Case Studies

Duct Fabricators

Fabricating sheet metal like nobody’s business

Most people look at the Cleveland skyline and see a wall of glass and steel; Patricia McElroy, CEO and CFO of Duct Fabricators Inc., sees a legacy of jobs well done. Founded in 1962, her family’s business has installed HVAC ductwork in many of Cleveland’s most notable buildings, including the Quicken Loans Arena and the Rock and Roll Hall of Fame.

Those buildings, along with many newer and more impressive towers in Ohio’s third largest city, were part of a downtown revitalization in the mid-90s and early 2000s that created a temporary boom for HVAC contractors, but has since slowed.

Duct Fabricators

McElroy, who runs the company alongside her brother, John Sickle Jr., says Duct Fabricators has continued to thrive after the building boom because it has switched to renovating medical facilities, expanding its services and taking advantage of its large, custom sheet metal shop.

Heavy metal

When McElroy’s father, John Sickle Sr., and his partner, Steven Haydu, started Duct Fabricators, they wanted to fabricate their own ductwork, not just install it. So they equipped the organization with a custom sheet metal fabrication shop. In addition to ductwork, the metal shop lets the company fabricate customized metal doors, catwalks and supports—a capability few other mechanical contractors can match, though many have tried.

McElroy says that a slew of mechanical contractors trying to take advantage of the construction boom in the late ‘90s and early 2000s thought they could gain a competitive advantage by starting their own metal shops. But they didn’t count on the huge overhead and maintenance that an industrial sheet metal shop requires.

“You have to buy these giant, million-dollar pieces of equipment and the building space to put them in and then you’ve got to pay for the maintenance and electricity to run it all,” she says.

Duct Fabricators

Because Duct Fabricators has, by McElroy’s estimate, one of the largest metal fabricating shops in the city—and because the initial investment is in the rearview mirror—it has been able to take on larger projects that smaller shops simply can’t.

Though many of those projects have included skyscrapers that punctuate the air above the rock and roll capital of the world, some have taken place deep beneath the city’s sidewalks. That includes an elaborate, subterranean air conditioning and ventilation system that Duct Fabricators installed for the Northeast Ohio Regional Sewer District to prevent overheating in seven dewatering pumps and two emergency pumps located 250 feet underground.

New markets

Duct Fabricators has also weathered the slowdown in Cleveland’s construction market by doing modifications and renovations. Some of that work still happens on high rises, such as ductwork it performed for a Hyatt hotel in preparation for the Republican National Convention, but much of it involves renovating medical facilities like hospitals and clinics.

That’s not a coincidence. Health care has been taking off in Cleveland since the early ‘90s. CNN reports that the number of workers in manufacturing decreased by 41 percent, while the number of health care workers rose by 55 percent. Though manufacturing is still Cleveland’s biggest employer, the city is gaining a reputation for its Health Tech Corridor, a 1,600 acre stretch of downtown that includes advanced clinics, research universities and over 130 biomedical and biotech companies.

Installing the heating, cooling and ventilation systems in medical facilities presents its own challenges in the form of strict regulations and health code requirements, McElroy says. Duct work must have fire damping devices in the system and workers must be careful around sensitive and expensive equipment that can be damaged by dust and vibration. When they renovate operating rooms, Duct Fabricators wraps ductwork in heavy plastic before shipping it to the site to prevent contamination.

But instead of bemoaning stricter health and fire code requirements, Duct Fabricators has turned them to its advantage. McElroy says they are one of very few companies in the U.S. to be a certified Fire Life Safety Level 2 Contractor. The certification with the independent company lets Duct Fabricators inspect ductwork for fire safety issues, which it offers as an added service, alongside certified duct cleaning for commercial and industrial facilities.

“It’s been a long ride,” McElroy says of the certification process. “We had to take a lot of classes and pass a lot of tests, but we were one of the first to jump on board.”

Tight times

Added services have helped the company thrive, even as margins in the industry have shrunk over the past 10 to 15 years, McElroy says.

“It’s the economy,” she says. “It just pulled everything down.”

As recently as 2016, Cleveland ranked second on the Economic Innovation Group’s Distressed Communities Index, designating it as one of the areas hit hardest by the Recession. Although McElroy says Duct Fabricators has weathered that storm, it has still had to tighten its belt and find ways to work more efficiently.

Duct Fabricators

“I used to have an assistant bookkeeper and several clerks secretaries; now I handle a large portion of the accounting and cost control myself,” she says.

Being a union shop has helped Duct Fabricators manage labor costs by letting it scale skilled manpower up and down for projects, McElroy says. However, she fights to keep her most tenured and skilled employees year round, especially during tight times.

“We have senior sheet metal workers who’ve worked with us for over 20 years and we don’t want to lose them,” she says.

Family Tree

The family has also stabilized its business against the economy by branching out. Duct Fabricators is one of three companies controlled by the Sickle family. The other two are Ohio Fabricators Inc., a sheet metal and HVAC contractor in Summit County and Breining Mechanical Systems Inc., an HVAC sheet metal contractor in Massillon, Ohio.

Ohio Fabricators was the second addition to the so-called Fab 3 group in 1970, and was a way for Duct Fabricators to expand from Cuyahoga County to Summit County. Breining Mechanical Systems was added in 1989 and was the first business added by the second generation of the Sickle-Newman family.

McElroy says that companies will occasionally refer jobs to each other, but that they’re separate entities. “It’s really about reaching different regions,” she says. “But we consider Duct Fabricators the granddaddy of them all.”

Though Duct Fabricators has felt the effects of city, state and nationwide trends in building, McElroy doesn’t seem too concerned with trends.

The company has seen the economy rise and fall dozens of times and rather than stake its success on trying to predict Cleveland’s future, she says the secret to thriving in new markets is as fun as it is simple: “You have to rely on some creative thinking.”

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Spring 2018



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