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Demanding Contractor Nails Down Big Projects and Profit

February 23, 1988|JAMES F. PELTZ | Times Staff Writer

The reconstruction and widening of a two-mile stretch of the Ventura Freeway as it winds through Woodland Hills has begun. Although much of the work will be done at night, the 16-month project is sure to test the patience of motorists who use the busy highway. Except for Ronald N. Tutor.

Tutor is president of Tutor-Saliba Corp., the construction firm in charge of the $18.3-million project, the first of four phases in a $90-million plan to improve 24 miles of U.S. 101 between Thousand Oaks and Universal City. Tutor also happens to live in Hidden Hills, an affluent town that borders Woodland Hills to the east.

"I kid our guys. I say they've got the worst inspector going because every night when I'm coming home at 11, 12 o'clock I'm going to stop and see what they're doing," Tutor said with a grin.

Tutor is an aggressive, demanding and outspoken boss who views construction as a trade where nice guys finish last. Coming in first means having to constantly battle the developers, architects, subcontractors, government agencies, property owners, equipment suppliers and other parties involved in a construction job--each of which has demands that could cost money and eat into Tutor-Saliba's profit.

No Room for Timid

"There's no such thing as a timid, successful general contractor," Tutor said. "There's probably more confrontations and conflicts in construction every day than in any other business I can imagine. You've got to have the ability to attack people who confront you."

Tutor has won his share of battles. His company, based in Sylmar, is one of the largest general contractors in California and it ranked 70th nationwide last year with $305.3 million in contract awards, according to Engineering News-Record, a trade publication. The company has also had projects in Arizona, Utah, Colorado and even New York City, where it is working with Perini Corp., another major contractor, to renovate a subway line for $180 million, Tutor said.

Tutor-Saliba (pronounced sal-EE-ba) built the Tom Bradley International Terminal at Los Angeles International Airport in a $125-million project, and four years ago renovated San Francisco's cable car system for $30 million. Tutor-Saliba is doing $124 million worth of work on the Metro Rail subway project in Los Angeles.

Tutor-Saliba also has built high-rise apartment buildings, office towers, warehouses and multilevel parking garages. The privately held firm employs between 800 and 1,400 people, depending on how many jobs it is handling.

Fourth Lane Addition

The Ventura Freeway project calls for Tutor-Saliba to add a fourth lane in both directions from Topanga Canyon Boulevard west to Valley Circle Boulevard. The firm also will replace 3,200 feet of pavement at the Valley Circle interchange and will add a fifth westbound lane from Topanga Canyon to White Oak Avenue in Encino.

Tutor said he owns more than 50% of Tutor-Saliba, and that it has two other minority owners--his father, Albert Tutor, 77, and Naseeb Saliba, 73. The elder Tutor and Saliba, who specialized in building freeways, each owned their own construction firms until they merged in 1972.

Because the firm is privately held, Tutor, 47, will say little about its financial status. When a visitor recently asked about the amount of Tutor-Saliba's capital, Tutor shot back, "That's none of your business."

He did reveal, however, that the firm's annual revenue is between $200 million and $300 million. He also said Tutor-Saliba's net profit margin was "a little better" than the industry average, which is a razor-thin 1.5% or less of total revenue. Thus, on annual revenue of say, $250 million, Tutor-Saliba might earn $2.5 million to $3.75 million.

Why are the margins so narrow? "Because we're too competitive as an industry," which leads to cut-rate prices, Tutor said. "We all bitch about our profit margins but everybody's reluctant to be the one raising prices because we're all used to doing a certain amount of work."

Ronald Tutor got into the business after earning a bachelor's degree in finance from USC in 1963. After graduating he still wasn't sure what he wanted to do, so he accepted his father's offer to join the family firm. "After a year I thought I liked it, and I just stayed on," he said.

"I think it suited my personality," Tutor said of construction, which he said has made him a millionaire. "It really is a business that's risk-oriented, which I enjoy, and I always had a relatively aggressive personality. It's not a business that's subtle by nature."

Neither is Tutor. Four-letter words punctuate his sentences. "Since conflicts are such a major part of this business," Tutor said, "if you're not a very strong person and you're not willing to fight when it's necessary, you just get trampled."

Tutor is "very tough and tenacious," said Michael V. Reyes, president of Urban Pacific Group, a developer that has joined with Tutor-Saliba to build an apartment complex, Del Prado, in Los Angeles. "Thank God we're on the same side of the table."

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