Johnston Construction Company History

The company

Johnston Construction Company (JCC) is a design-build environmental construction contractor located in Dover (York County), Pennsylvania. Johnston’s experience includes the construction of treatment facilities and pumping stations for both industrial and municipal clients. Johnston has the capability to self-perform all phases of this specialty including excavation, concrete, utilities, electrical, mechanical, and plumbing.

In 1976 Johnston Construction began as a subsidiary of a northern New Jersey mechanical contractor. In 1983 Johnston Construction was established as an independent employee owned company by Ken Johnston and Chuck Zitnick. Initially, Johnston’s service area was central Pennsylvania, but over time our area expanded to include Pennsylvania, Maryland, New Jersey, Delaware, Washington DC, Virginia, West Virginia and Ohio.

Some pre-history

Johnston came from the unplanned but fortunate joining of several individuals and companies in the mid 1970’s. As mentioned, the name first appeared as a subsidiary of Remsco Associates, a mechanical construction firm that started in the late 1950’s. At this time Remsco wanted to form structural and concrete capabilities and used personnel hired from J E Brenneman Company of Philadelphia and Tobias Construction Company from that same area. The group was headed by David Robinson, an experienced heavy construction manager from Peter Kewit and Sons. Dave was a capable leader and mentor who preferred to develop younger engineers into well formatted managers using his methods learned from Kiewit. His group of Peter Getchell, Ken Johnston, John Tench and Chuck Zitnick proceeded with Dave to construct several usually successful projects. The principals of Remsco Dick Molke, Bob Sampson and Ed Shuman, heading the treatment equipment manufacturer Lyco ZF, were interested in continuing what was now a full scope environmental construction firm.

At this point the Remsco principals decided to further expand by moving operations westward in Pennsylvania by oversight from Dick Molke as a new firm which was named Johnston Construction with Ken Johnston as president and later with work increase, Chuck Zitnick as vice president. The new firm operated as an open shop construction firm as this was the typical format in central PA. Dave and other members of his group continued other Remsco projects but later moved on to other companies and projects by the 1980’s.

Subsidiary company history

After incorporating in Fall of 1976, the company started operations in a rental office near Ken’s then home in Lower Merion Twp. Estimating was done by Ken and the Remsco office. Chuck had a minor connection although still working for Remsco. After a successful bid in 1977 for the Palmyra PA sewer plant, Ken started looking for home and office space near York, PA as a long-term base for the company. More successful bids occurred for a Lancaster PA pump station, Carnarvon Twp sewer plant. This prompted transferring Chuck Zitnick to Johnston Construction in 1977 and moving to York in 1978. Ken built a workforce at the Palmyra jobsite which was then spread to other new jobs along with new hires. The company was fortunate that being an open shop firm there was much flexibility in hiring while at this time there was availability of union trained craftsmen from a declining number of union staffed projects. Since Pennsylvania has required prevailing wages on public jobs, we were able to meet pay expectations.

In obtaining low bids, Johnston seemed to have an unusual experience in arriving at the awarded bidder position. For Palmyra, we were the 2nd to the low bidder who then claimed a mistake and was able to withdraw. For the Lancaster pump station, we were again 2nd to a large, experienced contractor who did not use the required pump manufacturer, and their bid was discarded. At Carnarvon we expected to take the separate mechanical bid but were 2nd and we were low on the structural bid, a little too low in hindsight. For our 4th bid at the Manheim water plant, we were read as 2nd bidder on a form with bid items. Later when the bid form math was checked, the low bidder added wrong, and we were declared low with correct addition.

After this early set of projects, the company went on to spread the territory and collect some larger projects including those for Washington Suburban Sanitary Commission and Fort Detrick, MD. Remsco was still estimating for us and somewhat to our dissatisfaction with pricing levels. At this time, we started to add managers. Three of these were with the company for the long term, Anil Godhania, Ned Beshore and Lois Jacobs respectively as project engineer, later vice president; project engineer, later manager; and office manager. We also had to start departing from Dave Robinson’s method of putting engineers onsite and using craftsmen to manage sites.

Ken and Chuck started working more from the office and taking over the estimating along with our engineers. In this period there was a need for more space and in December 1979 we moved to a purchased property in Dover Twp northwest of York. This property had a house we converted to the office and a barn and land for storage. After many improvements, this property remains our home office to this day. Along with parallel managing and estimating tasks, Ken worked with accounting and Chuck with bid managing, insurances, equipment and property. We had a psychology early on of being frugal on purchased equipment, and it did take years for Chuck to learn to buy big enough equipment items.

In the late 70’s and early 80’s we managed to successfully bid more public water treatment work and start some smaller rigging jobs for AMF and SKF in York and Hanover. We teamed with Remsco to install two large solvent recovery plants for RR Donnelley in Lancaster, PA and Greenville, SC. We also worked using the manufacturing arm of Remsco, Lyco, seeming to at times have intercompany items to resolve. Once they shipped a large (8’x10’x16’) steel pump station on too light low bed. It arrived late due to hills, and the shipping cover was sheared off probably on a highway bridge. When we backed the truck to the excavation ramp, the drive shaft dropped out, but we got it crane rigged with a dead truck alongside the excavation.

In our early years company history included other amusing, interesting and one tragic occurrence. These probably occurred from inexperience, poor planning, and lack of today’s attention to safety practices. In the winter of 1977, 78 heavy snowstorms filled some job excavations causing complete project shutdowns. At Carnarvon we had to blast rock for the main tank. Our blaster loaded a shot too heavily and did not use the mat thinking there was ample clearance. On the blast, the shot rose 100-200’ high and proceeded to fall in a line directly at the job trailer. Heavy rock pieces continued to drop to, on and past the occupied trailer. A couple of our pump station projects experienced flooding problems including stream flooding, rising to the door thresholds of a 20-30 deep drywell full of mechanical/electrical equipment. In Nanticoke PA our crew failed to check valve closings and this time we flooded a deeper drywell requiring major cleanup.

Sadly, a major tragedy occurred in September 1979 when a crane hit a powerline while rigging pipe at the Carnarvon site. Two employees, Harold and Gary Conklin were instantly killed by electric shock. This awful accident lesson stayed with our awareness of construction hazards for years to come. We are confident that we are far better safety aware in the present.

Johnston Construction Company history as an independent employee-owned firm

The most interesting portion of our history came about in 1982 and 1983. During a visit from Dick Molke, who was our connection at our parent, Remsco Associates, the subject was broached of spinning off Johnston as a separate firm. The prospect of making Johnston Construction was highly interesting to both Ken and Chuck. For a period, it appeared the offer might be to transfer the full Remsco operation, including Johnston to an employee group. Fortunately, this approach did not go far due to philosophical disagreements with Remsco employees, and a plan was developed to only split off the Johnston subsidiary.

We accomplished the split in a rather innovative manner by converting to employee ownership. This concept was then coming into wide use, but not much in central Pennsylvania. The separate company was financed by transferring the assets of a Remsco profit-sharing plan handled by Bob Sampson into a newly established Johnston stock bonus plan. In addition, Ken and Chuck added equal personal monies, and Remsco gave a shorter-term working capital loan. These funds totaled about $250k to 300k. During this time there were several discussions on who handled accounting and insurance, compensation, etc. Ken and Chuck wanted the maximum separation possible from the start and for most part accomplished that desire. There were some difficulties splitting assets but for most part was accomplished amicably.

The reasons for the separation of companies by Remsco were mostly to consolidate operations considering future owner retirements. Additionally, it may have been that Johnston was not as profitable as they desired. Some of the accounting charges were a little obscure, making this comment uncertain. Ken and Chuck certainly made some mistakes, and one might say Remsco paid the tuition for our future successes. The negotiators were enthusiastic to see the split proceed. The split was final in the fall of 1983.

Once the split was done, we seemed to drop back to our initial curse of difficulty in getting work. This was a recession period, and inflation was high and work difficult to acquire. Looking back, it did seem a little crazy to take such chances in this difficult period. Our first low bid was for a tank foundation subcontract that was never awarded. Our second low bid was a PA hospital sewer plant that also appeared that it would not be awarded. Our third low bid was a little too low, and the second bidder withdrew claiming a mistake. This was a $2 mil+ bid, and we were leaving almost 20% on the table. After an anxious couple weeks of review, we did take the job, and it turned out to be quite profitable. That other PA plant also later did award. Early 1984 thus proved a disconcerting, but successful in the end.

As the company operated and grew, we continually looked for a way to increase private industrial work. Our continual work by public bidding was successful but limited by the expertise of competition and no matter what a firm’s ability, a low bid got the job.

One avenue in the early 80’s turned out to be water tank/tower foundations. These were public bids by major tank companies that only wanted to build a tank and have a subcontractor to handle the foundation, concrete, site, mechanical and electrical as a sub-GC. Chuck once worked (my title was “hey kid”) for Chicago Bridge and Iron and knew the market. Over 40+ years we developed a continuing book of business that was profitable and continues to the present under Trey Johnston and Marty Workinger. Here in the 2000’s Jody Dissinger is usually the tank superintendent. The company has built over 100 foundation projects and is still counting. We are known as the go-to firm for this specialty throughout the Mid-Atlantic and beyond.

Another substantially larger industrial avenue was started in the mid 80’s by Ken and Anil building environmental locally for RCA and Waste Management. These projects were much of the corporate annual revenue in the late 80’s and early 90’ss, totaling in the $20 to 30 mil range at 10+ sites in PA, MD and NY. The projects were hazardous waste cleanup and treatment with RCA and; leachate treatment, storage and flame off for Waste Management. While we still had to compete for this type of work, the margins were better and the competition was more limited.

The hazardous cleanup and landfill projects lead to the formation of a parallel specialty firm, Remediation, Inc. This work mentioned above was a need created by federal and state regulation coming from increasing public concerns about long-term pollution and the Clean Air and Water Acts. Johnston always had an interest in environmental work, but this new specialty brought with it major training, certification, safety, insurance and liability needs. We entered this market early with successes and stayed through the 90’s. Over time the costs, liabilities and competition seemed to “swamp” any chances to operate profitably and we slowly exited this specialty but learned many good lessons.

Johnston Construction Company history moving into 2000’s

Our company has and does continue to thrive by doing similar work to the above but with many changes in people, talents and opportunities. We continue to have a good, skilled, competent group.

By this calendar milestone our corporate status and abilities with the employee-owned format were nicely settled by us and used by many other area companies in many pursuits. Chuck managed the admin of this ESOP program, and we tried to publicize it was a viable benefit along with the 401k plan and bonuses in profitable years. It was once amusing to hear rumors questioning if this future payout was real. Yes, it did start for eligible retirees, and it was/is real.

With time, the company has expanded revenue, profitability, and territory. We did plan in succession of management because we all age out. Being employee owned not family owned finding leaders is necessary, hopefully from within.