Steeling a market Featured

7:00pm EDT March 27, 2003
Ed Ponko is a guy who would look natural on a construction crew. Built like a former linebacker, Ponko wouldn't appear out of place with a tool belt strapped at his waist.

But although Ponko, president of Dietrich Metal Framing, might show up from time to time on a jobsite, it's not to hammer together structural framing. These days, he's leading the effort at Dietrich Metal Framing, a 2,000-employee steel processing company that is part of $2 billion Worthington Industries of Columbus, Ohio, to accomplish a little less than a sea change in the residential construction industry.

Why? The steel products industry, facing competition from other materials, including plastics and aluminum, needs to identify new opportunities if it's going to grow.

"We decided that we had to create new products and find new markets," says Ponko, a Brown University grad who started his career with the company two decades ago as a sales representative.

Dietrich Metal Framing's decision to boost steel distribution by creating products for the burgeoning residential construction market may seem like an obvious one, but replacing wood with steel isn't simply a matter of swapping one material for another. The change requires modifications in the very basic ways that homebuilders work.

Dietrich is attempting to coax homebuilders to make a fundamental shift in the way they build homes by persuading residential contractors to use steel instead of wood to build the framing of homes. To accomplish that, it must overcome tradition, long-accepted building techniques and the powerful wood products industry, which in recent years has produced product innovations that are stronger and more durable than traditional lumber. That industry is not about to give in easily to a challenger.

While steel is used for framing in only 2 percent to 5 percent of new homes, the use of steel framing has increased 300 percent in the past four years, according to the Steel Framing Alliance, a trade group comprised of producers, builders, tool manufacturers and others interested in promoting steel in construction. Shipments of steel framing for residential construction grew by 51 percent from 1999 to 2000, according to the trade group.

Using steel framing in construction is by no means a new idea. Contractors have been using steel for years for framing commercial buildings, and steel framing members have been used for some applications in residential construction since at least the 1930s.

Widespread use of steel framing in residential construction has been limited, but some builders are beginning to embrace its use with enthusiasm. Steel has obvious advantages in locations where termite infestation and mold can pose problems. For those reasons, it has become a popular option in Hawaii and Louisiana.

"The quality is important because we can build with greater precision," says Jeff Prostor, president of Brookfield Homes, a Pleasanton, Calif.-based builder of semi-custom and tract homes that has used steel framing for the past eight years. "We don't worry about fires, we don't worry about termites, we don't worry about mold."

The traditional method of framing residential structures has been stick framing, in which wood members are used to form the skeleton of a house. That method has prevailed because wood is plentiful, renewable, durable and relatively inexpensive.

Carpenters have been trained for decades in the use of tools for cutting and joining wood frames. And other building trades professionals -- plumbers, electricians, heating and air conditioning contractors and dry wall installers -- are accustomed to working with wood frame structures.

It is relatively easy to drill a hole for plumbing or electrical wiring or to cut an opening for ductwork in wood. Working with steel, on the other hand, requires different tools, skills and techniques.

Openings in studs and joists must be carefully planned and completed in the steel fabrication step to accommodate pipes, wiring and ductwork because creating them on the jobsite isn't practical.

The cost of steel has remained relatively level over the long term, according to the Steel Framing Alliance, a trade group formed in the late 1990s to promote the use of steel as a substitute for wood framing. Where the cost difference becomes more apparent is with the labor component, a factor that Dietrich Metal Framing is working on to improve performance.

Advocates for the use of steel and wood in homes argue their respective cases on the basis of the suitability of their respective products for the application, environmental responsibility and durability. In the end, however, the marketplace will be the arbiter of success.

"We'll have to do it for the same cost," says Chris Singleton, manager of market development for Dietrich Metal Framing. 

Recreating a market

Singleton says steel processors sat on the sidelines for years waiting for the steel industry to champion and spearhead the use of steel products in residential construction. That never happened, so processors like Dietrich Metal Framing, as well as other tool and fastener manufacturers and industry groups, decided to join the effort to promote steel as an alternative.

Dietrich realized that getting the building industry to use steel was more than a sales and marketing challenge. Simply stocking lumberyards with steel studs and fasteners was not going to develop the market. Instead, the company would have to revamp the process, from design to materials distribution to the jobsite.

"Even if you had a lumberyard to supply the materials, who was going to build it?" says Singleton.

The company concluded that persuading contractors to use steel would require an extensive research and education process. It decided to guide builders throughout the process -- from design to code compliance to training building crews accustomed to working with wood -- to become comfortable with framing with steel.

Dietrich Metal Framing formed a joint venture in 2001 with software company MiTek Industries Inc. to produce a design program to help contractors design homes and systems using steel. The venture, Aegis Metal Framing, says Ponko, expands the use of computer-designed metal roofs, wall and floor systems, and will provide assistance to builders, from setting specifications through shell framing.

To get the process moving and help contractors get over the logistical barriers encountered when going from lumber to steel framing, Dietrich established a distribution and technical service center near Columbus. The idea is to have its hands on every step of the building process so that it can overcome the resistance that often greets new ideas.

"We've tried to take all of the excuses out of it," says Singleton.

One of the key steps in standardizing and streamlining the process is a pilot project that Dietrich is conducting with Centex Homes of Columbus, a division of Centex Corp., a national company that builds about 20,000 homes a year. Centex is using Dietrich Metal Framing's TradeReady Floor System in two of its lines.

Dietrich delivers a package of materials, including steel studs, fasteners and tools to a jobsite. A group of field specialists from Dietrich demonstrates the use of tools -- screw guns replace nail guns, chop saws and plasma cutters replace miter saws -- and shows workers how to work with the materials.

The field specialists work with the framing crew to erect the floor system, noting problems and developing better techniques to improve the process.

Singleton says the project will help Dietrich develop building "cookbooks" that will standardize the process for contractors and cut down on building time. The project has already yielded valuable results by reducing substantially the time it takes to install a floor system.

"We've already cut our time down more than half," says Singleton, which means that it is now about equal to what it takes to build a comparably sized wood floor system.

And the process of research and development is ongoing. Dietrich engages with every level of the industry on a regular basis.

"We talk almost daily with tool manufacturers, code enforcement officials and representatives of vocational schools," says Singleton.

Singleton says that while Dietrich Metal Framing will continue its research and development efforts, the distribution leg will likely be turned over to lumberyards or other building materials dealers.

"What we really want to do is create the model, then give it to another distributor," Singleton says.

While Dietrich may not intend to own every part of the process, it has put its hands on its every step. Contractors have access to a technical service phone line at Dietrich that takes 25,000 calls a year.

The company offers the tools necessary for steel framing to contractors on a rent-to-own basis and conducts seminars with building code enforcement officials to explain the structural qualities of steel and how it meets code requirements.

While steel remains far from supplanting wood as the material of choice, Dietrich Metal Framing is doing everything it can to secure a place for its products in the construction industry. And it's doing it by following a fairly simple formula.

Says Ponko: "We've made it easier for them to work with steel."

HOW TO REACH: Dietrich Metal Framing, www.dietrichindustries.com; Brookfield Homes, www.brookfieldhomes-southland.com; Steel Framing Alliance, www.steelframingalliance.com; Worthington Industries Inc., www.worthingtonindustries.com