In Stockton, California, Gray Construction is known as the company that worked wonders under stiff construction deadlines for Kyoho manufacturing plant, a Toyota Motor Corp subsidiary.

The firm is now set to produce stamped and welded chassis parts for the New United Motor Manufacturing Inc assembly plant in Fremont, California. According to Yasuyuki Wakayama, Kyoho’s executive adviser, Stockton is becoming “famous” in Japanese automotive circles because of how the plant development process progressed.

Advertisement

Gray is a design and build company specialising in engineering, design and construction for the automotive, distribution, manufacturing and food and beverage hospitality markets. The firm also earned its reputation recently in Texas when it completed design and build projects in its quick, nimble style for Toyota suppliers such as Toyoda Gosei, Takumi, and a construction project for Toyota Tsusho. Gray is now preparing for an encore performance in Mississippi, where Toyota and its suppliers are building new plants.

“A real milestone for us was when we crossed the 250 mark in projects for Japanese companies. I sometimes joke that we should be paying Toyota instead of Toyota paying us,” says Jim Gray, Gray’s CEO and president. The 258th Asian project was awarded in September 2007.

Japanese style

Adopting Toyota’s open-floor model for plants and offices in its architectural design and building plans has become the new deal for Gray and its customers.

“Do you want a Toyota factory in Mississippi, a one million square-foot IKEA distribution centre in Tacoma’s seaport area, or a process plant for bottled water in Las Vegas? We’re the guys,” says Gary Hisel, a senior design manager based in the Gray headquarters in an old but stylish department store in Lexington, Kentucky.

The private, family-run company posted about $438m in total sales revenue in 2006, versus $393m in 2005. Indeed, annual revenue for Gray and its affiliates has steadily climbed, almost doubling since 2002. Mr Gray anticipates a profitable 2007, based on current sales. He is projecting $525m for the year. “More than 30% of our business is with Asian customers, and about 60% is internationally based,” he says. Gray does business in 47 of the 50 US states.

No prefabricated ‘cookie cutters’ for this company. “What we do is a customised deal, delivering to set expectations within a customised model for each customer,” says Mr Gray. These days, Gray executives jet off to client meetings and trade shows in Japan, Sweden, Germany and other offshore locales. But it was not always so glamorous. The company grew from a few employees building a barn and working on the Gray farm in Glasgow, Kentucky, in the 1950s.

Early difficulties

Gray struggled in its first decade and again after founder James Norris Gray died of lung cancer in 1972. The turning point finally came in the 1980s when Gray began its manufacturing focus.

Japanese transplants were beginning their migration to the US in the late 1970s. Pivotal was the Toshiba assembly plant in Lebanon, Tennessee. Gray’s Japanese manufacturing customers in the US include Toyota, Hyundai, Hitachi, Kyoho and Toshiba facilities.

In 1984, Hitachi Automotive awarded its first overseas construction project to a non-Japanese contractor. That was Gray. Then, in 1985, Gray won its first Toyota contract, building the Toyota assembly plant in Georgetown, Kentucky.

Toyota, then a newcomer, now employs more than 40,000 people in the US, and is rivalling General Motors Corp to become the world’s largest car manufacturer. Efficient, airy Japanese-influenced design structures have become the standard model for Gray’s Asian suppliers and manufacturing plants. All the work is done in US facilities, although Gray hires out some project work as needed. The company employs a handful of Japanese and Korean employees who speak the native languages and have requisite technical skills.

Open design

“We’ve adopted Toyota’s open-office model, no cubes or walls, in our construction projects,” says Mr Gray. “We see the Japan influence more often with our European, German and Korean customers, although key executives are choosing glass wall doors.” The open design improves efficiency and communication, and it is easy to move people around as teams move, he says.

Gray also has worked for major brand name companies such as Nestlé, Procter & Gamble, Ikea, Gap and Lowe’s. One offshore customer coup was Gray’s Ikea contracts, building warehouses for the quickly expanding housewares chain. Who says you cannot have something affordable for everyone under one roof in an upscale setting? Ikea is proving doubters wrong – and Gray has been along for the ride.

The firm also focuses on the huge component-making enterprises that rush to support major manufacturers and original equipment manufacturers or transplants.

The construction industry has been affected by the US housing market slump, but Mr Gray remains optimistic. “I think it’s going to improve,” he says. “We’re still seeing a high level of capital spending. The main business for us is retail distribution and manufacturing. Japanese components and food and beverage industries have remained sustainable, regardless of the slumps in automotives and housing,” he says.

Retail distribution has its ups and downs and the automotive sector historically has wild swings. As Detroit and domestic suppliers declined, transplants have increased.

International trends

Some of the global trends that Mr Gray sees influencing the building industry are environmental design, increased integration of design and construction, and the use of computers to generate blueprints.

Apart from the obvious need to stay on top of these fast-moving trends, Mr Gray cites a strong customer focus – and a dash of good old southern hospitality – as integral to continued growth of the business. “We put out the welcome mat to international businesses and our customer base everyday,” he says.

 

COMPANY PROFILE:

GRAY CONSTRUCTION

Headquarters:

Lexington, Kentucky

Founded:

1953

Total Employees:

500

Satellite offices:

Bowling Green, Kentucky; Richmond, Virginia; Birmingham, Alabama; Austin, Texas; Tokyo, Japan

Sister Companies:

ICE Building Inc, Anaheim, California; WS Construction, Versailles, Kentucky; Operations Associates (consultancy), Greenville, South Carolina