Four of the state's largest building contractors who believed the massive Micron Technology project would provide a steady stream of work for the next few years are suddenly scurrying for jobs.
The Boise-based computer chip manufacturer has terminated the companies serving as general contractors on the estimated $2.5 billion Lehi plant. Micron Tech-nology subsidiary Micron Construction Inc., currently acting as the Lehi project construction manager, will assume the role of general contractor over the next month.Big D Construction, Ogden; Layton Construction, Sandy; Jacobsen Construction, West Valley City; and Denver-based PCL Construction, including partner Sahara Construction, Salt Lake City, are putting on their sales hats.
"That puts us on our ear, us and all the other general contractors. Now we're scrambling," said Rob Moore, Big D senior vice president. "Now we have to go out and look for work." The firms passed up other large projects to commit their employees to Micron.
Big D's workers will be on site until March 1. Moore describes the parting as "friendly." And Micron officials said they are in no way dissatisfied with the general contractors' work.
Removing the local contractors basically eliminates a layer of management. General contractors usually supply managers and super-visors and hire subcontractors. Those subcontractors will now report directly to Micron Construction.
Micron spokesman Kipp Bedard said the move will save the company money. "You always like to watch your cash flow," he said, adding Micron is trying to be fiscally conservative and responsible to shareholders.
Cash hasn't been a problem for Micron the past three years as profits soared with the world's voracious appetite for electronics. Micron's computer memory chips can be found in a variety devices from household appliances to cars.
Industry analysts, however, are forecasting a downturn in the chip market. With softening chip prices, Micron has toned town its earlier free-spending attitude on the Lehi project. Three weeks ago the company cut overtime and premium pay and ordered a work slowdown.
"As always, the company's ability to continue its construction projects at the intended pace are subject to market conditions," according to a Tuesday press release.
And as always - the past few weeks anyway - Bedard said the change in general contractors will not alter the construction schedule. Micron is on track to have the wafer fabrication facility running in early 1997. Initial company projections, however, had the plant churning out chips in August 1996.
Micron Construction will concentrate its efforts on the fabrication, central utilities plant and a utilities administration building.
Moore, of Big D, said Micron Construction will have its hands full. "They're a management firm, not a contractor like we are," he said.
Bedard said while the change in market conditions wasn't foreseen, it also wasn't surprising. "Obviously, if we did (see it coming), we wouldn't have been on the fast track," he said.
In another unforeseen move, Micron CEO Steve Appleton suddenly resigned last week. Semiconductor industry analysts say the resignation likely resulted from a boardroom tussle over the pace and funding of the Lehi project.