Economic climate to blame for closing
Continuing economic troubles, particularly in the construction industry, have claimed a longtime Tonganoxie business.
Mike Reischman, owner of Meadows Construction with his wife, Lisa, confirmed he is closing down the business. The couple bought the business in 2005 from Larry and Lois Meadows, for whom Mike worked for 26 years, and maintained a business relationship with Meadows.
A lack of work, the unprofitable bidding atmosphere the bad economy fostered and little indication the economy would turn around led to the decision to close the business, Reischman said.
Larry Meadows said the fate of Meadows Construction wasn’t an isolated one. Many contractors have gone bankrupt or left the business in the past three years because they or competitors are bidding jobs at or below costs, he said.
Meadows said the construction industry was facing its most difficult times since he started Meadows Construction with his wife in 1972, including the recession of the early 1980s.
“It was pretty tough in the 1980s,” he said. “I remember my accountant said then it would turn around in a year. I told him a year later, ‘I thought you said this was going to turn around.’ That was two years. But this has already gone on longer, and it’s worse.”
Meadows Construction was active contracting for pubic works jobs for cities, counties, school districts and the state within a 150-mile radius of Tonganoxie, Meadows said. It was a diversified company able to do complete street reconstruction projects from street removal, to ground preparation, to concrete work, to street paving, to utility work for major projects or take on those individual components, he said.
Meadows said that over the years 1 percent of the company’s business was in Tonganoxie., but he said it’s done more since 1995.
Signs on the fence around the Meadows Construction yard announce the firm’s equipment will be sold at an upcoming online auction.
Used construction equipment is commanding good prices from overseas buyers, Meadows said. That sell off means contractors will be forced to buy overseas or new when the economy turns around, he said.
Cities, school districts, counties and other jurisdictions maybe enjoying good bid prices now, but the loss of contractors would adversely change that demand equation when the economy recovers, Meadows said.
“No city should budget on current bid contracts,” he said.