Ledcor Industries Limited - Company Profile, Information, Business Description, History, Background Information on Ledcor Industries Limited

1000, 1066 West Hastings Street
Vancouver, British Columbia V6E 3X1

History of Ledcor Industries Limited

Ledcor Industries Limited, based in Vancouver, British Columbia, is a construction company with more than 50 years of general contracting experience throughout North America. In 2000, Ledcor described itself as the second largest contractor in Canada and the largest open shop contractor. Ledcor is active in building construction, civil construction, telecommunications and industrial construction. It has branches in Vancouver, Toronto, Edmonton, Calgary, Denver, Seattle, Reno, Washington, and Quebec City. Senior employees are shareholders in the privately owned company.

1940s Beginnings

Ledcor Industries was founded in 1947 in Edmonton, Alberta. Founder William Lede dreamed about building a global company through consistently excellent performance, top-notch construction, responsible fiscal management, outstanding customer service, rigorous safety training, and accountability in every corporate practice. Lede dedicated his company to quality workmanship and personalized service.

In the beginning, Ledcor was an earthmoving contractor providing services in Edmonton and surrounding area. The company's first significant project was to build the access road and well site for Imperial Oil's oil discovery, Leduc No. 1.

After successfully completing work on this historical project, the company enlarged its construction operations and began providing services to the resource industries and to the public sector. Public sector activity was in a growth period at that time.

Gradually, Ledcor moved from earthmoving contracts to civil contracting. It built highways, buildings, dams, as well as carrying out rock blasting and excavation. It also tackled utility construction, and by early seventies was moving into pipeline construction. In 1971, Ledcor started a small inch gathering system contractor that was later to become the pipeline division.

By the early 1980s, David W. Lede was chairman and chief executive officer. Under his leadership, the company undertook a strategic review and planning initiative. The outcome was the decision to expand geographically and to diversify into other construction operations. Over the next few years, Ledcor expanded throughout North America. They opened offices in Vancouver, Toronto, Calgary, Seattle, and Reno. The corporate head office moved from Edmonton to Vancouver.

During this time, Ledcor broke into the building construction market by purchasing a small company. Thus began the Industrial and Mining Construction Divisions of the company. Ledcor also entered the oil and gas well servicing business, while the Civil Division expanded to include underground installation of fiber-optic cable. They created six construction divisions: Civil, Mining, Telecommunications, Pipeline, Industrial, and Building Construction.

This restructuring process was initiated during one of the most severe construction slumps ever to occur in western Canada. Thanks to the restructuring, Ledcor was able to accomplish substantial growth despite the economic downtimes of the period.

Challenges in the 1980s

However, not everything was smooth sailing. In 1985, Ledcor was awarded two government contracts worth $12 million to work on BC's Coquihalla Highway. Controversy erupted regarding Ledcor's hiring practices, initiating one of the very few scandals ever to touch Ledcor. According to Peter Comparelli's article published in the Vancouver Sun, NDP Labour Critic Colin Gableman argued that Ledcor had recruited employees from Alberta, despite a contractual obligation to hire BC workers for the project. Ledcor denied the allegations, saying that only four out of five supervisors were Albertans and that other workers were from BC. Gableman retorted that, "All Ledcor did was to encourage the Alberta workers to switch their Alberta plates to BC license plates." Gableman also alleged that Ledcor was trying to keep union organizers out of the work site. Alberta is generally viewed as being friendly to industry while BC is thought to be friendly to organized labor. In time, the controversy died down and work on the highway continued.

In 1987, Ledcor Industries and Consolidated General Western Industries, also from Vancouver, agreed to merge their operations through a share exchange. At that time, Ledcor's primary operations were in British Columbia, Alberta, and Ontario. It owned 30 percent of Consolidated General and indirectly owned 25 percent of Inter Cable Communications Inc. Consolidated General was a public diversified investment and holding company. The transaction gave Ledcor 75 percent controlling interest in GWI. The latter changed its name to Ledcor Industries Limited.

Also, in 1987, Ledcor launched its communications division. The Ledcor division designed, engineered and built communications networks for telephone companies throughout North America.

The 1990s and Beyond

Ledcor's growth continued in the nineties. In 1996, Public Construction News rated the company as Canada's fifth largest general contractor according to volume of work. Also in 1996, Ledcor was awarded the contract for the Ekati diamond mine in the Northwest Territories. This project presented special challenges, given its northern location and the complexities of building in the Arctic tundra.

In September 1996, a highly significant event occurred in Ledcor's history. Long distance carrier Fonorola announced intent to join with Ledcor Industries to build a 48-strand fiber-optic cable between Vancouver, Calgary, Edmonton, Winnipeg, and Toronto. The $120 million cable was to be constructed along a CN Rail right-of-way. Ledcor planned to sell 75 percent of the installed capacity to third party users, such as communities, governments, and large industries in North America. The ambitious plan raised eyebrows and generated considerable speculation as to Ledcor's long range vision. As Peter Aggus wrote in IMC's Telecom Advisor, "This company has displayed amazing confidence in the profitability of a totally independent optical fiber networking spanning the continent. Figures like $1.2 billion of investment in an 18,000 km network are enough to make anyone take this company seriously."

Some speculated that Ledcor had ambitions to operate a telecommunications network. However, according to Ledcor's web site, this was not the strategy. Their plan was to franchise deliver fiber strands to companies like BC Tel and Telus. They described it as a "condominium-style approach" and likened it to laying down the asphalt for others to drive on.

Ledcor's role in the project was as developer and builder. Fonorola was to act as carrier and sell the bandwidth capacity to interested parties. Over the following months, other carriers joined the project, including AT&T and Metronet. Construction progressed smoothly until reaching Longlac in northern Ontario. The rocky environment of the Cambrian Shield of Northern Ontario presented special challenges in the area reaching from Longlac to southern Ontario. However, by then, Ledcor had experience in installing fiber optic cable in all sorts of environments--in everything from rock to seawater. Alex Navarro, a project design engineer described the situation: "You have the hardest rock in the world." Other challenges involved having to provide generators or electrical lines from the nearest source to power repeater stations located every 120 kilometers along the line. Despite the challenges, the cable was laid.

In 1998, the telecommunications division spun off as a subsidiary and was renamed Worldwide Fiber (WFI). It had acquired a percentage of the 8,300-kilometer Canadian Fiber Optic Telecommunications system and had a patented rail-mounted system that had been used in various locations across North America. Worldwide Fiber also obtained a subsidiary, Pacific Fiber Link Inc., which participated in the construction of a fiber optic backbone network between Sacramento, California, and Portland, Oregon.

Also, in 1998, after four years of planning, construction work started on the SEA-Van One, a project to provide a diversity route between Vancouver, BC and Seattle, Washington. Ledcor opted to incorporate Vancouver Island in the link. This involved a substantial investment in submarine cable. Completed after one year of construction, the project involved a fast-tracked state-of-the-art cable installation procedure. It provided advanced communications links to several remote communities, at a relatively economic price. BC Tel, Sprint Canada, and Metronet were among those companies that purchased capacity on Sea-Van.

However, the project was not without setbacks. Peculiarly, although Ledcor reached agreement with 89 municipalities and property owners for the right to cross their land, it could not make a deal with Vancouver, its own city. The dispute centered upon what the city could charge Ledcor Industries for the right to run underground fiber cables through city property. According to William Boei, business writer for the Vancouver Sun, Ledcor reported that the city had threatened to tear up 175 metres of fiber-optic cable that crossed city land. The city denied this, but in turn accused Ledcor of building without permission and of trespassing on city property. After 15 months of negotiations, Ledcor asked the CRTC (the federal regulatory agency) to help work out a long-term solution. The city in turn asked the CRTC to clarify whether municipalities could charge telecom companies a fee for laying cable across municipal property.

Years ago, prior to deregulation, the CRTC had ruled that public utilities could share in rights-of-way. However, with deregulation, municipalities were complaining of an escalation of private companies wanting rights-of-way for profit. The Ledcor situation was a test case with far-reaching implications. If CRTC found in favor of the City of Vancouver, the ruling could lead to new policies that would have made it much more expensive for data carriers to build new networks.

Although no one involved in the dispute would estimate how many dollars could be at stake, Lis Angus, executive vice-president of Angus Telemanagement, said it could be a "horrendous amount of money."

As CRTC warned it would, the resulting investigation took a long time. On January 25, 2001, after several appeals, the CRTC ruled that Ledcor had the right to construct, maintain, and operate transmission lines that Ledcor had constructed in 18 street crossings in Vancouver. It was a major breakthrough.

Meanwhile, Worldwide Fiber Inc.'s fiber became a hot commodity. In 1999, Bell Canada, AT&T Canada/Metronet and Call-Net each bought 12 strands of WFI's 48-strand fiber, while BCT.Telus contracted to build a separate network into Bell Canada's central Canadian heartland.

However, Worldwide Fiber opted to keep the remaining 12 strands of fiber for itself and announced its intent to move from a contractor into a telecommunications carrier. In early 1999, WFI contracted with Level 3 Communications, a U.S. network company, to build 800 route-km of fiber linking Buffalo, Toronto, and Montreal. As part of the deal, WFI retained additional dark fiber strands for its own use. "It's an innovative strategy that helps WFI keep the cost of its own networks down," said George Karidis, associate research director with telecom consultants, The Yankee Group in Canada. Karidis went on to remark that over the last few years, Ledcor had built most of the fiber networks in Canada and many of the U.S. builds as well.

In March 2000, Worldwide Fibre was renamed 360networks inc. According to the company website, "The new name better reflects our shift beyond our historic business of constructing networks to providing a broad range of high-bandwidth services on those networks." 360networks was a public company listed on NASDAQ.

In 2000, 360networks completed a 29,000-km North American telecommunications network. Construction of a transatlantic network was underway, with completion date set for 2001.

Ledcor's other divisions enjoyed similar successes. Ledcor Construction had participated in the construction of projects as diverse as cinemas, hotels, office buildings, casinos, institutional projects, manufacturing facilities and warehouses, and a number of special projects, including the interior of Vancouver Regional Airport and a Revenue Canada Taxation Centre.

Ledcor Mining had worked on a number of major contracts in Canada, the United States, and Mexico. Activities included topsoil stripping, dam construction, contract mining, plant site grading and portal construction, layback of highwall, leach pad construction, and reclamation.

The heavy civil and highway component provided the private and public sectors with earthmoving, drill, blast, and excavation of solid rock, as well as the construction of bridges, highways, dams, container port facilities, and major concrete structures. Projects completed include the Vancouver Island Highway and the Alaska Highway.

The pipeline division had worked throughout varied terrain, including prairie, muskeg, heavily forested areas, and mountains. Ledcor had developed its own semi-automatic welding procedures to complement its work in other semi-automatic and in manual processes. Additionally, the company maintained a state-of-the-art maintenance and transportation facility in Edmonton, Alberta.

Major projects there included river crossings at Peace River, North Saskatchewan River, Athabasca, Red Deer, and the Brazeau River. Larger pipeline projects included Enbridge in Camrose, Alberta; TCPL in Chinchaga, Alberta; TCPL in St. Paul, Alberta; and Syncrude in Fort McMurray, Alberta.

Ledcor's Industrial division consisted of seven sub-components: construction, electrical, rigging, maintenance, module assembly, pipe fabrication, and construction management. The company had worked on a wide array of projects across North America.

Into the new millennium Ledcor's reputation was low profile and private. Company executives rarely consented to interviews and not a lot of reference material was available about Ledcor Industries. Still, the company was known for its commitment to excellence and for bringing in projects on time and on budget.

Ledcor was also known for its excellent safety record. Over the years, they had been recognized many times with safety awards and publicly stated that they are committed to the safety of their work force. According to WorkSafe BC, co-owners Cliff and David Lede witnessed the death of their father in a workplace accident in 1980. "Although Ledcor's management and workers were already committed to workplace safety, the tragedy had a lasting effect on the way they do business," wrote WorkSafe BC.

WorkSafe BC further acknowledged Ledcor's commitment to safety when their model Blood and Body Fluids Precautions Policy was implemented in 1998. "Workers increasingly reported finding discarded needs on or near construction sites," wrote WorkSafe BC. "Ledcor worked with a WCB (Workers Compensation Board) prevention officer to incorporate the precaution policy into its project-specific safety program--the company now trains every one of the approximately 1,000 workers on its Canadian and U.S. projects in these precautions before they begin working with the construction firm."

Although Ledcor Industries did not make its financial status readily available, one could surmise that the company was doing well based on its growth, the number and size of its projects, and its reputation. In particular, the communication division seemed on the brink of great success given the decision brought down by CRTC and given the current global interest in broadband technologies.

Principal Subsidiaries: 360networks inc (69%).

Principal Divisions: Telecommunications; Building; Civil; Industrial.

Principal Competitors: Centex Construction Group; Morrison Knudsen Corporation.


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