The national economy may be in shambles, but as evidenced by the recent addition of $3.3 million in new vacuum, hydroexcavating and wet-vac trucks, no one at Riley Industrial Services Inc. got the memo.
Thanks to a diverse business base that’s largely recession-proof and meticulous attention to machine maintenance, the Farmington, N.M.-based industrial cleaning company continues to thrive. Its primary services are industrial vacuum loading, sand and waterblasting, tank recoating and hydroexcavating.
“We’ve been very fortunate,” says George “Sonny” Riley II, 74, who over 39 years has transformed a small equipment rental shop into a corporation with more than 300 employees. “We’ve slowed down some, but not like out East.”
NEW VAC TRUCKS
The Riley Industrial complex features 130,000 square feet of shop space, including a 20,000-square-foot repair shop and a 4,500-square-foot welding shop. Its fleet of equipment includes 30 vacuum trucks, mostly Supersuckers made by Super Products LLC; 20 GapVax hydroexcavating trucks, made by GapVax Inc.; six wet-vac trucks, made by Global Vacuum Systems Inc.; 75 sandblasting units; 14 waterblasting machines; 225 18-wheel trucks; and 100 flatbed trailers.
During the past year, Riley Industrial purchased three GapVax hydroexcavators, four Supersucker trucks and four Global wet-vac trucks to handle growing demand for industrial cleaning services.
Riley depends on the GapVax trucks to safely locate 30- to 32-inch-diameter underground natural gas and oil pipelines, many of which are decades old and difficult to find because of poor recordkeeping and businesses that change hands multiple times. In addition, there’s also the hazard of destroying unmarked, buried fiber optic lines.
“There’s an unbelievable maze of pipelines around these parts,” he explains. “They didn’t use maps back then, so no one knows where anything is. You can use metal detectors, but they can be two or three feet off the mark. And if the tooth of a backhoe hits a buried, pressurized pipeline, it’ll rupture and explode. So we use a hydroexcavator to locate them so our clients can do repairs and maintenance.”
The Supersucker trucks are used primarily to remove fly ash from utility power plants, which comprise another main business sector for the company. The Global wet-vac trucks are used to clean production tanks located in oil and natural gas fields and oil refineries. A typical production tank is 12 feet in diameter, 20 feet tall and holds almost 17,000 gallons of liquid. Riley estimates that tens of thousands of these “slop tanks” stand throughout the Southwest.
STARTING OUT
Riley Industrial’s roots stretch back to 1970 when Riley, who ran an equipment rental company, decided to put some under-utilized air compressors to work doing sandblasting jobs on the side. Soon work was steady enough for Riley to strike out in a different direction.
“I really wanted to get away from working with the drilling rigs in the oil fields,” he explains. “I had done it all my life, and was tired of it. Working in the oil fields means days and nights, seven days a week, 13 months a year.
But even after forming Riley Industrial, the company remained largely dependent on cleaning and recoating oil and water-storage tanks. That continued until 1983, when Riley set a goal: Stop being 100 percent dependent on the oil/natural gas industry, with its frustrating and nerve-wracking boom-and-bust cycles.
“We started to diversify by getting into vacuuming up fly ash in big silos at two local power plants,” Riley explains. “Sometimes it’s so hot in there that the hoses catch on fire. At peak demand, I’m told those plants can lose $200,000 an hour in revenue when they’re down, so they don’t waste any time waiting for things to cool off. They want to get back on line ASAP.”
At first, Riley encountered tough sledding as the new kid on the power-plant block. The two local plants already had established long-standing business relationships with other contractors, so Riley says he literally begged for the chance to bid on jobs, starting with small tank-recoating projects.
“It took about 10 years to get in good with the power plants,” Riley says. “When they said jump, we’d ask how high they wanted us to go.”
DIVERSIFICATION RULES
Riley says he can’t emphasize enough how critical diversification has been to his business. Most contractors operate in two or three different industries, while Riley Industrial is active in nine or 10.
“With clients in different industries, your business is steadier, as opposed to boom-and-bust cycles,” he says. “In summer, we do a lot of water-tank lining for municipalities. In winter, we do maintenance work — sandblasting and recoating — when the power plants shut down for overhauls, one unit at a time for two or three weeks.
“In October, we go up into Wyoming and work all winter, recoating cooling-tower basins for coal-fired power plants. That’s five or six months of work.”
To become diverse also requires a willingness to travel — and the gumption and determination to tackle jobs other companies won’t. Riley Industrial works within a 500-mile radius of Farmington, which is in northwest New Mexico in the so-called Four Corners region, the barren and remote area where Arizona, Colorado, New Mexico and Utah meet.
“There’s nothing out here, so you’ve got to go a long way to get to anything,” Riley says. “Plus, we’re the only company of any significance that provides these kinds of services.
“Today, we’re loading up to go to Opal, Wyo., which is 500 miles away, to clean out natural-gas line filters and traps. No one else wants to mess with that stuff, and I never back down. I don’t know how to say no. Sure, we’ve stubbed our toes a few times … but we learn from our mistakes.’’
Diversification also requires the vigilance to spot new opportunities. For example, Riley noticed that the company’s one large water tank was always in use, both for hauling water to jobsites for cleaning projects and taking dirty water away for disposal. “So now we haul a lot of water,” Riley says.
In a similar vein, Riley noticed that many power plants were ill-equipped to keep large boilers from freezing if they broke down during winter. So the company now generates revenue through 24 large, portable, propane-powered heaters.
MAINTENANCE MATTERS
Riley has a knack for fabricating equipment, a skill acquired during his many years as a mechanic and machinist in the oil fields of West Texas.
“I’ve built 90 percent of everything we own, except for the vac trucks,” Riley says. “I started building my own equipment out of necessity, because we were undercapitalized when I started the business.”
For example, Riley couldn’t find sandblasting units that were easy to clean, so he developed his own. The units can be either unloaded pneumatically, or crews can vacuum out residue through a door on the bottom of the machine.
Riley is a stickler for well-maintained equipment. He still has the first pickup truck he ever bought (in 1970), his first air compressor (circa 1971), his first sandblasting truck (purchased in 1976) and his first vacuum truck (bought in 1982).
“We still use that first air compressor every day,” Riley says. “We use things until we wear them out. We’ll get 20 years out of a vacuum truck. I’m a nut about preventive maintenance.”
To stay on top of equipment maintenance schedules, Riley Industrial depends on software that tracks every detail about each piece of equipment. Riley developed the software in-house.
“I get a daily report on each machine that ran the previous day,’’ he explains. “It tells me everything that happened, from a broken windshield wiper to a funny noise in a transmission to a rear end being out. It tells us when the next service interval is, so we don’t send a vehicle out of town when it’s due for service.’’
Riley oversees 22 employees and is responsible for all vehicle repairs, maintenance and manufacturing. With so much equipment, it’s critical for the company to have its own repair and maintenance department to avoid machine downtime.
“If we have a truck go down, a dealer would tell you he’ll get to it next week,” Riley notes. “Hell, we’ll have it up and running by tomorrow.”
WONDERFUL WORKERS
Riley says his company’s success stems from its employees. To attract and retain workers, he says the company offers very competitive wages, a profit-sharing plan, bonuses and a 401(k) retirement program. Attractive wages and benefits are especially important to retaining field employees, who are often away from home for extended periods and do tough, dirty work. Riley Industrial pays workers a per diem and provides all transportation during out-of-town projects.
“These guys make good money — up to high five figures to low six figures,” Riley says. “They’re very dedicated workers who routinely put in 12- and 14-hour days. We have 75 or 100 guys who’ve been here at least 15 years, and many employees have brothers and/or sons working here, too. I like to think it speaks well of us as an employer.”
Riley’s sons help run the company. George Riley III, 51, is in charge of production and sales; Gary, 50, is the secretary/treasurer; and Glen, 45, is an equipment operator and coordinator. George Riley III’s son and two daughters also work at the company.
What’s the key to achieving harmony in a family-run operation? Mutual respect and delegation of distinct responsibilities that don’t overlap, Riley says.
“It’s good to give everyone their own area of responsibility,” he says. “That way there’s no hassling. It also helps that this operation is so big that no one can do it alone. It’s very demanding.”
LEAD BY EXAMPLE
What’s the key to being a successful manager of a large operation? Riley firmly believes in leading by example, and leaving people alone if they do something well, instead of micromanaging.
“I’m not a tyrant — a hollerer or a screamer,” he says. “I lead by example. There’s nothing my employees do that I won’t do, if necessary.”
Riley says his company’s future looks bright. Even in a deep recession, the company keeps expanding. “We reach farther and try harder,” he says when asked to explain his company’s success. “When we hear about something, we really pursue it.”
And keep on diversifying in the process.
