Comments on the bankruptcy of a disruptive force in construction.

A construction disruption interruption

Ken Clark Editor in Chief

Katerra was one of the buzzwords during the 2019 ProDealer Industry Summit. The high-tech, off-site construction company aimed to modernize the construction industry on a massive scale. It had Silicon Valley talent and big name investors in its corner, and some of the slickest web sites and marketing videos this side of Hollywood.

A compilation of those videos was played during the Summit for an audience of dealers, retailers and distributors who watched (perhaps uneasily) as the big screen graphically erased dealers,

retailers and distributors from Katerra’s vision of the construction supply chain. (Hats off to 2019 panelist Dave Snyder of Builders FirstSource, who deserves an award for his response: “You can take us out of the supply chain tomorrow. But you can’t take out what we do.”)

Fast forward to page 14 of this issue, which reports on the bankruptcy filing of Katerra.

“A ha! That ought to put those Silicon Valley hot shots in their place,” we might observe.

“You outsiders who think you know all about the homebuilding business might want to think twice next time you butt in,” we might suggest, with an air of superiority.

We might suggest all of that. But we might be wrong. Katerra certainly wasn’t wrong about the opportunity for modern construction and off-site methods to take root in the U.S. homebuilding sector.

Those opportunities and methods were examined during the recent 2021 ProDealer Industry Summit, as forwardthinking suppliers weighed in on “The Benefits of Offsite Solutions.” The panel discussion covered the growth of Ready-Frame high-tech, pre-cut framing packages from Builders FirstSource. It also revealed statistics (from McKinsey Global) showing the decline of U.S. construction productivity since 1995.

“The country that put a man on the moon has declining residential construction productivity,” said Gerard McCaughey, CEO of Modesto, Calif.-based Entekra. “It can’t be clearer that there is a big problem.”

McCaughey has been on a careerlong crusade to “bring modern methods of construction to the U.S. construction industry.” Think of it this way. Would you want your car manufactured in a factory, or would you want the parts shipped to your front lawn and have “five guys come in a pick-up truck with welding gear to put it together?” he asked.

And to those who say they’ve tried panels and cranes in the past, with unsatisfying results, Dean Rana, president of Phoenix-based Truss Fab Companies, offers this observation: “Software is better. Talent is better. And equipment is better. We’ve come a long way.”

Rana added: “Everybody is trying to do their part to build smarter. It’s going to happen.”

Katerra ran out of steam. But the hightech off-site trend has not. Tell us what you think at news@hbsdealer.com. HBSD

Entekra promotes a Fully Integrated Off-Site Solution (FIOSS).

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