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December 26, 2008

They're 'willing to risk a worse global economic calamity in order to break a union'

Do we become a nation that…no longer has a path to middle class prosperity?

Delta Dental's HQ becomes bigger, greener with expansion

MSU reels in $550M isotope beam facility

Dow Corning announces $1B expansion

Obama signals support for jobs proposal that any Hardhat would love

News Briefs

 

They're 'willing to risk a worse global economic calamity in order to break a union'

By Robert Borosage
Campaign for America's Future

In their last obstruction, Mitch "Dr. No" McConnell's Senate Republicans blocked a bridge loan for the auto companies, unwilling even to sustain them long enough for a new administration to sculpt a responsible response to their crisis.

What was the sticking point? It wasn't getting rid of the CEOs that drove the companies into the ditch. It wasn't forcing the creditors to cut their loans in exchange for stock, giving them a stake in the future. It wasn't accepting an auto czar to enforce the agreement and drive a transition to fuel efficient cars. That was agreed to.

No. Led by benighted Tennessee Senator Bob Corker - known previously solely for his "call me" race-bait campaign ad that helped him win his 2006 election - Republicans wanted to break the union and punish the workers.

They insisted that the United Auto Workers agree to cutting workers wages and benefits immediately to match the average hourly compensation paid by non-union foreign auto companies based in the South. This would entail cuts in pay by about 50 percent within the next months. For Republicans, the problem wasn't the worst economic downturn since the Great Depression. It wasn't wrong-headed management that was skewered when soaring gas prices wiped out their SUV cash cows. It wasn't the Wall Street dominated trade policies that sacrificed U.S. manufacturing behind a high dollar that made it profitable to move plants and production abroad and benefited foreign competitors.

No. For the Republican senators, the bailout was a chance for a little class warfare. Why should an autoworker make $50,000-$60,000 a year, plus health care? The workers should accept half that and be happy. Autoworkers have agreed to wage give-backs and benefit cuts over the last years. They pledged even deeper cuts in relation to the agreement. But their sacrifices weren't great enough nor the cuts fast enough for Corker and the Republicans.

Now imagine telling a family that lives on from $50,000 to $60,000 a year that they will make one-half that in six months. They've got mortgages, kids in school and credit-card debts just like the rest of us. Outside of the Wall Street bankers who the administration has succored without asking them to slash their wages in half, how many Americans could survive a cut of half their paycheck in a few months, without going bankrupt? How many senators who pay themselves six-figure incomes with lavish pensions and health care could manage an immediate 50 percent reduction in their salaries? (Most of them, come to think of it, since the Senate is a millionaires' club).

Forget about the deepening recession. The Senate Republican position was essentially that the price of bailing out GM and Chrysler was to insure that the union was broken and the workers went bankrupt. It was, of all people, Vice President Dick Cheney who reportedly warned the Republican caucus that failure to pass the bill would lead to an even worse economic downturn, that it would be "Herbert Hoover time" if the bill didn't pass.

And after the Republicans torpedoed the bill, the Asian and European stock markets plummeted, with Wall Street about to follow.

There are defining moments in politics. Here Republicans defined themselves. They are not free-market conservatives, for they were willing to do the bailout. They don't object to nationalizing the banks or micromanaging the auto industry on the fly. They are class warriors, willing to risk a worse global economic calamity in order to break a union and force workers into bankruptcy. "Herbert Hoover time." Let's not forget this last ignoble obstruction, committed just as the Senators went home for the holidays.

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Do we become a nation that…no longer has a path to middle class prosperity?

Editor's note: For all the bashing that Republicans in the U.S. Senate have received here in Michigan for their vote against the auto bridge loans to Detroit's Big Three, one Michigan House Republican, Thaddeus McCotter, has provided some eloquent support. Following is the text of a speech by McCotter last month to the U.S. House Financial Services Committee.

I come from Michigan's 11th District. My district borders Detroit. Heavy automotive industry. Lot of dealers, lot of suppliers, lot of white collar, lot of blue-collar employees.

One of the first things I would like to make clear that I personally find offensive is the implication that the domestic American auto industry has not done anything since the 1970s to restructure.

If anyone believes that the Big Three were not restructuring prior to the credit crisis bringing them here today, or the CAFE mandates that have brought them here today, I invite you to my district.

I invite you to look at how the fragile fabric of people's lives has been rendered asunder by a necessary restructuring process that has involved give and take on both sides, from labor and management. I will show you the white-collar workers that are out of work. I will show you the blue-collar workers that are out of work. I will show you the pensioners that are worried about their health retirement benefits being lost. And I will show you the Wixom Assembly Plant that is closed.

I bring this up not for your pity for my constituents. I bring this up to show you that the automotive companies and the UAW have been doing what they believe they possibly can to restructure and become globally competitive and ensure that America has a domestic manufacturing base for the generations to come.

The second point I wish to bring up is why they're here. Throughout the entire process of the restructuring, we would hear rumors in Washington that the Big Three were coming for a federal assistance package, for one reason or another. And yet, as the white-collar workforce and the blue-collar workforce and the pensioners suffered the restructuring, they did not come. They did not come to Washington with their hands out. They were not here begging, as it has been pejoratively put in the press. They wanted to restructure, without us making it harder for them to do so.

Unfortunately, the first thing we did as Congress was we passed a $100 billion (Corporate Average Fuel Economy) CAFE-standard mandate on the auto industry, which would have been far worse had it not been for the strenuous efforts of the dean of the United States Congress, John Dingell.

Secondly, through no fault of their own, as they went through the restructuring process, the whiz kids on Wall Street, with their computer algorithms, decided to screw up the entire credit market of the United States. This was critical to the restructuring of the auto industry.

And then this Congress, in my opinion, passed a very bad piece of legislation, a $700 billion bailout of the very people on Wall Street who caused the problem. And now you see hundreds of billions of dollars slated to go to, quote-unquote, "healthy banks" to free up the credit system - that has yet to free up, or they would not be here today.

So the question that the chairman puts before us in terms of the legislation he is proposing is to me not a matter of a bad policy that has already been imposed on the American people and has yet to work. It becomes a question of equity.

If the $25 billion is appropriated for Wall Street - some of it probably targeted to healthy institutions, financial institutions, however nebulously defined - a no-vote on a bridge loan to the auto industry means that that $25 billion will continue to go to Wall Street and to healthy banks.

A yes vote means that it actually goes to Main Street, not just for the structure of the Big Three, the labor leaders, the auto leaders, but for the very hard-working men and people whose taxes have gone into the $700 billion bailout, which has yet to free up the credit markets.

So we are in the realm of equity here. And while I did not support that bad policy, we had here yesterday Secretary Paulson, who explained that he believed one of the fundamental problems that we face in stabilizing our financial system is the problem with home foreclosures.

I would agree with that. I would agree that the biggest problem we have are real working people's ability to pay to stay in the homes that they have.

If we turn our back on Main Street, if we continue to send all the money to Wall Street, who caused the problem, and the auto industry does have to go into bankruptcy, you will see foreclosure rates in this country skyrocket from people who have played by the rules and are currently paying their mortgages and are not part of the problem that Mr. Paulson says is already big enough to be worthy of addressing.

Finally, I want to address the issue of labor costs. I have long said that one of the problems Michigan suffers is the fact that we are currently still operating under the industrial welfare model of governance. And this is where the Big Three and the UAW get a very bad rap.

They talk about, quote, "shedding labor costs" that have been duly negotiated, because it makes them uncompetitive. My response to that is, where do those labor costs go?

The traditional model of governance throughout the 20th century of the United States, because we were an industrial power, was that business would pick up some of the benefits of employees and government would pick up some of the social needs of employees. And there was always the tension as to which would do what, but you had two pillars to help undergird American prosperity.

As we move into what people call the new global economy, the post-industrial economy, my question is this: If the business entities, in negotiation with labor entities, decide that they can no longer be competitive with these "labor costs," quote-unquote, where do those go?

They're going to go to the federal government. And so we have another instance where we can be penny wise and pound foolish, and we can say we're not sending a $25 billion loan to help the auto industry survive, and we can let real human beings go into the process of bankruptcy and watch the stresses and strains on their families as they endure that pain.

And you will not have saved the American taxpayers anything, because the pension costs will be picked up somewhere from the retirees who were cheated out of a lifetime of hard work.

You will see the health care costs of hard-working people that they have enjoyed because of the fruit of their labor put into the federal system. And you will see prosperity throughout the Midwest and the rest of the country crash and you won't have enough worker retraining money to take care of their needs.

And finally, for some of my more conservative friends, I point this out: if America does not have a manufacturing base, a manufacturing base which some may think is not necessary in this new global world, the United States will cease to be able to defend itself. We will be reliant on other nations for the innovative technologies, not only their creation but their provision, from friendly nations such as communist China and others, and the arsenal of democracy in our lifetime will have been dismantled in a time of war.

In the end, this issue is even larger than the Big Three, in many ways larger than the economy. It is what type of nation do we become. Do we become a nation that no longer produces wealth, that no longer has a path to middle class prosperity? Do we remain the America we inherited? Or do we just let it go and watch real people suffer in the process?

And my answer is no.

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Delta Dental's HQ becomes bigger, greener with expansion

By Marty Mulcahy
Managing Editor

OKEMOS - Smile. An $85 million expansion of the Delta Dental headquarters is moving along nicely.

In its 51st year of business, the dental benefits provider is bursting at the seams in its existing headquarters building, which was erected in 1979. The expansion project will include a major renovation of the Delta Dental headquarters building, construction of a new 92,000 square-foot office building, as well as a new data center.

"We've had many years of success in this building, and our employees have been packed in here for some time," said Charles Floyd, executive vice president for Delta Dental. "We have people working in the basement, and in places that were never intended to be working areas for employees. We thought we would fix that by expanding."

Walbride-Aldinger is acting as construction manager on the all-union, multi-phased job, which began last summer. Approximately 50 Hardhats are currently working at the project, which is expected to ramp up to about 150 at peak employment. "We were looking for a Michigan-based contractor that's experienced with labor," Floyd said. "We give them high marks. They have been outstanding to work with, same with the building trades."

The most technical aspect of the project, ands the focus of much of the construction activity this month, is a new 20,000 square-foot data center being built at the far east end of the property. Currently located in the basement of Delta Dental's headquarters building, the new data center will be all about backups.

"It's really a complex building, unlike any other you're going to find around here," said Brian McCarthy, Delta Dental's manager of facilities and purchasing. The center will rely on electric power, then diesel generators and then batteries to back up the company's power supply and data. "The idea is to avoid that hard system crash," Floyd added.

The data center is off the beaten track on Delta Dental's 57-acre property at 4100 Okemos Rd. near I-96, which will provide more room for nature elsewhere. The expansion project will include a number of environmentally friendly aspects, including the addition of a large pond for stormwater collection and management, and the use of native Michigan species of trees and plants. The land will include walking trails for employees and the community.

A green roof on the expansion will minimize stormwater runoff and filter pollutants. Another part of the LEED (Leadership in Energy and Environmental Design) Certification sought by Delta Dental on the expansion includes other aspects, like the use of recycled materials, maximization of natural light, and the re-use of the headquarters building itself. Tearing down the building would have been less environmentally friendly.

The final portion of the expansion will include a renovation of the west side of the interior of the headquarters building, then the east side. "At that point, our challenge is to keep our business operating while playing musical chairs," Floyd said.

When the project was announced a year ago, Gov. Jennifer Granholm, said "this expansion by Delta Dental of their headquarters sets in motion the company's growth in Michigan and sends a message to the world that Michigan is a great state to do business in the 21st century. We applaud Delta Dental for their 50 years of leadership and celebrate their commitment to Michigan."

Delta Dental of Michigan, with affiliates in Ohio, Indiana, and Tennessee, is one of the largest dental plan administrators in the nation.

AN ADDITION TO THE Delta Dental headquarters in Okemos is just coming out of the ground.

CLAMPING CONDUIT TO a wall inside the new Delta Dental data center is Jeff Sinclair of IBEW Local 665 and Swan Electric.



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MSU reels in $550M isotope beam facility

EAST LANSING- "This is a great day for science," said MSU President Lou Anna K. Simon. It was a pretty good day for Michigan State University and the building trades, too.

On Thursday, Dec. 11, the U.S. Department of Energy Office of Science today named Michigan State University as the site for the Facility for Rare Isotope Beams (FRIB). The facility is expected to cost $550 million.

"We are grateful to the Department of Energy's commitment to address this critical priority for the nation's physical sciences research infrastructure, and we are proud to have been selected as a partner," Simon added. "We are deeply dedicated to working with the Department of Energy's Office of Science to develop an exceptional user facility serving the needs of national and international scientists.

FRIB will build on the work done by MSU's National Superconducting Cyclotron Laboratory, which submitted the proposal to the Department of Energy. The selection of MSU was the result of a competitive, merit review process that utilized a panel of world-renowned experts from universities, national laboratories and federal agencies.

According to information provided by MSU, the new facility will provide intense beams of rare isotopes - short-lived atomic nuclei not normally found on Earth - that will enable researchers to address leading-edge questions in nuclear structure and nuclear astrophysics. Such questions include: What is the origin of the elements we find in nature? Why do stars sometimes explode? How can we better model atomic nuclei and their interactions? What combinations of neutrons and protons can make an atomic nucleus? What are the new applications of isotopes that can better diagnose and cure disease?

The heart of the new facility will be a high-intensity heavy-ion linear accelerator that will provide world-unique technical abilities. These will include the ability to conduct experiments with fast, stopped and re-accelerated beams, which will help users extend the reach of nuclear science. The university said FRIB "will establish world-leadership in rare-isotope science conducted in the United States in the future."

A statement by the Department of Energy said the new facility "will provide research opportunities for an international community of approximately 1000 university and laboratory scientists, postdoctoral associates, and graduate students."

MSU said conceptual design work for the facility will begin this year, with construction expecting to take about one decade. Congress still must approve money for the project.

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Dow Corning announces $1B expansion

HEMLOCK - Dow Corning's Hemlock Semiconductor Group announced Dec. 15 that it would invest up to $1 billion to expand polycrystalline production at its plant here, about 10 miles west of Saginaw. Construction will begin immediately.

Together with the announced construction of a new $1.2 billion plant in Clarksville, Tenn., the new capacity for Dow Corning will add up to 34,000 metric tons of polysilicon capacity, a key raw material used to manufacture solar cells and semiconductor devices.

Dow Corning said this is the third major expansion announced at the Michigan site in the last five years. In total, Hemlock Semiconductor Corp. has committed to invest as much as $2.5 billion at the site during this time frame. This latest expansion will add up to 13,000 metric tons of capacity to the site, while creating up to 300 permanent new jobs, as well as employing more than 800 construction workers during the construction. The Michigan expansion is expected to begin supplying polysilicon in 2011.

"This announcement offers solar industry leaders confidence that polysilicon supply will be available as the solar and electronics industries continue to grow and innovate," said Rick Doornbos, president and CEO of Hemlock Semiconductor Corp. "Michigan Gov. Jennifer Granholm, as well as many key state legislators and local government officials worked hard to make Michigan an attractive location for another Hemlock Semiconductor Corp. expansion," said Doornbos. "Hemlock, Michigan, has been our home since our inception more than 40 years ago. It reflects the commitment of our talented employees and the support of the region that we're able to make another large investment at the site."

In the end, the split decision for Dow Corning to move production capacity out of Michigan was another blow that was softened by the company's continuing investment in its Hemlock operations.

Granholm has strongly pushed Michigan as a hub for alternative energy companies, like solar. "This is going to be the sector that is the economic driver of our nation, and Michigan is poised to be at the forefront," she said.

Dow corning said most of the polysilicon produced by the new facilities will be consumed by firms in the solar industry. However, both sites will have the capability to manufacture ultra-pure silicon for the electronics industry as well as solar-grade material. In solar applications, polycrystalline silicon is the cornerstone material used to produce solar cells that harvest renewable energy from sunlight.

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Obama signals support for jobs proposal that any Hardhat would love

By Marty Mulcahy
Managing Editor

Road and bridge projects worked to put Americans to work during Franklin D. Roosevelt's New Deal program in the 1930s - can the concept can work again 70 years later?

President-elect Barack Obama indicated that he is on-board with the idea of stimulating the economy through a massive federal spending program to upgrade the nation's highway infrastructure, as well as undertake green projects like retrofitting homes and businesses with insulation, while encouraging the use of renewable energy.

The spending plan ranges from $600 billion to $850 billion - and the higher amount would rival (in adjusted dollars) what was spent on public works projects during the Great Depression.

"Yesterday," Obama said Dec. 6, "we received another painful reminder of the serious economic challenge our country is facing when we learned that 533,000 jobs were lost in November alone, the single worst month of job loss in over three decades. That puts the total number of jobs lost in this recession at nearly 2 million."

Obama continued: "We need action - and action now. That is why I have asked my economic team to develop an economic recovery plan for both Wall Street and Main Street that will help save or create at least two and a half million jobs, while rebuilding our infrastructure, improving our schools, reducing our dependence on oil, and saving billions of dollars."

The president-elect's plans offers plenty for the building trades, and not just the road-building sector. Obama proposed:

Launching "a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work."

Second, he said. "we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We'll invest your precious tax dollars in new and smarter ways, and we'll set a simple rule - use it or lose it. If a state doesn't act quickly to invest in roads and bridges in their communities, they'll lose the money."

Third, Obama said, "my economic recovery plan will launch the most sweeping effort to modernize and upgrade school buildings that this country has ever seen. We will repair broken schools, make them energy-efficient, and put new computers in our classrooms. Because to help our children compete in a 21st century economy, we need to send them to 21st century schools."

Obama said when Congress reconvenes in January, "I look forward to working with them to pass a plan immediately."

Detractors to using construction projects as the centerpiece for economic stimulus in the U.S. say road, bridge and other public works projects would take too long to develop and wouldn't provide a quick or effective bang for the buck.

That may have been the case in the past, but a report issued Dec. 5 by the American Association of State Highway and Transportation Officials said state highway departments have about $64 billion in building plans, ready to go within 90 days, after putting them off due to budget constraints.

"This survey shows that state DOTs are ready to quickly put the economic stimulus dollars and people to work," said John Horsley, AASHTO executive director. "Right now 41 states are facing budget shortfalls and many of our state departments of transportation have had no choice but to delay critical projects…."

According to the survey, Michigan has 208 "ready to go" highway projects that would cost $1.75 billion - ranking us No. 8 in the nation in dollar amounts.

To help move the construction spending process along, The Associated General Contractors of America on Dec. 11 launched a new national effort designed to show broad support for needed new infrastructure investments.

Stephen Sandherr, the association's chief executive officer, said the effort is necessary because more than 770,000 construction workers have lost their jobs over the past two years. "We want to build a foundation of support for new infrastructure investments that is as strong as it is necessary," said Sandherr.

He said that investing in new infrastructure would have significant, positive, long-term benefits for the U.S. economy. Cutting congestion, improving education and health care facilities, cleaning water supplies and improving levies will improve America's ability to compete globally. He added that the economic slowdown has led to declines in construction material prices, meaning taxpayers will get a better deal on investments made next year.

As part of the effort, the association has begun a new advertising campaign, new outreach to construction workers, their suppliers and business partners, and new efforts to build support from local and state officials.

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News Briefs

No action in '08 on toilet bill
LANSING - The legislative year ends with no action on House Bill 5064, a measure which would increase the number of portable toilets on construction sites, and require the nearby placement of hand sanitizers or washing stations.

The measure stalled last summer when lawmakers heard from business owners and associations, upset that more costs were being placed upon the business community. An effort by The Building Tradesman to get workers to lobby legislators to adopt the bill was insufficient to get the bill moving again.

"The homebuilders and to a lesser extent, the ABC (the anti-union Associated Builders and Contractors) came in and took the momentum out of it," said Todd Tennis of Capitol Services, a lobbyist for the IBEW and Mid-Michigan Construction Alliance. "We'll be around again next year. It's not like this issue is going away. There are still unsanitary conditions on work sites."

House Bill 5064 - Sanitary Facilities on Construction Sites - would have increased the quantity and quality of toilet facilities on construction sites. The bill would increase the number of toilets to one for every 10 workers. Current state regulations call for a minimum requirement of one toilet for a jobsite with 1-20 workers, two toilets for sites with 21-40 workers, and an additional toilet for each 40 workers after that. A higher ratio of toilets increases accessibility and means they're likely to remain cleaner, longer.

Downward trend for U.S. construction
New construction starts in November fell 3% from the previous month, according to a report released Dec. 18 by McGraw-Hill Construction.

Through the first eleven months of 2008, total construction on an unadjusted basis was reported at $509.9 billion, down 16% from the same period a year ago. Surprisingly, if residential building is excluded, new construction starts for the January-November period of 2008 were up a slight 1% over last year.

Residential building has retreated further, as the lengthy downturn for single-family housing continues. Nonresidential building lost additional momentum in November, while the nonbuilding construction sector (public works and electric utilities) registered a small gain.

"The pattern of construction activity continues to be shaped by the extended weakness for single family housing, which has not yet shown that it's close to reaching
bottom," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The steep correction for housing has been underway for three straight years now, and a fourth year of decline is anticipated for 2009."

Murray continued: "The current year has also seen emerging weakness for nonresidential building, which is expected to broaden in scope during 2009 given tight credit conditions and the tough economic climate. Public works has seen some erosion in the volume of construction starts during 2008, but the nonbuilding total has also been lifted by a surge of new power plants.

"The prospects for nonbuilding construction going into 2009 would appear to be the brightest of the three major sectors, given the potential boost to public works coming from the stimulus package that's likely to be enacted in late January or February."


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