Michael Baker CEO Bergman outlines changes in engineering company
Kurt C. Bergman's big splash in Pittsburgh didn't happen when he became CEO of Michael Baker International LLC last year — the company didn't announce the move. It occurred in July when he announced Baker will move its headquarters to the top of the city's second-tallest building.
The $1.3 billion engineering company — formed by takeover a year ago — will move its headquarters and 65 workers from Moon to the top two floors of Bank of New York Mellon Center in December, Bergman said. About 400 engineering and other employees will stay in Moon.
Michael Baker's move will bring it closer to key clients, said Bergman, who is remaking the company — the 26th largest engineering company in the United States — into a stronger and more diversified company.
The former Michael Baker Corp. was acquired in October and taken private by Integrated Mission Solutions LLC, an affiliate of DC Capital Partners, in a $397 million transaction. The deal followed a nearly yearlong takeover battle that occurred after an 84 percent decline in Baker's 2012 profit, as government projects became harder to win. That followed a dozen years of problems during which Baker had four CEOs.
Bergman, who was CEO of IMS in Washington, now runs a company whose roots in Western Pennsylvania go back 75 years, when it was founded in Beaver County. It has about 6,000 employees, up from 2,900 at legacy Baker, in 80 locations and 37 offices in the United States and on five continents. Bergman spoke to the Trib about his vision for the company. Here are excerpts edited for length.
Trib: How will the new Michael Baker International be better able to compete?
Bergman: We said the best and highest value move that we could make was to create a bigger stronger, more stable company by bringing in big front-end engineering capabilities. IMS was a services-consulting company, with some engineering capabilities, supporting government entities overseas. When we looked at the market, Baker was the one that came to the front of the pack. It's a very strong, stable company, with extremely talented people and an extremely strong reputation. By tying an engineering company that was strong in United States with IMS' international and technology portfolio, we believed we could cross pollinate and create stability.
Trib: How is the merger integration progressing? What has been done and what remains to do?
Bergman: Our biggest focus is to make sure that we stay as a local provider — but with a global reach. The reason for that is our business is a very local; it's about relationships — the people we bring to the table, our local experts who know the business and the cities we serve. Now they can reach back into the bigger Baker, grabbing technical expertise as needed. One of the things Jeff (Hill, chief operating officer and a 23-year veteran at Baker) and I have done is look at the way we were organized. It wasn't working. People weren't focused enough on local markets. Their view was more national than local, and we saw ourselves shrink.
Trib: Did competitors take business that Baker traditionally won?
Bergman: We retracted in Pittsburgh from about $105 million to $85 million in sales over seven years, work that was executed in this area. Seven years ago, the company decided to realign from a focus on offices and regions toward business markets and practices. In one of the first meetings I had with Jeff, we said it's time to go back to an local-centric organization. And not just supply the services of legacy Baker, but the bigger services that the broader company brings to the table. One of those is technology development. We have a technology division in Alexandria, Va., that does software and application development. We're tying that capability with our engineers, especially our young engineers, the folks that think technology.
Trib: What do you want Baker's reputation to be?
Bergman: As a new person in Pittsburgh, running the company and meeting other industry leaders, I find they say, ‘I know Baker, you're a civil engineering company, right? You do transportation?' I say no, actually we're the No. 1 national environment permitting company in the United States; we're No. 1 in developmental planning on the West Coast; we do a lot of oil and gas pipeline work; a lot of permitting, a lot of environmental and water quality work. We're the 26th largest engineering company in the United States today.
Trib: What emerging markets are you focusing on? Are they geographic or product markets?
Bergman: One of them is our water development team. We've put together a national water practice, with a heavy presence in Pittsburgh, Irvine, Calif., Alexandria, Va., Virginia Beach and North Carolina. Every single region, city and municipality in the country is faced with water quality issues — what are the contaminates, where does the runoff go, how does it contaminate rivers and sewage water. There is a lot of data out there that's hard to get to. Our water tech folks said if we access that and deliver it to our clients and allow them to do an assessment, it gives them an estimate of cost and magnitude of the work they need to do. That becomes something that differentiates us, and clients come back to us to do this.
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or email@example.com.