SME Steel

SME

Written by Amy Milshtein Produced by Stephen Marino

One look at the (W)rapper Tower, a boundarybreaking, 200-foot-tall office tower in the Culver City neighborhood of Los Angeles CA, illustrates the confident expertise that sets SME Steel apart from its competitors.

The striking 180,000-square-foot structure is literally wrapped in an exoskeleton of steel ribbons. More than just decoration, the bands provide so much structural stability that columns are not required. This construction method allows 17 stories of open space, with nothing to break up the floorplan or interfere with views.

“Two or three other fabricators turned the job down before we undertook it,” recalls company president and CEO Dieter Klohn of the $70.3 million project “It really is a one-of-a-kind building, and we are extremely proud of the work.”

As one of the largest fabricators and erectors of structural steel in the United States, with over 400,000 square feet of fabrication facilities in Utah and Idaho, SME Steel has plenty of other reasons to be proud. Using the most upto-date sophisticated equipment available, 30-year-old firm can produce approximately 20,000 shop hours per week.

“

“I have found that unlike many other with all its associated risks still has It’s challenging. It’s challenging to so they are profitable and benefit

- Dieter Klohn,

other industries, the steel industry has an element of adventure to it. to take on jobs, administer them benefit the company as a whole.”

Klohn, CEO

Two strategically located miscellaneous steel facilities in Phoenix, AZ and Las Vegas, NV support the main structural fabrication shops. This unique combination of products and services gives SME Steel the capacity to fabricate and ship over 2,000 tons of structural steel a week.

With about 1,600 employees, including 350 iron workers, the company works as an integral team member on any project. SME Steel facilitates budget management, offers design assistance, and provides value engineering as part of their service package.

SME Steel doesn’t talk directly about their sales volume, (“That stays within the company record,” insists Klohn) but they do admit to losing about $600 million due to COVID-related job cancellations in 2020-2021.The first and second quarter of 2022, however, tells a different story.

“We saw some pickup both in the volume of projects out to bid and actual contracts now being led,” Klohn reveals. “For 2023 we project a 15% pickup in revenue and 10% in 2024.” (After some more prodding Klohn eventually discloses that total sales volume is presently a little under $600 million.)

Diversification Aids Growth and Competitiveness

SME Steel is a part of the SME Industries family of companies. This diversification allows the organization to provide a range of services to their customers. Broadening their base and adding design assist services and even some structural engineering lets the company grow and stay competitive in a rapidly changing marketplace.

SME Industries includes Southwest Steel, a firm that specializes in structural steel, miscellaneous metal, steel stairs, railings, high

quality customer ornamental metals like stainless steel, aluminum, bronze, and brass, and creatively unique steel pieces.

It also holds CoreBrace™, LLC a company that offers Buckling Restrained Brace (BRB) manufacturing. BRBs are structural elements that improve the performance of a building during a seismic event. CoreBrace™ offers a diverse range of BRB configurations to accommodate any geometric, aesthetic, construction, and design reequipment. “CoreBrace™ operates in every seismic area of the world,” reveals Klohn. “It has

about 83% of the total market share.”

DuraFuse Frames is another corporate family member. DuraFuse Frames offer innovative solution for seismic or wind event safety. The moment frame systems protect beams and columns with a shear-yielding, replaceable fuse plate connection system that is simple to incorporate, fast to install, and commercially competitive.

Heavy load trucking company SME Logistics, based in West Jordan, UT, rounds out SME Industry’s offerings.

While this diversity gives SME

Industries worldwide reach, SME Steel mostly operates on a regional basis. It is, however, a really, really, big region, including New Mexico, Utah, Nevada, California, and Washington State.

Innovative Projects? No Problem!

As impressive as it is, the (W) rapper Tower is just one of SME Steel’s unique project. Other noteworthy buildings include SoFi Stadium, a new sports center in Inglewood, CA. Home to the Los Angeles Rams and the Los Angeles Chargers, SoFi Stadium is the NFL’s first indoor-outdoor venue. SME Steel supplied all of the

Congratulations to SME on achieving 30 years in business!

Our team is proud to partner with yours as we build the future together.

structural steel for the bowl and all the miscellaneous metal and nonferrous metal as well. “That was a $400 million contract for us,” reveals Klohn. “And we completed it on time and on budget.”

They have worked on other sports venues as well including the Chace Center in San Francisco, the T-Mobile Arena in Los Vegas, and the Honda Center in Anaheim.

SME also tackles enormous transportation projects like the Los Angeles International Airport’s terminals for American Airlines and the Delta Skyway. They have also worked on the Boise Airport, McCarran International in Los

Vegas, and the Salt Lake City International Airport.

Are airships more your speed?

SME is involved in the renovation of Moffett Field Hanger, located in Mountain View, CA. Part of Google’s Charleston East campus, the hangar is one of the largest, free-standing buildings in the world, once housing the U.S.S. Macon, a rigid airship that unfortunately crashed. The project includes a massive, mixeduse development that includes high-density housing, retail, and restaurants.

The company also works on higher education projects, government

Pictured Project: The Wrapper in Los Angeles, for which SME fabricated 2,502 tons of Nucor structural steel.

Learn more at nucor.com

buildings, commercial and event spaces, and technical/research buildings.

On Time and One Budget? Well, Sometimes

While Klohn is proud of delivering work on time and on budget, recent realities have moved that benchmark out of reach.

“Well, the reality is we are not always on budget, especially under the current market conditions,” he says. “There has been upward price pressure imposed on the steel market including increases by over 100% in the fabricated structural steel market. Steel prices have gone up by a factor of 350 to 400%. So no, it isn’t always on budget.”

Klohn acknowledges that there have always been great risks associated with steel fabricators, but this time it feels different. “There is a limited pool of projects to bid on,” he says. “So, delivery time is largely dictated by our subcontractors and it’s pretty hard to control that. But we’re trying and doing a fairly good job at it.”

To ensure that SME Steel only works with the best, suppliers and subcontractors must go through a demanding qualifications process

to prove they are compliant with current codes and meet specifications. This is true for large suppliers like steel mills all the way down to mid-range suppliers for welding rods, bolts, tools, and trucks. “ They all have one thing in common,” Klohn insists. “They need to go through a rigorous prequalification process to be eligible to work with us.”

Crafting a Pipeline of Expertise

SME turns that rigor inward when it comes to training their staff. Like nearly every economic sector, SME is challenged by the labor shortage and finds it difficult to

hire and retain qualified personnel. That makes holding on to the staff they have that much more vital to company success.

To that end, management encourages team members in all positions within the company to take continuous education classes. “We make a point to develop our executive and technical teams from within the company wherever we can,” says Klohn.

He instituted a leadership program called Culture by Design three years ago that yielded great results so far. “In other words, we will take people right out of the steel shop and put them into a career path that eventually leads to highly

technical skill positions.”

To reinforce those lessons, the company employs a success coach, goes on a yearly, two-day retreat, and stresses company values like honesty, transparency, and the importance of working as a team.

It is work Klohn takes very seriously. “Mentorship and the responsibility for training the next level of executives is just part of my daily routine,” he says.

Renewed Commitment to Safety

Steel fabrication and iron working can be dangerous, and Klohn admits that SME did not have the greatest safety record back in 2017. Right now, however, that record is outstanding. “We’re 25% over what the average steel fabricator provides in safety,” he says.

Klohn credits, “education, education, and more education” for the improvement. The company’s safety committee finds ways to consistently talk about and demonstrate proper procedures before starting a job. They even set aside one day a year to celebrate safety achievements as a whole company. As a result, SME Steel earned a Platinum Safety Award from ConstructSecure in 2021. “We are now considered one of the

safest companies to work for,” says Klohn.

Building with Respect: The Importance of DEI

Diversity, Equity, and Inclusion (DEI) is not a buzzword in West Jordan, Utah. After all the entire state is very homogeneous with over 90% identifying as White. West Jordan is a little more diverse, but not much with just 71% identifying as white.

Still, SME Steel believes strongly in advocating for DEI. They

consider DEI a vital part of company DNA that propels them forward, fuels their innovation, and connects them to their clients and communities. “We advocate and educate our top management team. And we hire on the basis of these principals,” says Klohn.

Resident of Utah, Citizen of the World

Klohn has been president and CEO of SME Steel since 2010. Before that he has lived, studied, and worked all around the world. “I’ve been to every continent, and every

US state,” he says. “I’m probably a citizen of the world.”

Born and educated in Germany, Klohn moved to Canada to work and study under Canadian industrialist Casey Irving. He also lived and worked outside of Boston, MA for 30 years and took classes at Sloan and MIT.

A member of the American Welding Society and the American Institute of Steel Construction for over thirty years, Klohn is also a long-time member of the American Society of Civil Engineers and a voting member of the American Society for Testing and Materials National Committee. After working for many companies, including

“Well, the reality is we are not always on budget, especially under the current market conditions,” he says. “There has been upward price pressure imposed on the steel market including increases by over 100% in the fabricated structural steel market. Steel prices have gone up by a factor of 350 to 400%. So no, it isn’t always on budget.”

- Dieter Klohn, CEO

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his own business for many years, Klohn retired.

SME brought him back to the daily grind. His duties include capital planning, managing partnerships, delegating responsibilities, and fostering relationships with the community, customers, and clients. He also mentors executives and takes responsibility for training the next cohort.

But after over 50 years in the steel industry, it’s the promise of challenge that charges him up. “I love the industry,” he says, “its risks and rewards. And the people are great. Over the years I’ve been fortunate enough to have

met many people and form great relationships. And I have found that unlike many other industries, the steel industry with all its associated risks still has an element of adventure to it. It’s challenging. It’s challenging to take on jobs, administer them so they are profitable and benefit the company as a whole.”