Local general contractors see opportunity, challenges in Ford's Blue Oval City project

By Stephen MacLeod – Reporter, Memphis Business Journal

Local construction firms are excited about the $5.6 billion investment by Ford Motor Co. at the Memphis Regional Megasite, but are wary of the new challenges it will bring to the area construction market.

Specifically, material supply is already tight given a shortage brought about by the COVID-19 pandemic and a challenging labor market will be made even more competitive with 5,800 new jobs entering.

“It’s a wonderful addition to the Memphis metropolitan area,” said Fred Grinder, managing principal of Grinder, Taber & Grinder Inc. “Obviously with a project of that magnitude, it’s going to stretch the resources here. I have no doubt that there will be resources coming from out of the Memphis area.”

Grinder said that Ford will have to deal with the challenges that everyone in the Memphis construction industry is dealing with, especially on the supply side.

“Normally, the [materials] market picks up and the production folks produce and it's stabilized,” Grinder said. “This has been longer than normal because of COVID. The pandemic is what has caused this.”

For Ford to be successful, thorough and thoughtful planning will be key according to Beau Yarbro, VP and general manager of F&F Construction. Yarbro said that Ford will also have to be aggressive in a competitive labor market.

“I think a lot of that's going to come down to the companies that are most competitive from a cultural standpoint,” Yarbro said. "Is it a good place to work? Do folks want to stay there or are they willing to jump ship to see if they can get a few more dollars and a better working environment?”

Yarbro said that he thinks smaller firms could be at an advantage since they can adjust their benefits and work schedule to what is best for workers. He said that Ford will have to compete with everyone in the tight labor market.

"Material and labor challenges will be relatively equal, but not necessarily predictable,” Yarbro said. “You're going to have those. It's incumbent upon the design team and the construction manager to get ahead of [the challenges] as soon as possible.”

Another wrinkle is that many of the local contractors in Memphis are currently busy in the midst of a hot market.

“If we had the opportunity to work on the Ford plant, we will look into that opportunity,” Grinder said. “But most of the contractors in town are pretty busy right now. So we're not burning the phone up for them, but we will certainly welcome the opportunity for some of it.”

Jamie Linkous, director of business development at Linkous Construction Co., said that projects of this scale are exciting, but the sheer size can bring challenges.

“It's one of those things where you sit there and think about the scale that they're looking at building on,” Linkous said. “It may preclude some contractors from taking advantage of work up there. I think some of us can be dependent on how packages are broken out for whether or not local firms will be able to do a project of that size and scope.”

Overall, construction firms are very excited by the megasite project. Even with the new challenges, the general tone is one of excitement.

“It's a boon,” Grinder said. “It'll put a stress on the local labor market and in the supply market, but it is a very good thing for the city of Memphis, the state of Tennessee and the surrounding area.”