California Boiler

He left and started this business, which was then called Southern California Boiler that he operated out of his house for about four years. He was doing about $80,000 a year when I came on in 1983, but I wouldn’t join him until we incorporated and had our own office. We started out with four people, moved into another building, took over that building, and grew with some people who had worked for us at the other company. Then we bought four other boiler companies throughout the state, and had an office in Visalia, California called Central Boiler Industrial Service. Four years later, we bought Ward-Shmidt in Modesto and added that to Central Boiler Industrial Service. Then seven years ago, we changed the name and rebranded ourselves, totally, as California Boiler because Southern California Boiler Company doesn’t work in northern California.” Today, California Boiler has 105 employees, four main offices, plus a satellite office in Dixon, and 74 trucks. Last year, they moved the headquarters from a 10,000-sq.-ft. building to an 18,000- sq.- ft. building in Santa Ana. The Visalia office has a 10,000-sq.-ft. building with five acres paved, and a lot of their rental trailers and equipment sits there. The other branch office in Modesto is about 10,000 sq. ft., as well. In 1983, Clarkson bought 50 percent of the company from Walker for $40,000. It was a good investment. On Jan. 1, 2007, California Boiler became an ESOP (Employee Stock Ownership Plan) company. It actually takes 15 years for the total transaction – at the end of this year, that transaction will be complete and the company will be 100-percent employee owned. Clarkson explains, “In 2006, we were both 55 years old, and looking for a way to retire, some day, and get money out of the company. We looked at a couple options like selling to a bigger entity, and selling to a competitor, but we thought this was the best way to do it. Our employees don’t pay anything, and they get stock every year. Over the last five years, the stock has increased between 12 and 18 percent every year. So, not bad for them, either. Our two original employees, who each had 10 percent of the business, have been paid off by ESOP and now have management positions in other companies, but we still work closely together. Jay retired and has also been fully paid.” ESOP companies are federally tax exempt because it’s a Certified Retirement Plan. They pay state taxes on annual profits but not federal tax. The other benefit is that most ESOP companies tend to have better efficiency and output because the people look at it as their own company, not “I work for that company.” That generally holds true for about 80 percent of employees and results in lower turnover rates - some people have been at California Boiler more than 25 years. The boiler industry has an issue with lack of skilled labor – technicians and boilermakers – throughout the whole country. The biggest turnover at California Boiler is people saying they can do the job, when they can’t. They don’t last more than a year. So, the company trains its own people. “Training is a big part of our culture,” says Clarkson. “We recently set up a program that is now nationally certified by the Dept. of Labor as an accredited training session for boilermakers CAL I FORNI A BOI LER