December 22, 2006
level in '07 - And there's much more in latest industry update
More room, down
by the Bay
Grand Rapids Oks rules
for responsible contracting
AGC chapters join
use shovels, just this once Ground broken on new training facility
level in '07 - And there's much more in latest industry update
Michigan's statewide construction employment is projected
to remain about the same from 2006 to 2007 - but it will still
be down about 10.5 percent from the peak level of 2000.
That work outlook for the near-term future of Michigan's construction
industry may be the most significant tidbit of information to
Michigan's Hardhats. But it wasn't the only one: earlier this
month an industry leader offered one of the most comprehensive
updates of the state of the state's construction industry in
Ron Hausmann, president of Walbridge-Aldinger's Heavy, Civil
and Special Construction Group, 2007 chairman of the Michigan
Association of Constructors, and vice chair AGC-Greater Detroit
Chapter, on Dec. 4 made a presentation at the annual Economic
Outlook luncheon for the Economic Club of Detroit. He used information
gathered from the Construction Association of Michigan, Associated
General Contractors of America, McGraw-Hill Publishers, Ferris
State University, the University of Michigan and the Engineering
Such a high-resolution snapshot of Michigan's construction
industry has probably never been taken in recent years. Here
are some highlights of Hausmann's speech:
- Michigan's eight-year-long economic downturn, according to
the University of Michigan, is the longest such stretch since
the Great Depression of the 1930's.
However, Hausmann pointed out, "in spite of our recent Michigan
economy, our construction workforce employment picture appears
pretty positive. In fact we will need to develop more tradesmen
and women, and engineers and architects to fill the gaps that
are certain to hit us as 'boomers' move on.
"Overall, our employment needs will remain strong and healthy
as an industry, but different markets will have varying project
needs. Skilled crafts in particular will continue to be needed
to execute complex projects, which will continue in Michigan."
- Michigan's construction industry costs for 2006 will be about
$15 billion, of which $11 billion dollars is wages. Michigan's
construction industry employs 193,000. About 87,000 of these
workers are employed in Southeast Michigan. The Michigan construction
Industry contains about 26,600 construction companies, of which
10,600 are in seven counties in Southeast Michigan.
- Our state's construction industry probably generates $36
billion in overall Michigan economic activity. That is nearly
10 percent of the State of Michigan's $376 billion gross-state-product.
- According to one recent industry study, a majority of Michigan's
construction companies are reporting increased sales in 2006
and a majority (60%) are projecting that their annual sales will
- The 2007 construction outlook for Michigan offers good news
for unionized construction sector - simply because union trades
are not heavily employed in the troubled housing market. Hausmann
said residential construction in Michigan dropped 40 percent
in 2006, and will stay at that level in 2007. Other sectors are
expected to stay the same or improve.
- In other building sectors in Michigan, according to Hausmann:
- Office construction will be flat. So will retail.
- Medical and hospital construction had strong starts in 2006,
which will increase in 2007
- Manufacturing & maintenance were up 10% in 2006, and
will stay strong into 2007.
- Educational enjoyed a very strong market in 2006, which will
continue into next year.
- Highways increased in 2006 by 25% and should jump another
12% into 2007
- Waste and water will continue with 7-8 percent growth for
Hausmann included national construction trends, also.
- Construction is the only segment of the U.S. economy projected
to see increased labor growth between now and 2015. Projections
show that the need for workers nationally will be 15% beyond
current replacement availability. Nationally, the construction
industry employs more than seven million workers.
- The U.S. construction industry represents about $1.2 trillion,
or about 9 percent of our Gross Domestic Product.
- Most projections show that nationally, 2007 construction
starts should be about the same as 2006, for the non-residential
- Looking into 2007, both nationally and in Michigan, the market
sectors which have the worst outlook are a) motor vehicle-related
construction b) homebuilding, and c) energy.
- The homebuilding slump nationally started in 2005 and will
continue through 2007 and into 2008. There were over 2 million
new home starts in 2005, but that rate is expected to steadily
decrease to 1.6 million in 2007.That would be a 20 percent drop.
Some experts, Hausmann said, indicate that in Michigan, new home
construction is currently down by 62% measured over the last
- The dramatic slippage in residential construction nationally
masks an otherwise robust nationwide construction industry. Every
non-residential segment of construction is not expected to decline
- The worst of construction material price spikes (steel and
metals) in 2005 and 2007 appear to be over, mitigated to some
degree by the downturn in residential construction.
room, down by the Bay
By Marty Mulcahy
BAY CITY - The largest expansion project ever at the Bay Regional
Medical Center will result in a new outpatient service building,
improved patient flow in the facility, and more room for some
several patient services.
The four-level expansion is being managed by design-builder
HBE, which is overseeing the addition of 140,000 square-feet
of space and 66,000 square-feet of renovated space.
"We have a very good, competent workforce," said
Jim Bourdon, director of support service and facility management
for Bay Regional. About 75 construction workers are currently
on site. "They've done a good job, they've been cooperative,
and the project is on time."
The new building will consolidate outpatient service and together
with the renovated space will allow the hospital to offer improved
services in cardiology, nuclear medicine, endoscopy, and women's
health. The fourth floor of the addition will remain empty to
allow for future expansion.
Construction of the $40 million project began in December
2005 and completion is expected at the end of August 2007. A
four-story building on the site was demolished to allow for the
new construction. Bourdon said the hospital was fortunate because
the addition is mostly being tied into hallway space in the main
hospital building area, which simplifies the design and construction
"We haven't run into any major issues," Bourdon
said. "We've had to move around a lot of our own non-patient
departments and vacate some areas, but nothing has resulted in
a disruption to patient services."
WRAPPING A DUCT section at the McClaren Bay
Regional Medical Center's expansion/renovation project is Grant
Glazier of Heat and Frost Insulators Local 47.
CUTTING BLOCK outside the Bay Regional Medical
Center project in Bay City is Greg Hall of BAC Local 9.
Rapids Oks rules for responsible contracting
GRAND RAPIDS - Beefed-up responsible contracting guidelines
for taxpayer-funded construction have been put into place by
The state's second biggest city is now the largest municipality
in the state to have a full set of responsible contracting regulations
on its books.
"Responsible contracting isn't a union or nonunion issue,"
said Ed Haynor of the West Michigan Construction Alliance, and
Michigan Association for Responsible Contracting, union-backed
groups seeking to implement such policies in school districts
and municipalities. "Responsible contracting means that
contractors bidding for work have to rise to a level of quality
that's laid out in the language. It levels the playing field
for all contractors bidding for work, and that's in the interest
The West Michigan alliance, through the MARC, has been a major
advocate for responsible contracting for the last few years.
Responsible contracting suggests that before school boards and
municipal authorities enter into any construction-related agreements,
bidding contractors should meet several standards. They include:
- Documentation that contractors' training programs meet federal
- An alcohol- and drug-free workplace policy;
- A local hiring policy, if applicable;
- Credit for working with local schools to get youth involved
in the building trades, if applicable;
- Documentation of any civil suits, arbitrations, or criminal
convictions that have occurred within the past five years.
- Documentation of safety policies;
- An explanation of the contractor's experience in the field.
- Ratings for worker's compensation insurance.
A working group that included Haynor, union building trades
agents, an Associated Builders and Contractors representative,
and an AGC representative, made the proposals to the Grand Rapids
City Commission, which accepted them on Nov. 21. As a result,
Grand Rapids will be asking contractors to answer questions about
those areas beginning in 2007.
Dianette Hight, the city's engineering services administrator,
said Grand Rapids has maintained a contractor pre-qualification
process since 1984 that was last updated in 2003. It applies
to general contractors as well as subcontractors who do more
than $10,000 of business with the city.
The working group, she said, is advising those requirements
be stiffened by incorporating responsible contracting principles
in five areas.
Hight noted the engineering department for the city of Grand
Rapids typically oversees from $40 million to $50 million in
construction activity in any given year. The new requirements,
she said, should help ensure the city get what its citizens are
"We're trying to get the best quality product at the
end of construction," she said.
Haynor worked in the study group along with Dick Brunvand
of the Michigan Associated General Contractors, Buck Geno of
Plumbers, Pipe Fitters and Service Trades Local 174, and Sean
Egan of IBEW Local 275.
"We're dealing with an industry that doesn't like to
bare its dirty laundry," Haynor said. "Our position
is, is that if it's true that union contractors are best for
quality and safety, then responsible contracting rules should
help our ability to get work."
(Michigan Construction News.com contributed this report)
Michigan AGC chapters join
By Marty Mulcahy
Members of the Associated General Contractors, Greater
Detroit Chapter, voted on Dec. 7 to unanimously to merge with
the Michigan Chapter, AGC. The vote followed a Dec. 1 unanimous
vote by Michigan Chapter AGC for the merger plan.
On Jan. 1, the two chapters will form a new, statewide AGC
organization to be called the Michigan Association of Constructors
"I think the merger has a lot to offer our existing contractors
on every level," said Bart Carrigan, president of the new
MAC. "We will save some money in the reorganization, but
more importantly, the merger will allow us to be more able to
attractive new contractors, which is the lifeblood of an organization
"Plus in some cases it has been confusing for potential
customers to know which group to deal with, and that was especially
true when it came to lobbying. "
Odell Jones III, 2006 chairman of the AGC, Greater Detroit
Chapter, from Jomar Building Co., Detroit, told his members that
the merger process got underway last April. At that time he found
a common sense of purpose with the president of the Michigan
Chapter, AGC, Michael Emmenecker, from Spence Brothers, Saginaw,
to build on the already strong foundation that exists between
the two groups.
"Our goal was to strengthen AGC in Michigan for years
to come," he said. "We felt that a merger would be
worth the effort since a stronger AGC would mean a more resourceful
and cost-effective association for contractors across our state."
The Greater Detroit Chapter was formed in 1916 and the Michigan
Chapter followed in 1927. Carrigan said the merger "focused
on the right things."
Jones added, "We knew that merger attempts had been made
in the past, but by reducing dues, eliminating program redundancies,
streamlining the staff, cutting overhead, and offering an expanded
program of services to members of both chapters, everyone would
benefit, so we were committed to making this merger work."
The MAC's headquarters will be located in Lansing in the building
that's been home to the Michigan Chapter, AGC. The new MAC will
retain its affiliation with the Associated General Contractors
A regional office is to be maintained in the Detroit suburb
of Redford Township. On staff will be:
- Michael Smith, as executive vice president.
- Viki Gotts, as director of education.
- Sam Veltri, who will continue in his role in the region as
director of labor relations.
- Rick Mee, who also continue his delivery of safety services
to AGC members in the metropolitan Detroit region.
- Ronald L. Hausmann, PE, Walbridge Aldinger, Detroit, will
serve as MAC chairman in 2007.
(MichiganConstructionNews.com contributed to this report.)
Workers use shovels, just this once Ground broken on new training
By Marty Mulcahy
Iron Workers Local 25 officers, Joint Apprenticeship Committee
members and members of their contractors' association dug into
their new digs on Nov. 30, during a soggy groundbreaking event
at their new apprenticeship training facility in Wixom.
The 32,500-square-foot building will be located on a six-acre
site off of Pontiac Trail, significantly expanding the room available
for training. The existing Local 25 training center, located
along I-96 in Livonia, has housed Local 25's educational programs
"It's just a real tight site in Livonia for what we need
to do," said Local 25 apprenticeship coordinator Mike Relyin.
"The new building will give us a lot more flexibility. We
will have three classrooms, vs. only one in Livonia. We will
also have an indoor shop, including hands-on mock-ups for all
facets of the iron working trade. Our current shop only offers
in-shop training for welding."
Schonsheck, Inc. is managing the construction of the new building,
which will be on a single level. Site work has already begun,
and footings were expected to start going in this month. Mark
Schafer, director of project development for Schonsheck, said
the period between approving the concept of a new building, finding
the site and then getting the construction process rolling, took
about two years.
"I'm glad that we've been able to get to this point,"
said Bill Treharne of Midwest Steel, who chairs the Joint Apprenticeship
Committee. "I really believe that this facility will improve
the way we train our future workforce, which will allow us to
better compete in the future."
A steady rain pelted attendees at the groundbreaking, which
included representatives from the Michigan Building and Construction
Trades Council, and contractor associations: the Great Lakes
Fabricators and Erectors, the Metal Building Association, the
Reinforcing Contractors and the Conveyor Association.
"The effort to bring us to where we are today was truly
a joint effort with our contractors and associations, who played
a big role in making this happen," said Local Business Manager
Jim Hamric. "Without them, we're out of the game. So I'm
really excited about this project, and I think it's a tremendous
positive for the future of iron worker training."
AMONG THOSE HOLDING SHOVELS at the groundbreaking
of the new Local 25 apprenticeship training facility are (l-r)
Schonsheck's Mark Schafer, Local 25 BA and JAC member Bill Sennett,
Local 25 Business Manager Jim Hamric and Bill Treharne of Midwest
Steelworkers stage Goodyear protests
WASHINGTON (PAI) - The Steel Workers are using protests to highlight
their dispute with tiremaker Goodyear, which is trying to strip
the company's 30,000 retirees and their 15,000 dependents of
health insurance and break the union, too, USW President Leo
Gerard told the AFL-CIO Organizing Summit on Dec. 9.
The United Steelworkers this month initiated protests and
leafletting outside 168 retail tire stores nationwide.
The company forced its 15,000 USW members to strike on Oct.
5, walking out of 15 U.S. plants.
In their agreement three years ago with a company "then
on the brink of collapse," as Gerard put it, Goodyear was
allowed to cut costs by closing some U.S. plants and cutting
wages. But it also agreed to card-check recognition and company
neutrality in organizing drives.
Since it returned to profitability, Goodyear has invested
millions of dollars in a new plant in low-wage China and its
latest demands include more plant closures in the U.S. It also
gave executives multi-million-dollar salaries and bonuses. Now
Goodyear demands retiree health care cuts and union-busting measures.
Gerard said it did so because it judged the political climate
ripe for that - before the November election.
"This has to be a fight for all. This has to show the Wall
Street, Gucci-shoed, latte-drinking, coupon-clipping, limo-driving,
rotten bastards that we're not going to take it any more,"
One forecaster sees recession in 2007
WASHINGTON, D.C. - Weakness in the housing market is likely to
push the economy into a recession next year, according to a forecast
by the Center for Economic and Policy Research, an independent,
nonpartisan think tank
"Recession Looms for the U.S. Economy in 2007,"
by economist Dean Baker, predicts that the economic recovery
that began in November 2001 will come to an end in 2007.
"This recovery has been fueled by a housing bubble, just
as the late 90s cycle was fueled by a stock bubble," said
Baker. "Now that the housing market has weakened, Americans
are looking at a recession in 2007." The study predicts
residential construction will drop 12 percent in 2007.
Baker expects that the weakness from the housing market, which
is already spreading over to other sectors of the economy, will
have an even larger impact in 2007 as consumers lose the ability
to borrow against dwindling home equity. With weak consumer demand
dampening investment, the economy is likely to shrink by close
to 1 percentage point over the course of the year, he said.