up $3,000 overnight, the customers didn't necessarily believe it, and they got bids from some people who didn't know the market that well. Their number was lower because they missed something, and it created havoc later. I realized that wasn't something I wanted to have happen. I didn't want to lose work because of the whims of the market. And none of that money in the price increases went in our pockets. It went in the lumber industry's pockets.

CN: It's easier to bid the job.

Shaddix: I quote a price today, I have to pick up the phone and say "Is the lumber price still good?" Its 50-50, yes or no. I'm looking at the deck changing twice a week. Unfortunately, a lot of supervisors don't want to change from wood. And they'll make your life miserable. Dean has brought a kindness to the industry, and understood that everybody had to have the ability to learn and accept what they had to do. Every week he had a meeting to take care of problems or questions that needed to be answered. He involved himself. He didn't throw his subs into the ocean and pretend like they don't exist, but every Friday he had them come for lunch and express their concerns. It's common sense and smart business to have a superintendent who is involved in the project like that.

Barnes: We're dealing with something new. Scott and I believe that it's the thing of the future, so we're willing to put the time and the effort into it. But there's a lot of people out there who aren't. They're comfortable with wood, they've done it for 20 years. That's what they feel comfortable doing. They don't get paid millions of dollars to be developmental or look to the future, they're paid to put in their eight hours and go home. They want to stay at a comfortable level. With a new product, without the lines of communication from everybody involved, you lose quite a bit. At the meetings, a lot of times there wasn't anything job specific to discuss, but it still left the guys a chance to communicate with each other, and then you transform that good will communication into relationships on the site, and they work together. The steel was new to everybody, so let's make it comfortable for everybody.

CN: Did you have any transitional problems yourself?

Barnes: No, I came from custom homes, wood framed. I learned to build a house the right way, and when Taylor Woodrow offered me the chance to learn steel and to build houses the way I was taught, I gladly accepted it. Once you've learned it, it's no problem. I look forward to it, and I don't look forward to going back to wood jobs.

CN: Did you learn on-site about steel or did you get training from the steel industry or a school.

Barnes: Right on site.

Shaddix: The steel industry is still trying to figure out how to teach. On-site is best, like Dean says. The best education you can provide is expanding your competency if you already know how to build. All you have to do is get in the middle and be involved.