Grunau Company Inc.

1100 West Anderson Road
Oak Creek, Wisconsin 53154
U.S.A.
Telephone: (414) 216-6900
Fax: (414) 223-6950
Web site: http://www.grunau.com

Wholly Owned Subsidiary of APi Group Inc.
Founded: 1920
Employees: 500
Sales: $100 million (2006 est.)
NAIC: 238220 Plumbing, Heating, and Air-Conditioning Contractors

Grunau Company Inc. is an Oak Creek, Wisconsin-based mechanical contractor providing design and installation services for a wide variety of systems, including heating, ventilation, and air conditioning (HVAC); refrigeration; temperature controls; fire protection; plumbing; electrical; process piping; piping fabrication; and underground utilities. The company's Grunau Metals unit offers specialty metal fabrication and installation for such items as canopies, catwalks, access platforms, animal caging, doors and door frames, hand railings, silos, storage tanks, wastewater treatment plant clarifiers, and flag poles. Maintenance, repair, and retrofit services are also offered.

In addition to its primary location near Milwaukee, Grunau maintains fire protection offices in Milwaukee; Orlando and Fort Myers, Florida; Indianapolis, Indiana; Youngstown, Ohio; and Pittsburgh, Pennsylvania. Grunau has long-standing ties to Milwaukee's largest industrial companies, including Miller Brewing Company, Johnson Controls Inc., and Allen-Bradley Company. Grunau is a subsidiary of APi Group, a St. Paul, Minnesota-based holding company that owns more than two dozen subsidiaries involved in fire protection systems, specialty construction services, special systems, distribution, and fabrication and manufacturing.

COMPANY FOUNDED: 1920

Grunau company was established in 1920 in Oak Creek by Paul J. Grunau and his wife, Alma. It started out as a small plumbing business serving local customers, operating out of a small storefront location at 1307 South Kinnickinnic Avenue, above which the couple lived and raised a family. Grunau expanded the business three years later by adding heating system installation to his capabilities. By the end of the 1920s he grew the business further by including fire protection services. Not only did the company design and install fire suppression systems, such as sprinklers, but it made certain that the buildings met building codes and insurance requirements. It was also in 1929 that Grunau's son, 18-year-old Paul Edward Grunau, began working with his father as he trained to become a professional engineer, attending the University of Wisconsin in the 1930s.

The business would remain primarily a small plumbing company for the next 30 years. Then, in 1948, the younger Grunau assumed the presidency. Almost 40 years of age, he was well experienced and ready to grow the business. Like most companies, Grunau benefited from the post–World War II economic boom that resulted in a great deal of construction projects requiring plumbing, heating, and fire protection services. Much of the company's growth, however, was attributed to Paul Grunau, who proved to be a persuasive salesman who loved people and knew everyone in town, though by some accounts he was also known to be a stern taskmaster.

In 1960 Grunau Company added sheet metal services to its capabilities, as a result bringing in new customers while providing some diversity. Soon Grunau outgrew its space, and the company moved to a new location in 1964, the present day site of the company's metal shop. Grunau also expanded geographically during this period. In 1967 the company opened a shop in Indianapolis, the first time it ventured outside of Wisconsin. By this time, a third generation of the family had become involved in the business. In 1962 Paul E. Grunau's son, Gary Peter Grunau, joined the company after earning a degree in engineering from Cornell University. He would then attend Milwaukee's Marquette University to attend business school. In 1974 he became president of the firm, while his father assumed the new positions of chief executive officer and chairman of the board.

MILLER BUSINESS PEAKS: 1978

During the 1970s and into the 1980s Grunau experienced a period of unprecedented growth. A new division was formed to add a number of new capabilities, including metal fabrication, metal engineering, and installation. These services would find ready customers, especially Miller Brewing Company. The venerable Milwaukee company had grown to become the eighth largest brewer in the country by the late 1960s, attracting the attention of the Philip Morris Corporation, which purchased it in 1969. With the backing of its new corporate parent, Miller began investing heavily in advertising, promoting the concept of "Miller Time," and enjoying a tremendous success with its Lite beer, supported by the "Tastes Great, Less Filling" advertising campaign featuring scores of ex-athletes and other celebrities. The catch phrase became part of the culture, driving Miller sales. To keep up with demand, Miller also dipped into Philip Morris' deep pockets to fund a major expansion. In addition to renovating the Milwaukee brewery, Miller built six new breweries. With a solid reputation in Milwaukee, Grunau was a natural choice to take on numerous mechanical contracting projects for Miller. Grunau's work with Miller peaked in 1978 when it boasted a record $175 million in revenues and employed more than 2,000 people, making it the country's second largest mechanical contractor, according to the trade publication Domestic Engineering. The expansion program at Miller finally came to an end in the early 1980s. All told, in about a dozen years Grunau received some $500 million in contracts.

Having forged a solid working relationship with Miller, Grunau continued to win contracts for maintenance for mechanical systems and renovation projects at the brewer, but the boom time was ending and, coupled with the effects of an economic recession, Grunau experienced a decline in sales and reduced its work force accordingly. Because of the decrease in available projects in the Milwaukee area, Grunau began to turn to new parts of the country to find work. In 1980 the company opened an office in Pittsburgh. Two years later Grunau moved into Orlando, Florida, a fastgrowing community because of the success of Disney World that led to other tourist attractions, restaurants, hotels, and resorts.

Gary Grunau also created opportunities in Milwaukee by developing properties through a new company, Grunau Project Development. A holding company, Grucon Corporation, was also formed to house both of the family businesses. Along the way Gary Grunau emerged as an important civic booster in Milwaukee, a visionary who played an important role in revitalizing the city's downtown area. Like his father, he was a good salesman, albeit one who possessed a more pleasant demeanor. According to architect David Uihlein, quoted in a Milwaukee Journal profile of Grunau, "A guy like Gary can be pretty persuasive. Before you know it, he has you walking out of the room carrying the flag for something you'd like to think about a little more."

COMPANY PERSPECTIVES

Grunau Company strives to build positive, long-lasting relationships. These unique relationships allow us to gain insight and knowledge about our customers, their businesses and their objectives. As a result, our customers are comfortable working with us, and expect—and receive—excellent outcomes.

Grunau's political skills and power of persuasion helped to build the Hyatt Regency Hotel in 1980. Three years later he took a former Schlitz Brewing Company complex, which included 2.5 million square feet of keghouses, bottlehouses, office building, a garage, stables, and other buildings, and began converting it into an office park, The Brewery Works, a project that helped revitalized a section of Milwaukee. While Grunau Company received work from the project, it provided good value for the Brewery Works. Its engineers evaluated the existing heating, ventilation, and air conditioning systems, and then Grunau retooled and retrofitted the equipment to shave about $500,000 off the cost of construction. Other important projects that followed in the ensuing years included a renovation of the Cathedral of St. John the Evangelist, a communications and operation center for the Milwaukee Police Department, the Humphrey IMAX Dome Theater and Discovery World, and the Potawatomi Bingo Casino. In 2003 Grunau Project Development was sold to Providence, Rhode Island-based Gilbane Building Company, and Gary Grunau became a senior vice-president of Gilbane's regional office located in Milwaukee.

PAUL GRUNAU DIES: 1992

The start of the 1990s brought a fourth generation of the Grunau family to the business. In 1990 Gary Grunau's son, Paul W. Grunau, joined the business as a project manager. Two years later, in September 1992, his grandfather, Paul E. Grunau, died of natural causes at the age of 81. He had led the company through a golden era, and although it had since experienced a sharp drop in sales and employment Grunau Company remained a prosperous concern.

In 1994 the company expanded again, this time establishing itself in a key location in the Midwest, opening an office in Youngstown, Ohio. By this stage, according to Air Conditioning, Heating & Refrigeration News, revenues totaled $68 million and the company employed 600. As the economy picked up, so did Grunau's business. By 1996 annual sales improved to $75 million. In that same year, the company sought to grow its income from building maintenance services by forging a joint venture with Polacheck Property Management Company. The new company, Facilities Management Company, managed properties, taking advantage of Polacheck's expertise, and also offered building maintenance services provided by Grunau personnel.

Paul W. Grunau quickly rose through the ranks while his father focused most of his attention on his development projects. In 1994 he became executive vice-president and the following year took over the presidency. Due to the strong economy the marketplace for contractors became saturated, most of them surviving from project to project. The focus of the new Grunau president, on the other hand, was to establish close relationships with clients, to become involved in the early stages of a project to help provide greater value. In this way, the company could avoid the trap of having its services treated like a commodity, to compete on the basis of low bids against firms that lacked its experience and capabilities. Another move to improve Grunau's standing in the marketplace came in 1999 when the company branded its specialty metal unit, naming it Grunau Metals.

KEY DATES

1920:

Paul J. Grunau founds company.

1929:

Fire protection services are added.

1948:

Paul E. Grunau named president.

1960:

Sheet metal services are added.

1967:

Indianapolis office is opened.

1974:

Gary Grunau is named president.

1980:

Pittsburgh office is opened.

1999:

Paul W. Grunau buys the company.

2006:

Business is sold to APi Group, Inc.

In 1999 Paul W. Grunau bought Grunau Company from his father. Soon after the new century dawned he faced fresh challenges as the economy slipped into recession and construction projects were put on hold. To weather the bad times and better position itself for the eventual rebound of the economy, as well as offer a better value to its customers, Grunau in 2003 turned to lean construction methods and business practices known to the Japanese as kaizen, meaning "to take apart and put back together in a better way." The company started by reorganizing its tool room, the way tools were managed, stocked, and stored. It essentially used a grocery store as a model, with shelves in the front where they were available for use and a storeroom in the back where they are returned and refurbished. Expendable supplies like blades, brushes, and welding tips were restocked automatically by an outside vendor. Following the success with the tool room, Grunau applied kaizen to other aspects of the company, including the job site itself where the company looked to eliminate wasted effort, such as moving equipment and employing just-in-time fabrication that prevented clutter at the job site. Even the office was not immune to the lean approach, as everything possible was streamlined, including the bidding and estimating process and the layout of desks and arrangement of supplies.

As Grunau applied lean construction methods, the economy began to rebound and the company's markets improved on a case-by-case basis. Of particular importance were the steel industry and healthcare. In 2005 the company won a design-build and installation contract for the HVAC system in Wisconsin for a new General Electric Company's healthcare divisions' headquarters. By this point Paul W. Grunau concluded that the time had come for the company to join forces with a larger partner in order to maintain its growth. In the spring of 2006 he agreed to sell the business to St. Paul, Minnesota-based APi Group. "As he researched options for aligning Grunau with larger financial partners," according to Plumbing & Mechanical, "he and APi found each other. The business model that APi presented impressed Grunau. APi posts nearly $1 billion in annual sales, and maintains local management and the company identity of it acquisitions, while sharing human resources, business innovations and economies of scale." APi was also a comfortable fit because like Grunau it started out as a family plumbing and heating company, established in 1948 by Reuben L. Anderson. With sales estimated to reach $100 million in 2006, Grunau Company with it new corporate parent and longtime management team hoped to enjoy even great prosperity in the years to come. In June 2007 a first step in expansion was taken with the opening of a fire protection office in Fort Myers, Florida.

Ed Dinger

PRINCIPAL DIVISIONS

Grunau Metal.

PRINCIPAL COMPETITORS

EMCOR Group; Comfort Systems USA; Midwest Mechanical Group Inc.; The William R. Nash Companies.

FURTHER READING

Daykin, Tom, "Going Strong at 75," Milwaukee Journal Sentinel, February 9, 1996, p. 1.

——, "Grunau Co. Sold to Minnesota Firm," Milwaukee Journal Sentinel, April 5, 2006.

Gould, Whitney, "Developing a Vision for the City," Milwaukee Journal Sentinel, June 9, 2002.

Rotella, Katie, "Grunau Sells to API Group," Plumbing & Mechanical, May 2006, p. 10.

——, "Lean the Grunau Way," Plumbing & Mechanical, August 2005, p. 44.