The Building Tradesman Current Issue | Back Issues Index

April 24, 2009

For trades, misery now moves from unemployment, to pensions, to politics

Difficult to light a fire under several big power plant projects

Kennecott Mine work awaits rebound in nickel market

Former power plant begins transformation into office space

New leadership, new opportunities for labor

News Briefs


For trades, misery now moves from unemployment, to pensions, to politics

By Marty Mulcahy
Managing Editor

LANSING - Good news about employment or financial prospects in the construction industry was nowhere to be found from AFL-CIO Building Trades Department Secretary-Treasurer Sean McGarvey, who spoke April 1 to delegates to the Michigan Building and Construction Trades Council's 50th Legislative Conference.

Unemployment around the country in most local unions, across all crafts, is now "steadily rising" past an average of 22 percent, he said, and is up to 40 percent and beyond in some locals. (Some building trades locals in Michigan are familiar with the "beyond" part).

"Usually work will come back with the warmer weather, but that's not what we're seeing," said McGarvey, the No. 2 man at the Building Trades Department. "There's just no light at the end of the tunnel."

McGarvey pointed out that at a workforce development seminar held at a Building Trades Department seminar two years ago in Washington D.C., Michigan Building and Construction Trades Council Chief Elected Officer Patrick Devlin told him that the seminar subject of attracting and retaining workers probably held little interest for building trades leaders in Michigan.

"'Workforce development?'" McGarvey said. "In Michigan, you had no idea why were talking about that. You've been in a deep, long recession. And now what we've seen in the last five months is a collapse of the U.S. construction industry."

McGarvey added: "I know how tough it is to be a business manager. You drive into the local union parking lot and you see 200 or 300 guys with no work and no health insurance. And you've got nothing to give them."

If misery loves company, Michigan now has plenty of company. Of course, there's the unemployment in every state of the union. But it's worse than that: a little farther back in the jobs pipeline, McGarvey said contractors aren't getting paid and developers can't get financing for new work.

And now building trades pension plans are really starting to suffer.

"As the stock market started to slide, it has had a serious, serious impact on pension funds," McGarvey said. He said last fall's stock market "implosion" makes "irrelevant" the previous recovery blueprints of pension plans, which had banked on improving investment returns and greater man-hours to improve the funds' bottom lines.

Congress changed federal pension laws two years ago in an attempt to help pension funds work their way past the turmoil in the stock market. McGarvey said the weak stock market and now the downturn in work hours are going to necessitate another change in ERISA, the federal law governing pensions. The alternative, he said, is that poorly funded pension plans - and there are now several in the building trades - "can't survive."

Soon to follow, he said, building trades health care funds are going to be rocked. When workers are unemployed, he said they go to the doctor, get the surgery they've been putting off, and get their teeth fixed and their new glasses. "All that is starting to hurt" employers and the funds McGarvey said. "I hate to be doom and gloom about all this, but that's the reality."

Politically, he said the news is a little better, although he acknowledged that Michigan's union workforce, especially in the UAW, is angry with President Obama. The president last month continued to call for more "sacrifice" from union autoworkers, who have already made major contractual concessions.

Similar concessions haven't been demanded of workers in the bailed-out financial industry. In addition, Obama ousted General Motors CEO Rick Waggoner, while leaving in place numerous heads of financial firms whose failures have cost the American taxpayer hundreds of billions more than the loans given to GM and Chrysler.

"A lot of people are disappointed in President Obama, especially here with his stance on the auto industry," McGarvey said. "But there's been a sea-change in Washington, and the change is dramatic. First, we have a president from a union-dense area; he listens to us."

He said building trades leaders visited the White House a single time during the eight years of the Bush Administration. Since Obama has been in office, McGarvey said, they have been to the White House seven times. He said "the phone rings every day" with calls between the Building Trades Department and leaders in the Obama Administration.

McGarvey said the stimulus package will provide $500 billion "that will directly affect our members." Republicans, he said, attempted to strip Davis-Bacon provisions from the spending, but the Obama Administration made sure the prevailing wage rules applied to the money.

But Democrats in the Senate, didn't escape scorn from McGarvey. A handful - especially those who hail from more conservative Southern and Western states - have been waffling on their support of labor's No. 1 legislative priority, the Employee Free Choice Act, which would make it easier for unions to organize. One Republican senator, moderate Arlen Spector from Pennsylvania, last month threw a monkey wrench into organized labor's plans for the EFCA. After supporting the measure last year, he announced that he would not support it this year. Spector's vote would have been the 60th vote in the Senate, enough to overcome a Republican filibuster. Spector is up for election next year.

"He will lose his election next year, but I'm far more disappointed with the Democrats," McGarvey said. "These are people who wouldn't be in the Senate without the help of organized labor."

He said one major problem with political influence can be solved internally by the building trades. The individual crafts have individual political action committees, and give their money to candidates and causes without coordinating with other trades - even though there is usually no difference in who they support. The result: McGarvey said when you add up all their contributions individually, the building trades are by a 4-1 margin the largest contributor to Democrats. The building trades are also the fifth largest contributor to Republicans - bigger contributors to the GOP than even the anti-union Associated Builders and Contractors.

"In Washington, they don't recognize us as one voice," he said. "They see painters, boilermakers, electricians. "If we speak as one voice, we would be much more effective. The problem is, we just can't get together enough."


Difficult to light a fire under several big power plant projects

By Marty Mulcahy
Managing Editor

LANSING - A powerful boost could be coming to Michigan's construction industry over the next decade. But for the thousands of Hardhats sitting on the bench - who are ready for work, now - the waiting is the hardest part.

The status of two major Michigan-based power plant projects were outlined at the 50th Legislative Conference of the Michigan Building and Construction Trades Council held April 1-2. (A project that falls under a different category - a nickel mine near Marquette - is described below). But several other power plants in the hopper are in various stages of the state and federal permitting process. All told, there's about $22 billion in potential power plant construction.

The projects, if they happen at all, can't come quickly enough. Here's a rundown of what's in the works, and why construction isn't starting anytime soon. (Hint: the state Department of Environmental Quality is mentioned frequently. Obtaining financing is no doubt an obstacle, too).

Consumers Energy - A new 800-megawatt Advanced Super-Critical Pulverized Coal Burner is being proposed for construction on the grounds of the utility's existing Karn-Weadock plant in Essexville, near Bay City.

The target for the start of construction: groundbreaking in 2012, with the construction process extending through 2017. Cost: about $2 billion. About 1,800 construction jobs would be created.

But construction of the plant is not a done deal. "This is far from over," said Consumers Energy Vice President Jim Pomaranski to delegates of the Michigan Building and Construction Trades Council.

He said there are hurdles that first need to be jumped, including the state issuance of environmental permits, which are in progress. There are also going to be regulatory requirements for limiting carbon emissions, but Consumers "doesn't know what those are going to look like," Pomaranski said. There is also the issue of the state's issuance of a certification of necessity, which was a major bone of contention between the Michigan Building and Construction Trades Council and Gov. Jennifer Granholm.

As we reported in our last two editions, Granholm shocked the state's construction industry in her state of the state address by issuing new limits on the construction of coal-burning power plants. She instituted a new level of requirements for the state Department of Environmental Quality (DEQ) to get information from utilities as to whether the state even needs four new coal-burning power plants proposed around Michigan. After pressure from the building trades, she apparently backed off, leaving only a requirement for utilities to submit a "carbon reduction strategy" that Pomaranski mentioned.

Public comments are also being taken by the Michigan DEQ regarding whether the plant should be constructed. After all that is said and done, Consumers Energy must make the call that the plant is financially feasible.

Pomaranski said the new plant would be built south of the existing works at the Karn-Weadock site. If and when the new plant is up and running, plans call for the abandonment of Units 1-6 at the plant, with Units 7-8 kept in operation.

Pomaranski said the new plant at Karn-Weadock is part of $6 billion in construction that the utility intends to sponsor over the next five years at its existing power plants, and for new construction.

An outage is currently wrapping up at Consumers' J.C. Campbell Plant, located between Holland and Grand Haven, and other environmental work will be going on at the Karn-Weadock plant. There are also miscellaneous infrastructure jobs, gas compressor work, and some $300 million in renewable energy projects that are in Consumers Energy's pipeline.

DTE Energy, Fermi III - Michigan has an aging fleet of power plants, one of the oldest in the nation, with some power production units half a century old. "They're doing yeoman's duty, in no small part because your people have helped maintain them," said DTE Energy Senior Vice President Ron May to delegates at the Michigan Building and Construction Trades Council's 50th Legislative Conference. "But it's not a bad idea at all to be looking at our choices for replacement."

And DTE Energy's primary choice for baseload power production is the construction of a new nuclear power plant on the grounds of the existing Fermi I and Fermi II plants near Monroe. Fermi II has been in operation since 1988, and Fermi I would be fully decommissioned during the construction process. But construction of Fermi III is still years away.

May said the process looks like this: DTE Energy applied to the Nuclear Regulatory Commission last September for a license to build a new nuclear plant. The NRC accepted the application, and is now in a 40-month review process that ends in spring 2012.

"Financing is currently risky, but by 2012, financing should be easier," May said. When DTE Energy obtains the license to build, May said they have a 20-year period to construct the plant.

Fermi II produces about 1,100 megawatts. Fermi III, a new-design boiling water reactor, would be cranked up to 1,500 megawatts. Plans call for both to run simultaneously. DTE Energy spokesman John Austerberry said current plans call for Fermi II to operate through 2025, and beyond.

Construction of Fermi III would take six to seven years. The price tag for the work is a reported $10 billion. "This time frame doesn't help you right now, but we're looking at a construction period from 2018 to 2025," May told the building trades. At peak employment, construction at the plant would employ about 2,500 Hardhats.

DTE is currently hosting the building trades for other jobs including pollution control work at the Monroe Power Plant, and an outage at Fermi II. Plans are also in place for the company to erect windmills in the Thumb.

May gave kudos to building trades workers hired by DTE. "I'm proud to say that when I speak to groups around the country, I tell them we have the best-skilled people," he said. "I give your guys a lot of credit."

He pointed out that on a New Mexico project power plant project, 75 percent of the construction workforce failed their drug and alcohol tests. "Stay strong on drug and alcohol issues, don't let up on that," he said. "It's a voracious problem in other parts of the country."

May added: "we will employ union labor. That is the promise. So let's be the best."

Wolverine Power Cooperative's "Clean Energy Venture" - Proposed to be constructed in a quarry in Rogers Township is a $1 billion clean-coal burning power plant designed with two 300-megawatt boilers. The facility's air permit application also calls for the use of up to 20 percent of fuel as sustainable biomass, such as switchgrass.

Wolverine Power is currently awaiting air quality permits from the Michigan Department of Environmental Quality. Craig Borr, Wolverine's executive vice president, told Richard Lamb of the Presque Isle County Advance in late February that "we are hopeful the Michigan Department of Environmental Quality will take action on the permit sometime this year. We don't know that and we have no guarantee of that, but we are optimistic we are going to see some action by the agency this year."

If those permits are granted, Borr said, Wolverine would then make the go- or no-go decision for construction to start after a detailed financial evaluation

L.S. Power Group, Midland - A site located northwest of South Saginaw Rd. and Waldo Ave. is still the planned destination of a $2 billion coal-fired plant. Plans are moving forward to gain permits for the plant, despite the loss late last year of one of the partners in the project, Dynegy.

Joy Buchanan, a spokesperson for L.S. Power Group, said earlier this year it was continuing to work on plans and permit applications for the project.

The 750-megawatt complex is to be located on a 130-acre site. At least 15 state and federal permits must be obtained before ground for the new facility can be broken.

Ripley Heating Plant, Northern Michigan University, Marquette - The Ripley Heating Plant supplies steam to most of the NMU campus' three million square feet of university facilities. The primary fuel for the heating plant is natural gas with fuel oil as a backup. The Heating Plant is also the primary distribution point for electricity purchased from the Marquette Board of Light.

NMU officials are proposing to add a Combined Heat and Power (CHP) Cogeneration addition to the existing plant. The project would utilize a high pressure boiler rated at 120,000-140,000 pounds per hour, capable of burning wood chips, coal and natural gas integrated with a 7-10 megawatt extraction steam turbine capable of producing the required University's thermal and electrical needs. The $55 million plant addition would save NMU up to $1.9 million annually, depending on the mix of fuel.

According to SourceWatch, the state Department of Environmental Quality issued a permit for the university to proceed with construction last May. However, upon appeal, the Environmental Protection Agency's Environmental Appeals Board effectively revoked the license to build, claiming the EPA must take into account the global warming effects of CO2 pollution.

Lansing Board of Water and Light - The Lansing utility is proposing construction of a 350-megawatt plant that would burn coal and biomass fuels like waste wood and waste crops or grasses.

The project is under review by the state's Department of Environmental Quality.

The plant would be built next to the Board of Water and Light's Erickson Station, and cost about $1 billion. The system's aging Eckert station would eventually be closed and its output replaced by the power produced by the new plant.



Kennecott Mine work awaits rebound in nickel market

LANSING - A mining project is proposed for land located 20 miles north of Marquette, which would create 200-400 construction jobs over a two-year period.

But when construction will start is anyone's guess. "The economy plays a role in the construction process," said Kennecott spokesman Matt Johnson, to the Michigan Building and Construction Trades Council delegates, at their April 1-2 Legislative Conference. "The green light could come at the end of the year."

Or not. Nickel prices, like the market for most other ores and metals, has declined with the rest of the economy. Rio Tinto, Kennecott's parent company, announced earlier this year that development of the mine has been "deferred until market conditions recover."

The proposed underground mine "has a high concentration of nickel," Johnson said, adding that the U.P. mine would be "the only primary nickel mine in the world."

The mine has its detractors in the environmental community. Johnson said state permits have been granted for the mine, and two of three legal challenges to those permits have been overcome in favor of the mine. The third is pending. Mine owners are also in talks with the Environmental Protection Agency.

If and when the nickel market does bounce back, the Kennecott Eage mine in the U.P.'s Yellow Dog Plains would consist of a two-mile-deep, 28-foot wide access tunnel bored into the earth. The mining would take place "100 percent underground," Johnson said. The nickel would be removed by 45 trucks making round-trips every day. The site would then be filled in and "100 percent reclaimed" Johnson said.

The project would also consist of the $80 million refurbishment of the 1960s-era Humboldt Mill, which has sat unused since the 1990s. That's a two-year project that would create 200 construction jobs. And, plans call for the construction of a 22-mile long access road on what is currently an old logging trail.

Beyond that, Rio Tinto owns or has leased the mineral rights to 500,000 acres of land in the U.P. "Geologists are looking for other deposits on that land right now," Johnson said.


Former power plant begins transformation into office space

By Marty Mulcahy
Managing Editor

LANSING -The ongoing transformation of the Ottawa Street Power Station into the headquarters of the Accident Fund Insurance Company of America in recent months has made the structure a shell of its former self.

Currently a dusty, dirty, cavernous building - now devoid of old power plant equipment with nearly every interior nook and cranny exposed - work over the next two years by The Christman Co. and the building trades will create an airy office building that's likely to be one of the coolest office towers in Michigan.

There are currently about 90 Hardhats on site, a number that will ramp up to as many as 250 when employment peaks out. Interior demolition began last fall, and now the project substantially consists of Hardhats removing iron and concrete that doesn't need to be there, and shoring up the structure with new iron and support where necessary. "We left what needs to be left to maintain the stability of the building," said John Holmstrom, senior vice president for Christman.

He said nine new floors are being created in the building, with new steel being lowered through a shaft in the roof. Then the steel is wheeled around on a cart to where it needs to go. "It's like building a ship in a bottle," Holmstrom said.

The Accident Fund's new $182 million headquarters will span 333,000 square feet, including the renovated building and a four-story addition on the north side. Demolition of an adjacent parking deck will also open up the seven-acre campus to the rest of the downtown area. In addition to the office space, the project will include a large atrium, a top floor meeting room, a café and a wellness area.

"We are proud to be a part of the transformation of this magnificent building and the future
development of downtown Lansing," said Elizabeth R. Haar, president and CEO of the Accident
Fund, when the new design was unveiled last year. "We can't wait to share this exceptional new home with our employees, customers, business partners and the entire mid-Michigan community."

Last month, the building was added to the National Register of Historic Places by the National Park Service. "It's wonderful to see this amazing building get the recognition it deserves," Haar said. "This inclusion on the National Register of Historic Places shines a positive light on all of downtown Lansing and ensures that the rich history of the station will be preserved and honored as the building takes on a new life."

The information that accompanied the National Register designation said: "The Ottawa Street Power Station, located at 217 E. Ottawa St. along the Grand River, has been one of the downtown skyline's most distinguishing features since it was built in 1939 by the Lansing Board of Water and Light. The power station was designed in the distinctive Art Deco style, and is significant for both its grandeur and its role in providing electricity and steam heat to downtown Lansing from 1939 until the late 1980s. Besides the Michigan Capitol dome itself, the power station - with its broad base, stepped arch windows and metal doors, blocky tower form and graded-hue masonry - is one of the capital city's most visually dominating structures."

For a decade or so after the 25-megawatt plant went dead, city leaders unsuccessfully tried to lure suitable tenants for the landmark building. The Board of Water and Light finally decided to use a portion of the structure to house a chilled water system to cool downtown buildings, in a project that was completed in 2001. All of that work will be torn out as part of this project, and a new chilled water plant will be built elsewhere.

The Accident Fund will also pursue LEED (Leadership in Energy and Environmental Design) certification by the U.G. Green Building Council.

Holmstrom said the biggest challenge can be described in a basic explanation of what they're doing. "We're adapting an old powerhouse into an office building," he said. "The tradespeople have been excellent, it's been going great out here. Right now it's a diamond in the rough, but it's going to be beautiful when it's done."
Construction is expected to be complete by the first quarter of 2011.

FORMERLY THE Lansing Board of Water and Light's Ottawa Street Power Station, the Christman Co. and the building trades are transforming this gem of a building into a new headquarters for the Accident Fund Insurance Co. of America. Photos of this building have graced these pages before. In 2001 a downtown chiller system was constructed in the building, which was completed in 1939. The colors of the exterior brick represent the process of the burning of coal.

WORKING IN THE OLD turbine bay of the former Ottawa Street powerhouse in Lansing is Jeff Bradley of Iron Workers Local 25, working for Douglas Steel. This area will become an atrium for the renovated Accident Fund headquarters.


New leadership, new opportunities for labor

SILVER SPRING, Md. (PAI) -- AFL-CIO President John J. Sweeney formally told top leaders of the federation that he will retire at the AFL-CIO Convention in September.

Sweeney's statement, at the April 6 closed-door meeting of the AFL-CIO's 21-member Executive Committee at the George Meany Center/National Labor College in Silver Spring, Md., was confirmed by a federation spokeswoman.

It also came as Sweeney, Change To Win leaders and National Education Association President Dennis Van Roekel announced creation of the National Labor Coordinating Committee, a group of presidents of the nation's 12 largest unions.

In arrangements worked out by American Rights At Work President David Bonior of Michigan, the committee is the first concrete step towards reunifying the labor movement all under one roof. And that includes the 3.2-million-member NEA, which is both unaligned with either labor federation and the nation's largest union.

Sweeney's retirement was expected. The former Service Employees president, who will turn 75 in May 5, has led the now-56-union group since 1995, when his slate ousted incumbent Tom Donohue, who took over from Lane Kirkland months before.

Sweeney's departure also comes at a key time for labor: Workers played a top role in electing pro-worker Democratic presidential nominee Barack Obama to the White House and increasing pro-worker ranks in the Democratic-run Congress.

Increased political activism and mobilization, to enhance the chances of pro-worker legislation in Congress and nationwide, was and is a top Sweeney cause. The results were that unionists and their families were more than one-fifth of the electorate in 2008, almost double the share (12.4%) of union members in the workforce.

But even as Sweeney leaves, problems remain:

* Labor is still split. One of the leading events of Sweeney's 14 years at the federation's helm was the 2005 withdrawal of seven unions - the United Food and Commercial Workers, the Teamsters, the Laborers, the Service Employees International Union, UNITE HERE (apparel hotel, textile workers), the Carpenters and the United Farm Workers - to form Change To Win.

CTW wanted more emphasis on organizing and less on politics, but it has joined the AFL-CIO's political efforts. The new coordinating committee is the first step to heal the split.

But Change To Win has its own problems: UNITE HERE has divided and a majority of its board voted to talk with Sweeney on re-affiliation with the AFL-CIO. UNITE HERE also charged the SEIU was trying to take it over. SEIU has an internal battle with its biggest West Coast local. The Laborers, while not back in the AFL-CIO yet, are half-in, half-out, as members of its Building and Construction Trades Department.

* The Employee Free Choice Act, labor's #1 legislative priority, which Obama supports and pledged to sign, faces a planned GOP Senate filibuster. It has yet to get the 60 committed senators it needs to break a fatal filibuster. A key senator, past co-sponsor Arlen Specter, R-Pa., defected under pressure from business and his party's Radical Right, which wants to beat him in a primary next year. Several Democrats, notably Blanche Lincoln, D-Ark., and Dianne Feinstein, D-Calif., have drifted away.

The bill would help level the playing field between workers and bosses in organizing and bargaining, by writing into law that workers -- not employers -- get to choose how they want their union recognized: Through an NLRB-run election or through the agency's verification that the union collected authorization cards from a majority of employees at a worksite.

* Even without the CTW unions, the number of members in AFL-CIO-affiliated unions declined by a net of 43,326 from 2007 to 2008, and by 139,474 from 2003 to 2008, the federation's own figures show.

That decline in turn has hurt the AFL-CIO's finances, which depend on remittances - calculated on a per-member basis - from its 56 member unions, plus payments from its affinity credit card. The federation asked for voluntary contributions last year to pay for the big political push, but the payments fell short of goals.

* Successorship questions. Until Sweeney ousted Donohue at the 1995 convention in New York City, AFL-CIO presidents were often succeeded by their #2 officers, the secretary-treasurers. Current Secretary-Treasurer Richard L. Trumka, a former Mine Workers president, is a leading candidate to succeed Sweeney. But at least one CTW union that might return to the AFL-CIO would not do so if Trumka is in the top job. And other names have been floated for Sweeney's post.

* Structure. Any new, unified labor federation must figure out its structure - the consensus-based but sometimes-slow AFL-CIO, the leaner top-down CTW, or a mix of both. And it must figure out what to emphasize and what to leave to member unions.



News Briefs

Endorsements set for school boards
The following school board trustee candidates requested and were granted an endorsement from the Political Action Committee of the Greater Detroit Building and Construction Trades Council.

These are just a handful of candidates that will appear on Board of Education elections across the state on Tuesday, May 5. Building trades union members are urged to vote for candidates who support the goals of organized labor.

Capac Community School Board - Norm McDunnah
Chippewa Valley School Board -Frank Bednard, Henry Chiodini, Julie Ariganello Fitzgerald
Clintondale Board of Education - Michael Scott
Fitzgerald Board of Education - Cheryl Moreno
Hazel Park School Board - Charles Hemple
Roseville School Board - Joseph Steenland, Brent White
Wyandotte School Board - Daniel Cusson

Welcome drop for work zone fatalities
WASHINGTON -National Work Zone Awareness Week kicked off April 6 with the announcement of a 17 percent drop in work zone fatalities and injuries in 2007 vs. 2006.

"I am encouraged by the decrease in fatalities and injuries," said Transportation Secretary Ray LaHood. "With $27 billion in economic recovery funds fueling thousands of highway construction and repair projects nationwide, drivers must be more careful than ever."

The drop in injuries and fatalities came during the busiest road work season in the U.S. in seven years. Work zone fatalities and injuries have fallen over the last ten years. The 17 percent drop in 2007, the most recent year for which data is available, represents the sharpest single-year percentage decline since the week's inception a decade ago.

There were 835 fatalities in 2007, down from 1,004 fatalities in 2006. Four of every five victims in a work zone crash are motorists, not highway workers as is commonly believed.

The National Work Zone Awareness Week is a national campaign conducted at the start of construction season to encourage safe driving through highway construction sites. It is observed nationally by state, local and federal transportation officials the first week of April, which coincides with the start of highway construction season.


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