It wouldn’t be an exaggeration to say that Mike Shuemake got “railroaded” by the State of California, but most likely his Central Valley Trailer Repair will come out all the better—eventually.
Here’s the story, as Shuemake tells it during a wide-ranging interview from his new office:
Fresno-based CVTR’s headquarters had been in a post-war GMC dealership, “an old beater building” with “a very minimal retail area” and a location that was “not easy to get to.” But then the state decided to move ahead with its high speed rail project, and began to acquire land. After 32 years, CVTR was suddently going to have to find a new home—which, for the largest dealer of new Great Dane trailers in the western U.S. and winner of the 2014 Great Dane Dealer of the Year award, might not have been a bad idea.
But it wasn’t going to be easy.
“They said we’re either going to buy you out or take you out, through eminent domain,” Shuemake says, and thus began a two-year process of negotiation. “I was trying to find a place I could move to without building a new facility, and I looked from Kingsburg to Chowchilla [40 miles either side of Fresno on Highway 99] and there was nothing available. So I found a piece of dirt and started building.”
A mile and a half away, in fact; in a developing, modern industrial and logistics area just a block or two from Highways 99 and 41.
“At my age, I could’ve just taken all the money from the building and said, okay, I’m done—but I had 60 employees I didn’t want to do that,” Shuemake continues, before adding with a laugh, “So I figured I can pay it off by the time I retire—at 102, or something like that.”
While he had “a general idea” of what CVTR need in a new facility, Shuemake visited Great Dane locations around the country with a very direct purpose: “If you could have done something different, what would you do?” And the plans he and the architect developed were straightforward: arrange departments so that “people don’t have to run all over the building.”
But with a “fairly limited” budget, the new facility couldn’t be substantially bigger than the old—it just needed “to work.”
“We still spent a heck of a lot of money—and, for the most part, we got it pretty good,” he says.
The 60,000 sq. ft. facility features a 20-door service area with a paint booth and trailer wash section, administrative and sales offices, and a parts display and order area, among other improvements.
California’s not all sunshine
But doing business in California isn’t easy. Shuemake is quick to say “there are no advantages—none.” And the eminent domain process was just the beginning.
As Shuemake discovered, federal, state, and local governments place a lot of demands on new construction—for a long list of expensive items CVTR had gotten along fine without in the previous facility. He points immediately to the large, women’s locker room in the shop: As much as he’d gladly hire a female mechanic, he’s never even had one apply.
Essentially, the state needs to apply some common sense to its requirements, however well-intentioned they may be.
“I haven’t had too many folks come in that are blind truck drivers,” Shuemake says. “That’s the kind of thing we have to deal with, and it takes up a lot of real estate. If I look at a Dallas or an Oklahoma City, I don’t see that kind of investment that had to be made just to be compliant with certain rules.”
For another thing: “Some dealerships have multiple stories, and I just didn’t want that. You have to put an elevator in, and in California it’s difficult.”
And another: The parts storage area is a lot more spacious, but it wasn’t cheap, and that much space is arguably unnecessary. “At some point, the budget says ‘STOP’ and you can’t build anymore,” Shuemake explains. “At the old place, we probably had 10 trailers sitting on the ground that we had parts stored in. But now, with the new facility, I couldn’t have trailers sitting on the ground that weren’t sprinklered.”
One more: “If you got to most dealerships, they’re surrounded by chain-link fence. We’re surrounded by a wrought iron fence to a certain specification. I spent $80,000 on landscaping, and I’m sure my customers couldn’t care less,” he says. “But it does look good.”
Also on the upside, the company is spending less on power due to energy efficient lighting, he adds.
He also points to the regulatory challenges the broader industry faces in the state, and with CARB (California Air Resources Board) compliance in particular, “since we do a lot of refrigerated trailers.”
“We’ve got a pretty healthy rental fleet that we had we had to upgrade—and we spent half-a-million bucks dealing with that,” Shuemake says. “Now they’re trying to change the rules again to go to electric standby, and that’s going to get expensive.”
Indeed, as chairman of the Refrigerated Carriers Conference for the California Trucking Association, he’s recently met with state government officials to ask for equal enforcement of the rules. He notes that the CARB Transportation Refrigeration Unit (TRU) regulation has been in force since 2009, but the agency reports only a 60% compliance rate.
“The problem is that they write these regulations, and all of us that have brick and mortar and skin in the game pay a lot of money to get compliant—then they don’t enforce the rules on everybody else,” he says. “So now you’ve got a guy that didn’t spend half-a-million dollars, doing the same thing we’re doing, and his rates can be less because he didn’t make the capital investment. With our customers, it’s the same problem. You’ve got guys in the trucking business that are dictating what the rate is, based on the fact that they didn’t spend the money to be compliant. One of my customers spent almost $2 million.”
Construction began in November 2015 and took about a year. The state had given CVTR until that September, but Shuemake extended the lease: “You can’t kick me out—get real,” he recalls.
When the time came to move, “I told my guys I wanted to close at noon on a Friday, and on Monday morning I wanted to be open,” he says. “And we did it.”
That included recruiting Shuemake’s son Scott, “who’s pretty good with IT stuff,” to spend a month outside of his day job as an event planner to coordinate the installation of the phones and computers, working alongside his brother Christopher. The weekend included some long hours—especially to get the parts unloaded—but no all-nighters.
“There was a piece of paper on the desks of every employee Monday morning when they came in, letting them know what to do,” Shuemake said. “I spent the next week going to each department and I’d say give me your punch list for today—not only building-wise, but does the computer work, does the phone work, does the printer work? As big an undertaking as it was, it was pretty painless. We were able to accommodate the first person that came through the door for a part and print an invoice.”
And corporate representatives from Great Dane had scheduled a meeting for Tuesday. “I told the parts department, ‘if nothing else, I want the front display area to be presentable for my big customers,’ and they got that done,” Shuemake recalls. “The back of the house? You don’t want to see how the sausage is made.”
While “there’s only so many ways you can stack parts,” Shuemake worked with the parts staff on how they wanted the display area to look, what they wanted for gondolas, etc. Among the upgrades, the storage area includes new and taller racking—although, Shuemake admits, he learned only a week before the opening that he now needed a racking permit from the city.
A quick tour
Among the improvements to make the parts area “a lot nicer,” air-conditioning was high on the list. The flow from parts to the shop is also more efficient. The parts and service areas are now easily identified and accessible (compared to the previous location, where first-time visitors often wandered into Shuemake’s office).
In the front of the building, the sales staff now has a large conference room to accommodate customers who bring along several people to work through orders.
Outside, the 12.5 acre lot, about 3 acres larger than the previous location, is organized into rows of the units recently sold, those under repair, and those available for purchase. A side lot is used for the CVTR rental fleet, as an area for customers who need 24-hour access, and as a “boneyard” of assorted equipment.
The prominent addition to the shop is the paint booth, replacing what basically had been breezeway with a tarp on each end in the original facility. But again, “in California that’s not easy to do,” Shuemake again points out. CVTR “spent a fortune” to run gas lines to the heated booth—except, of course, in the Central Valley a heated booth isn’t really necessary.
“But the quality of work we’re doing now is better than it was, and it’s worked out pretty darn well,” he says.
The new facility also features a comfortable waiting area for drivers, adjacent to the service writers’ desk. And the mechanics’ break room also room is “lot nicer than the old place.”
Some 80% of the trailers CVTR sells are from stock, built to a “West Coast spec.” “We bring in that trailer because it’s a good, solid reefer than will handle truckload produce, that type of thing,” he explains. “Guys can come in and say, ‘need it, gotta have it, let’s go.’”
CVTR also offers specialty equipment, and the new shop offers new possibilities. “We actually just built a trailer for hauling 16-ft. diameter wine tanks,” Shuemake says. “On trailers, there’s pretty much nothing that we don’t do.”
Service trucks are getting to be a “bigger and bigger” part of the business for CVTR, he adds. The company now runs five trucks from Fresno, and another from the Stockton location. “We can do the work in the customer’s yard, and not have to mess around with transport,” Shuemake says. “We can work on ten trailers a day instead of only getting three done.”
The service trucks are also used for roadside repair, with mechanics on call 24/7. But that entails having people you trust “with the keys to the kingdom,” he points out.
The shop area does have room to add another 10 mechanics—assuming he can find them. The philosophy at CVTR is to “home grow ’em,” by bringing in young people and teaching them the trade—and being ready and willing to deal with the inevitable “screw-ups.”
“The problem is the service manager wants to sell every hour,” Shuemake says. “Well, you can’t sell every hour when you’ve got a guy looking over somebody’s shoulder who’s learning. So let’s just set up a work order that says training, and every month look at to see where we’re going.”
CVTR has never had a retention problem, Shuemake adds—but many of his mechanics and technicians are getting older. And while the new facility is certainly an attractive draw, there simply isn’t a substantial pool to impress.
With a Utility Trailer Sales location just a couple of blocks away, Shuemake—who had been with Utility before launching CVTR—is quick to note that he “doesn’t mind” good competition, it’s the “fly-by-night” trailer repair companies that are a problem.
“It’s some guy with a pickup truck and an air hammer, on a piece of dirt out somewhere,” he says. “We’ve got a lot invested, real mechanics, insurance. Getting into this business isn’t that expensive if you run it out of a pickup.”
And how about the new bottom line for CVTR? Is the company hitting Shuemake’s absorption goal: “We’re not going to do any more dollars here than we were able to do at the old place. We have some efficiencies to be gained, but we took on a pretty hefty nut and we’re still trying to figure out whether we’re there yet—but we’re close.
“And I think Great Dane is pretty excited about the way the facility turned out,” he suggests. “But nobody’s going to get to ride the high-speed rail in our lifetime.”
EDITOR’S NOTE: On Oct. 13, the former CVTR rental and leasing building burned to the ground. A trash fire started by one of the homeless people who have occupied the site is a suspected cause. A year after CVTR surrendered the facility to the state, the High Speed Rail Authority has yet to begin improvements on the property.