Current Challenges and Opportunities Facing the Modular Construction Industry w/ MBI Board Chair Mike Wilmot [podcast transcript]
Current Challenges and Opportunities Facing the Modular Construction Industry w/ MBI Board Chair Mike Wilmot
Mike Wilmot, co-founder/president of Wilmot Modular and chair of MBI's Board of Directors, discusses the host of the challenges facing the modular construction industry and how MBI is working to meet those challenges. Mike also explores all the opportunities that lie ahead, including the immediate needs for affordable housing, disaster relief, and more.
Lastly, Mike shares his goals for MBI as the association enters its 40th year in 2023.
John McMullen
Hello and welcome to Inside Modular, the Podcast of Commercial Modular Construction, brought to you by the Modular Building Institute.
Welcome, everyone. My name is John McMullen and I’m the marketing director here at MBI. Today I'm talking with Mike Wilmot, president and co-founder of Wilmot Modular and the current chair of the Modular Building Institute’s board of directors. Mike is here to discuss the challenges and opportunities facing the modular construction industry today.
Mike, thanks for being here.
Mike Wilmot
John, I look forward to our really good conversation on where the modular industry is going.
John McMullen
Well, I've been looking forward to this for a while. So let's dive in. Tell me about yourself and the formation of Wilmot Modular. What was your goal when you started out?
Mike Wilmot
John, I'm the co-founder of Wilmot Modular. We’ve been around for 32 years, our goal was to develop a really strong customer service company in the mid-Atlantic area, very proud of the fact that we grew from a small startup company to a really a strong company that has 3500 accounts and 32 national awards from the MBI. So, we're very proud of where we've gone and where we're going to go.
John McMullen
And you and your wife, Kathy, had been in the modular relocatable buildings industry for, like you said, 32 years, have you seen things change over that time, I'm sure it must be significant.
Mike Wilmot
Oh, major changes. When we started, what we used to call the “wobbly box” industry has turned into a very high-powered…all kinds of modular construction, being concrete and steel, everything from whole campuses, to retail centers, everything going modular. The evolution has been pretty dramatic, with new and really better ways of building accelerated construction.
John McMullen
So, you sound like a busy guy, I know this the family business for you, you've got your fingers in everything. Why did you start serving on MBI’s Board of Directors?
Mike Wilmot
I was really passionate about the industry. And I could never give enough back to the industry, what it's given to myself and my family. It really has been a great ride and a great journey through the modular business. I really enjoy working with the MBI. I enjoy helping steer some of the protection that we need to do. And we really look forward to the building industry. But I'm really excited about being involved.
John McMullen
And you are, as I mentioned, you're the board chair now. What excites you, in particular, about being in that position?
Mike Wilmot
I love working with a group of very talented board of directors of art are, are really the exciting thing I see is growing market share for the industry, and really protecting the industry, from different things that come to us as we get bigger and bigger.
John McMullen
So, you've got 32 years of experience under your belt, you chair the board of directors of our international trade association—largest in the world…you have a unique vantage point on the industry. I was wondering, from your point of view, what are the some of the biggest challenges facing the modular construction industry today?
Mike Wilmot
I would think our biggest challenge is the acceptance of modular from stick-built. I also believe that the biggest challenge is that we need to continue to get the great work that the modular industry is doing out through public relations. I believe also that one of the big challenges is as we get bigger and bigger, we become target of the federal government. I do believe that Davis-Bacon is a big challenge for our industry. They want to move the Davis-Bacon Act into the factories, which we think is not the right way to move.
John McMullen
So let's dive into the Davis-Bacon act. A little more. We've done a lot of press on that: we've had a magazine, and a podcast, dedicated to the Davis-Bacon Act. I know you've been working very hard to spread the word about its potential impact. What can you tell me about the act itself and what you've been hearing from MBI members that you've spoken with?
Mike Wilmot
Well, the Department of Labor has taken upon itself to apply Davis-Bacon rates to our offsite factories. Our owners of the factories and our stakeholders believe this is a big mistake. It would create total chaos within the industry to try to separate the standard rates; Davis-Bacon would create a lot of difficulty. It could potentially cause a $2 billion drop in revenue. If we can't solve it, I believe some factories will just say, “No, we're not going to bid it” because of the chaos that it would create. We hopefully can either slow it down or amend it or get rid of it.
John McMullen
Have you heard anything specific from…I know you are working with several members part of a task force to raise awareness raise some revenue to combat the DBA…Have you heard anything specific from members about how, this will affect their workers in the factories.
Mike Wilmot
Very much so. I think they're concerned that the division of the labor costs would create a lot of problems, not only in reporting it, but implementing it. And I would think that what we want to do as an industry is to stay with what we've done in the past very successfully. And I think as long as we understand that this is not a move in the right direction, I think the factories will be able to go back to the way we've done it and continue to do it right.
Related Listening:
What the Expansion of the Davis-Bacon Act Would Mean for the Modular Construction Industry
MBI executive director Tom Hardiman discusses the potential expansion of the Davis-Bacon Act—which would impose prevailing wages on offsite and modular manufacturers working on federal construction projects—and its many implications for the modular industry at-large.
John McMullen
So, we've talked about a couple of challenges facing the industry, not insignificant challenges at that. But let's switch gears for a second: What opportunities do you see for modular construction, both now in the next three to five years?
Mike Wilmot
I think a gigantic opportunity for us as an industry is that we're only 5-10% of the total construction that's out there; I think we can double that in the next five years. I believe there is a great opportunity for the modular industry to be the leader in [net] zero energy. I believe we've developed some studies that can show that modular construction can lead the way with [net] zero energy buildings.
There's also a huge need for migrant worker housing. I think as long as we can keep our costs in line, we can be the leader in affordable housing. I also believe that with the disaster planning, we can be the solution to major disasters, whether it be hurricanes or tornadoes, or anything in solving space problems for the world.
John McMullen
Well, we've got two of those crises going on right now. Simultaneously, we've got, you know, migrants being flown into other states. New York, I know, has an immediate need for that. And we've got (Hurricane) Ian coming up the coast of Florida. So, a big need, I would think for relocatable buildings is disaster relief, administrative infrastructure, you name it. I know the module industry has a long history of responding to disasters like this. I can't imagine that'll change anytime soon. What's your take?
Mike Wilmot
I think there is a huge opportunity to help the communities out whether it be through modular medical facilities or admin support. When Sandy hit years ago, our industry stepped up and did a wonderful job of supporting the workers, whether it was for the carpenters or the medical facility people, but we personally got involved in that. And it was a very good down deep feeling to see people getting helped by the modular industry. And I think it's going to be a constant—whether it be in Florida, or in New Orleans—that we've got people that can react in our industry, we can rapidly deploy space to help people in these disasters,
John McMullen
Which only become more difficult if the DBA comes into effect, I would imagine.
Mike Wilmot
Oh, exactly.
John McMullen
So talk to me about the modular building Institute MBI. You're fortunate enough to be the board chair during a couple of notable milestones this year and next MBI just brought on his 500th member, which we're very happy about. And then next year, is the 40th anniversary of the association itself. What's the importance of MBI? And why should more companies consider joining?
Mike Wilmot
There's a just a tremendous need for us to be continuing to learn and grow as an industry. I think we as an association, we create that vehicle for people to learn and to become stronger in the industry. I think our role from the MBI should be to educate and protect. And I think we do an exceptional job of that.
John McMullen
Do you have any goals still as board chair?
Mike Wilmot
I do. There are several I would like to create a very large war chest to protect the industry, whether it be Davis-Bacon or any other legislative issue that would attack our industry. I'd like to create a million-dollar war chest for us and we're well on our way to doing that.
I'd also like the MBI to do grassroots development with young architects and young people getting into the setup business. And I believe that we can train people up specifically for modular construction. But we definitely need to really attack the millennials and get them involved so that we got a future.
John McMullen
Well, I think that's a great point. I know. worker shortage is coming up fast. It's here now in many respects. Training and Education for younger workers is really critical, not just for us, but for the trades at large. But yeah, I can't wait to work with you about you know, education and new programs MBI can get to help spread the word and build some enthusiasm about all the opportunities that modular has to offer.
Mike Wilmot
No question.
John McMullen
Tell me about your experiences at World of Modular, MBI’s big annual trade show. How would you convince someone to attend who never has?
Mike Wilmot
I would tell our listeners that the World of Modular is the conference for modular construction. You're going to be rubbing elbows with the experts throughout our industry, you're going to hear experts really help you build your business and protect your business. We have world renowned speakers coming in, whether it be economist or architects, really is a great forum to learn more about the industry and to make some new contacts. It's a really great way to network with the major decision makers that are out there.
John McMullen
And as you mentioned, at the top, you can win some awards!
Mike Wilmot
That's right.
John McMullen
What's, what's your favorite thing about the modular construction industry? You've been in 32 years now? Your don't show any sign signs of slowing down? What's your favorite part?
Mike Wilmot
Oh, John, I just love, love the fact that we can create something from nothing. I love the fact that I have taken a clean slate and developing it from nothing into a beautiful building. It's extremely fulfilling to see our customers eyes light up when they see a brand-new building, and it makes them look good. It's something that is very fulfilling. It's what I enjoy the most about what I do.
After 36 years of doing this, I get even more excited these days when I see a new building going in and seeing our customers happiness.
John McMullen
That's awesome. That's awesome. Thank you, Mike. It's always great to talk to you. I know this is a challenging time for industry. We have a lot going on a lot of needs that we need to meet. But I know we're more than capable. I think you're doing a great job at the helm. I appreciate it and appreciate your time. I can't wait to see you again in that World of Modular in Las Vegas.
Mike Wilmot
Thanks, John. Appreciate it.
John McMullen
My name is John McMullen. And this has been another episode of Inside Modular: The Podcast of Commercial Modular Construction. Until next time.