Granite Rock Company

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Granite Rock Company

411 Walker Street
Post Office Box 50001
Watsonville, California 95077
U.S.A.
(408) 768-2000
Fax: (408) 768-2201
Web site: http://www.graniterock.com

Private Company
Incorporated: 1900
Employees: 500
Sales: $120 million (1997 est.)
SICs: 5032 1411 Dimension Stone; 1423 Crushed & Broken Granite; 3281 Cut Stone & Stone Products; 1611 Highway & Street Construction

The largest U.S.-owned and -managed construction materials supplier in northern California, Granite Rock Company produces rock, sand, gravel aggregates, ready-mix concrete, asphalt, road treatments, and recycled road-base material. During the late 1990s, Granite Rock operated in a six-county area extending from San Francisco southward to Monterey, competing primarily against firms owned by multinational construction materials companies. The company also retailed building materials made by other manufacturers and operated a highway paving operation through a division named Pavex Construction Company.

Founded in 1900

Granite Rock’s historical roots are embedded in a deposit of granite situated atop the San Andreas Fault, where 200 million years ago a mass of molten granite emerged from the depths of the earth and cooled, contracted, and cracked, providing the lifeblood for an enterprise that would flourish for a century. Although the company’s founders did not discover their flagship source of granite, it was through their efforts that the quarry developed into the prodigious source it became. The deposit of granite that served as the backbone of Granite Rock was discovered in 1871, when civil engineers working to connect the coastal line of the Southern Pacific railroad found a granite field nine miles west of a small town named Watsonville, just south of Santa Cruz, California. The chance discovery proved to be fortuitous, providing railroad crews with excellent ballast to form railroad beds. Thirty years later, however, the quarry at Aromas was no longer able to support itself. It was at this juncture that the founders of Granite Rock pooled their cash and purchased the quarry.

The central figure behind Granite Rock’s formative decades of operation was Arthur Roberts (A. R.) Wilson, born in San Francisco in 1866. Bright and ambitious, Wilson attended Massachusetts Institute of Technology, where he matriculated with a degree in engineering in 1890. Wilson returned to California shortly after his graduation and began his professional career in Oakland as a construction worker. During his stay in Oakland, Wilson served a term as Oakland City Civil Engineer and eventually managed a local quarry named Leona Heights Quarry. As Wilson earned recognition in the Bay Area, to his south a man named Warren Porter was preparing to make a move that would lure Wilson to Santa Cruz County. The son of a local banker named John T. Porter, Warren Porter counted himself as a lumberman, banker, and politician and was eager to add another occupation to his business card when his father’s bank, the Pajaro Valley Bank, foreclosed on the Aromas quarry. Porter enlisted the help of Wilson and four other investors to help purchase and manage the small granite quarry, convinced that the property could be turned into a profitable enterprise. Wilson’s interest was piqued as well, so he borrowed $10,000 and moved his wife and three small children south to Watsonville. On Valentine’s Day, 1900, the partnership was incorporated as the Granite Rock Company.

At the start, Wilson and Porter employed 15 men who worked the quarry. Using sledgehammers, picks, shovels, and wheelbarrows, Granite Rock’s small labor force worked ten hours a day shattering the slabs and boulders of granite into pieces six inches or less. The splintered granite was then loaded into horse-drawn wagons for shipment to the railroad line. The workers slept at the quarry bunkhouse, ate at the adjoining cookhouse, and were paid $1.75 per day, crushing roughly 12 tons of granite each between six o’clock in the morning and six o’clock in the evening. By 1903 there were nearly two dozen men working the quarry, each of whom must have been enormously relieved by the arrival of a steam-powered crusher, which reduced 20 tons of granite into two-and-a-half-inch pieces each hour.

The 1906 San Francisco earthquake laid ruin to the Bay Area, destroying city blocks, twisting train rails, and, in Santa Cruz County, wreaking havoc on the six-year-old Granite Rock Company. The new steam crushing plant was reduced to rubble by the earthquake, shutting down operations at the quarry, but Wilson was quick to respond to the calamity. A new crusher was procured and, in the aftermath of the widespread damage, a wealth of new business kept the crusher busy, and carried Granite Rock into new fields. Prior to 1906, the quarry’s output was used primarily for railroad ballast. In the months following the earthquake, as crews set to work replacing twisted stretches of rail, the need for railroad ballast increased dramatically. The signal development stemming from the earthquake, however, was Granite Rock’s entry into the construction business. Wilson joined the massive effort to rebuild those areas flattened by the earthquake by acting as a general building contractor, marking Granite Rock’s debut as both a mining and construction firm.

Granite Rock’s construction business in San Francisco and around the Monterey Bay area following the 1906 earthquake led the company into the street construction business during the ensuing decade. Against the backdrop of World War I, Granite Rock was awarded contracts to pave streets in Watsonville, Santa Cruz, and Salinas, as well as to construct a highway connecting Castroville and Moss Landing, a project known as the “Cauliflower Boulevard” and that employed a Salinas laborer named John Steinbeck.

The 1920s were years of definitive change for Granite Rock, predominated by leadership changes and the blossoming of the company into a multifaceted enterprise. Porter and Wilson continued to lead the company as the decade began, but in 1922 Porter fell victim to his ambitious and diverse business interests. He suffered severe financial losses in a speculative investment with the Java Coconut Oil Company, causing his ownership stake in Granite Rock to be transferred to Java Coconut Oil. Wilson, on the other hand, was thriving as a businessman and Granite Rock stood as the chief beneficiary of his talents. In the same year, Porter made his troubled exit from the company and Wilson established the Granite Construction Company, of which he became president. Two years later, he broadened his interests further, forming Central Supply Company to distribute construction materials. As these new companies took shape, Wilson purchased the stock owned by Java Coconut Oil and became Granite Rock’s majority shareholder and president.

The Great Depression and Granite Rock’s Recovery

In 1929, while driving home from the Aromas quarry, Wilson suffered a heart attack and died, leading to the first change in leadership in the company’s 30-year history. Wilson’s wife, Anna, took over as president of the company, and her stepson, Jeff, assumed the duties of general manager. Ten days later, the Great Depression was touched off by the collapse of financial markets, leaving Granite Rock’s new leaders to face the most difficult decade in the company’s history. Granite Rock, like thousands of other businesses throughout the country, was hit hard by the debilitative economic conditions. The company was unable to offer regular employment as demand for rock and sand products disappeared. By 1936, Granite Rock’s financial position had become precarious enough to warrant the sale of Granite Construction Company and several branches of Central Supply Company.

Robust financial times returned in the 1940s, sparked by the United States’ entrance into World War II. At Granite Rock, bustling activity returned as the company supplied materials to build Fort Ord and Camp McQuaide, the Navy airstrip in Watsonville. Flush with business, the company expanded only a few short years after teetering on the brink of insolvency. A new plant was constructed at Asilomar in Pacific Grove, while at the quarry in Aromas excavation of the mining face was brought down 100 feet. At this lower level, which was even with the railroad tracks, a new primary crushing plant was erected, opening in 1946, and the company exited the 1940s with further expansion on the drawing boards.

Company Perspectives:

Graniterock People are achievement oriented, unsatisfied with “things the way they are” when improvements are possible. Rather than preserving or protecting the work of the past, Graniterock People encourage and support both incremental and sweeping change and recognize that risk-taking and honest mistakes are unavoidable parts of doing this. In everything we do, we will compare ourselves with the results achieved by role-model high performance companies in any industry. We are not satisfied with simply being “good,” we must be among the “best” in every important thing we do. Graniterock People consistently provide a “can do” commitment to individual and team-driven improvements, and provide support for improvement ideas in other areas within the Company.

During the 1950s, Granite Rock gained a number of new facilities, as construction activity recorded a two-decade-long increase fueled by the country’s postwar economic rebirth. To meet the rising demand for rock and sand products, the company built wet processing and loading plants at the Aromas quarry and acquired new plants in Salinas, Felton, Santa Cruz, and Los Gatos. Central Supply Company, which had been stripped of some of its operations during the Great Depression, was moving in the opposite direction during the 1950s. The company purchased its first fleet of transit mixer trucks from Ford Motor Company. As physical expansion was underway, leadership changes at headquarters in Watsonville showed that Granite Rock was destined to be a family-run enterprise. Early in the decade, Jeff Wilson left the company and Anna Wilson retired, making room for the ascension of Mary Elizabeth Wilson Woolpert, A.R. and Anna Wilson’s first child. Before the end of the decade, Mary Woolpert passed the reins of command to her husband, Bruce G. Woolpert, who would lead the company for the next three decades.

During the 1960s and 1970s, Granite Rock’s expansion mirrored the booming growth of the Monterey and San Francisco Bay areas it served. During this period, Central Supply Company was merged into Granite Rock, forming a single entity responsible for production and sales, and new plants were opened in San Jose, Redwood City, Santa Cruz, Gilroy, Hollister, Salinas, and Seaside.

During the 1980s, the company’s profits were funneled in a slightly different direction. Instead of using its financial resources to construct new facilities, the company spent capital on revamping its existing assets, namely the Aromas quarry. During the decade, Granite Rock initiated a complete modernization of its quarry in an effort to gain an edge over its competitors. A giant mobile primary crusher—the largest of its kind in the world—was designed and built, and conveyers were installed to carry rock from the crusher to a new wash plant and secondary crushers. In addition, a computer-controlled, automated track and railcar loading system was installed, providing the finishing touch on the newly christened A.R. Wilson Quarry. Although the state-of-the-art A.R. Wilson Quarry represented an important technological step forward for Granite Rock, there were more significant developments during the decade, developments that would shape the company for the future and underpin its success during the 1990s. Ironically, the 1980s would be remembered for Granite Rock’s achievements away from the technological side of its business, and those achievements were won by the second generation of Woolpert management.

New Strategy Born in the 1980s

In the mid-1980s, Granite Rock, by all measures, looked to be in fine health. The company’s financial standing was sound, the improvements to its quarry promising, and its share of the northern California market was on an upswing. When Bruce G. Woolpert’s son Bruce W. Woolpert arrived, however, dramatic change took place immediately. Prior to joining the family business in 1986, Woolpert had distinguished himself both academically and professionally. He graduated from UCLA in 1974 with degrees in economics and mathematics and finished first in his class at Stanford Business School. Following his education, Woolpert joined Hewlett-Packard, where he eventually was put in charge of running a small software division. After eight years working for the computer company, Bruce Woolpert joined his brother Steve at Granite Rock and the brothers were named joint chief executive officers. Steve Wool-pert assumed responsibility for land acquisition and long-range resource planning, and Bruce Woolpert took on the duties related to Granite Rock’s daily operation.

“He had a lot of ideas when he came here,” remembered a longtime company employee, recalling the arrival of Bruce Woolpert, “... scared us half to death because the company was successful.” What Woolpert saw were meaningful changes in Granite Rock’s industry that demanded immediate improvements to Granite Rock’s way of doing business. When he arrived at the company, Woolpert found an organizational structure that was overly centralized. The company was hobbled by bureaucratic layers of command that slowed decision making and distanced company-customer relations. Ordering business cards, for example, required the approval of the vice-president. Taking this in, Woolpert looked outside Granite Rock and saw the dynamics of the company’s industry quickly changing. Prior to the mid-1980s, the bulk of Granite Rock’s competitors were similar in size and resources to Granite Rock, but during the mid-1980s multibillion-dollar multinational firms began to move in and acquire many of the smaller construction materials companies. “We realized,” explained Woolpert, “that we couldn’t compete with them in terms of dollars; we knew we had to win by doing things better.” Within this context, Wool-pert launched an exhaustive customer survey to narrow the gulf separating it from its customers and he implemented a personal development plan for Granite Rock’s employees known as the Individual Personal Development Plan (IPDP).

The essence of the changes that occurred after the 1987 implementation of IPDP centered on shifting the company’s focus from technology to the customer. Customers, according to the company’s year-long survey, wanted faster, more precise, more flexible delivery service, which came to represent the cornerstone of Woolpert’s changes. “Any time a customer asks us to do something—unless it’s illegal or immoral—we will do it,” he remarked. The company used Domino’s Pizza as the standard from which to measure its delivery performance and instituted an automated loading system at its quarry that gave customers complete control over delivery times. As an integral part of its program to empower customers, the company spent considerable time and money empowering its employees so that they could better serve customers, and, accordingly, established Granite Rock University. The company spent more than ten times the industry average on training for its employees, enabling its employees to achieve their self-determined professional goals as established through IPDP.

Within a decade after Woolpert revamped a company that at first blush appeared to be suffering from no ills, the fruits of his work were readily discernible. Few could question the necessity of his actions. During the economically recessive early 1990s, which affected California severely, the company remained profitable, established a highway paving division named Pavex Construction, and nearly doubled its market share, a remarkable achievement considering the size of Granite Rock’s new multinational competition. In fact, between 1987 and 1994, Granite Rock’s market share increased 88 percent, despite a 43 percent decline in the California construction business. Further, in terms of revenue per employee, productivity at Granite Rock was 30 percent higher than the industry average. With the company’s new way of doing business firmly in place by the late 1990s, Granite Rock’s prospects were bright, as the company made its way through its second century of business, flourishing under the stewardship of A.R. Wilson’s grandson.

Principal Divisions

Concrete & Building Materials; Road Materials; Truck Transportation Services; Aggregate Division & Rail Unloading Services; Transloadexpress Rail Unloading Service; Pavex Construction Company.