L - R: Industry icon Mike Lindeman and David Nickum, president and chief executive officer of Valley Aggregate Transport, Inc. standing next to one of 175 power-units, at one of three company terminals.

YUBA CITY - While you might not think it likely, this North-Central Valley farming community is the locus of one of the biggest stories in California’s dump truck industry - a story about one of the state’s “newest” and largest bottom dump operators - and a tale that offers lessons in business continuity, growth and opportunity.

Valley Aggregate Transport, Inc., operating under an Employee Stock Ownership Plan (ESOP), is owned by its 200-plus employees and controls a fleet of more than 175 power units out of three terminals - Yuba City (headquarters), Sacramento and Stockton. A fourth location, in Placerville, is the location of the company’s first venture in to a new business opportunity - trash hauling under contract to Waste Management, the nation’s largest waste disposal company.

The ESOP is a relatively new concept (the first started in 1974) and today there are some 10,000 in the U.S. according to the ESOP Association, an organization that counts Valley Aggregate as one of its members. Valley Aggregate may be the only ESOP in California’s dump truck business - it is certainly the biggest.

The plan creates special tax advantages for the company under both federal and state law because it operates as an employee benefit plan.
The new company evolved as a business entity in January of this year, but the company has deep roots in California’s bottom dump history, according to David Nickum, president and chief executive officer. The company was formed from a merger of Lindeman Brothers Trucking (owned by industry icon Mike Lindeman) and Yuba Trucking (owned by Kevin Cotter) last year, which was then purchased by the ESOP-based business.

“The basic story is that Mike got to a place in his life where he wanted a successor for the business,” Nickum said. “He wanted to provide many loyal employees with an opportunity to continue to be employed with a good job and to take the company to the next level.”
Lindeman explains it more directly, “I wanted to sell the business and explored a variety of options, finally settling on the ESOP route as one that would allow the company my family, father LaFay and uncle Lyle Lindeman started during the Great Depression to continue and to grow.”

“If it was up to me to make this company bigger, it would never have happened,” Lindeman said. “That’s where Nickum comes in - he’s got the ability and the training to get this thing to really click.”
Cotter, who had sold Yuba Trucking to Lindeman, agrees.
“He (Nickum) has been great to work with in setting this up,” said Cotter, who has joined the new company as chief financial officer. “David brought us some operational efficiencies that added some phenomenal savings.”

David Nickum’s education and experience has brought many operational efficiencies and savings to the company. As Valley Aggregate’s new President his responsibilities are focused on managing one of the largest construction trucking firms in California.

Nickum, personally, is much more modest. He mentions that he has had some experience in the trucking business as a manager and now an officer in his family business, Valley Farm Transport, but neglects to mention the size of the firm’s fleet. He also fails to dwell on his Harvard Business School background.

It’s going to take all of that experience, training and skill to operate in California’s tricky business economy. Right now the business is operating full tilt with major contracts in the highway, public works and private construction markets.

“We are very optimistic about the future,” Nickum said. “This was a very good company with a very good customer base. Our goal is to take it up to the next level.”
One of the biggest problems facing Valley Aggregate Transport and virtually every other company in the construction industry is finding or hiring and retaining high quality employees, especially drivers. This is another area where the business structure should help, Nickum explained.

“Ownership is a great incentive,” he said. “This is a real retention benefit and we hope it will bring in a more qualified driver to us.”

The key to the “retention tool” aspect, according to Cotter, is that ESOP rules require gradual vesting for the employees to gain full ownership in their shares in the company. Valley Aggregate is set up with a five-year vesting schedule which should help keep employees tied to the company for the near term. The first such distribution will be held at a special company meeting this October.

Another benefit for workers is the transparency of the business. Since they are all owners, employees will know how the business is doing (financially) and what their contribution to the effort means to the bottom line - a powerful motivator for anyone.
“We have to operate under strict reporting rules, much like a publicly held company,” Cotter said. Those rules require the company to make regular reports to the workers and help establish the value of the employees’ shares in the firm.
“While everybody has an equity position in this company, everybody is also accountable for their performance,” Nickum added.

L - R: Mike Lindeman and John Nelson an estimator that has worked for Mike’s trucking companies and now Valley Aggregate Transport, Inc. for 17 years.

Lindeman agrees that the rules have changed, especially for company management.
“There’s not going to be any flying off to Fiji for a ‘conference’ or putting kids on the payroll under the ESOP,” said Lindeman, who is staying on with the new firm as an estimator and scheduler. He admits he didn’t want to leave the industry which he loves and is in his blood - he just wanted out of the “management piece.”

“I get to do my thing - sell, talk with the customers - and work on complex scheduling,” he said. “I keep a spreadsheet on our activities, keeping an eye out for bulges, when there is more work than trucks, and conversely, more trucks than work we make the adjustments.”

Lindeman, a philosophy graduate from Stanford, will also keep sending his famously funny newsletter “The Lindeman Letter” to his friends and associates in the industry.
“I feel good about the future, that this business is going to go on and that the people who worked for me and my family all these years are going to have the opportunity to be rewarded for their commitment and loyalty,” he said.

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