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January 30, 2009

2009 Construction Outlook: Michigan's forecast mostly calls for pain

State's construction fatalities remained relatively low in '08

Topped out C.S. Mott Hospital replacement 'right on schedule'

Stimulus plan for Michigan worth about $1.2 billion

Obama inaugural address begins 'task of remaking America'

News Briefs


2009 Construction Outlook: Michigan's forecast mostly calls for pain

By Marty Mulcahy
Managing Editor

"If you seek a pleasant peninsula, look around you."

Our state's motto applies to Lake Michigan sunsets and the view from the Grand Hotel's porch, but "pleasant" is not necessarily the word to describe prospects for construction in Michigan in 2009.

Our completely informal and unscientific survey of anticipated construction activity in 2009 around the Great Lake State finds just a few pockets of good news.

The Bay Area, including Bay City, Saginaw and Midland, will be booming for many trades, with decent work prospects for the southwest Michigan region.

And for one statewide local, Boilermakers 169, "it's not all doom and gloom," said Business Manager Tony Jacobs. Outages at power plants around the state should bring about "an above-average year for us," Jacobs said. "And if Severstal and Marathon (described below) get going this year, it could be a banner year."

But that's a highly exceptional scenario compared to most local construction unions. Flint Area Building Trades President Zane Walker reported that union reps in that area are "burning up the phone lines" looking for jobs in and out of state for members, usually to no avail. "Work across the country is scarce," said Upper Peninsula Construction Council Executive Director Tony Retaskie.

Michigan is hardly in a one-state recession. "Unfortunately, there's not a lot of work out there anywhere," said Patrick Devlin, chief elected officer of the Michigan Building and Construction Trades Council. As we reported in our last edition, work prospects around the country are dismal. According to an employer survey by the Associated General Contractors, nearly a third of the entire construction workforce in the U.S. may be laid-off in 2009. The AGC and many of our union contacts pinned their hopes on the incoming Obama Administration, and quick passage of a hoped-for stimulus package that might be a boon to construction and the rest of the economy.

Such a federal stimulus could change the outlook. Until then, here's what's going on…

Ann Arbor area - Hail, hail to Michigan.

In 2008 and 2009, more than ever, the University of Michigan is leading the way in construction employment in Washtenaw County.

"Work at the U of M has been the savior for the building trades," said Bryce Mitchell, business manager of Plumbers and Pipe Fitters Local 190. He said while Local 190 has been "slower than normal," other local unions would report "slow and disappointing" levels of work.

At the U of M, the replacement $754 million Mott Hospital, as we reported in our last issue, was topped out in late December. The expansion of the University of Michigan Football Stadium is ongoing, as is construction of an indoor practice facility for the school's baseball team. The new $74 million Kellogg Eye Center is approaching completion and the $175 million North Quad student residence project is moving along.

The construction boom on the U-M campus continues, but the list of projects is not as extensive as it was a few years ago.

Elsewhere in the region, a new patient tower at St. Joseph Mercy Hospital is getting started. On the Eastern Michigan University campus, construction of a new science building is expected to start this year. Two decent-sized rehabilitation projects will take place at Washtenaw Community College.

Significant projects are going on at the Ann Arbor School District - Mitchell said about $3 million in work is ongoing at "just about all their schools."

Overall, Mitchell said the mechanical trades "could have a half-way decent year," in the Ann Arbor region in 2009, "but overall it's going to be a slow year for everybody."

Bay City/ Saginaw/ Midland area - "We've been blessed with a lot of work, we're very thankful, said Plumbers and Steamfitters Local 85 Business Manager Robert Anderson. "We may have worked record man-hours in 2008, and we're looking at full employment with travelers in 2009."

There is a full complement of about 850 Local 85 plumbers and fitters at work in the Tri-City Region, plus another 350 travelers. Other trades in the region are enjoying high employment levels, too. Their primary work destinations are Dow Chemical, Dow Corning and Dow's Hemlock Semiconductor plants, which are undergoing about $1.8 billion in construction.

The Hemlock plant is undergoing a $1 billion expansion that will double its production of polycrystalline silicon, a material needed to produce solar cells.

Dow Corning is also building nearby manufacturing space for the production of high purity monosilane, a key specialty gas used to manufacture thin-film solar cells and LCDs.

The presence of Dow's solar panel material manufacturing helped attract a $55.2 million plant to be built by Evergreen Solar Inc. Expected to be built in Midland's Eastwick Industrial Park, the plant is set to manufacture wafer solar cells.

Other work on the horizon includes a new $20 million tower at Midland Hospital, and at least $10 million work at the Saginaw Army Reserve Center. Plus there's a major ongoing outage at the Consumers Energy Karn-Weadock plant. A $28 million College of Health & Human Services Building was approved last month for Saginaw Valley State University.

Looking a bit farther into the future, the Michigan's legislature's passage of a new utility law opened the door for new power plant construction. Consumers Energy is proposing to build a new 800-megawatt, coal-fired plant on the grounds of its Karn-Weadock facility, and is waiting on the state permitting process. The price tag is more than $2 billion. A 750-megawatt coal-fired plant for Midland was planned by L.S. Power Group and Dynergy Inc., but the $1.9 billion project may be delayed because of a split between the developers.

In Alma, the Great Lakes Energy Research Park is a multi-billion-dollar project centered around an Integrated Gasification Combined Cycle clean-coal power plant. The proposed location is the former Total Refinery site. The owner has announced their intention to start building this year.

To the north, near Rogers City, the Wolverine Power Cooperative is proposing to build a $1.2 billion, 600-megawatt coal-fired power plant, with tentative permission to burn petroleum coke - a waste product of the oil refinery process. The company needs Michigan Department of Environmental Quality permit before starting construction, and the community seems to support the project and jobs it would bring. A windmill farm may be part of the construction.

"If everything falls into place, the work outlook looks good for the next several years," Anderson said.

Detroit/Southeast Michigan - The construction economy is looking a lot better in the rear-view mirror than through the windshield.

"A lot of major projects were substantially completed toward the end of last year, and right now, I just don't see much light at the end of the tunnel," said Ed Coffey, Southeast Michigan business representative with the Michigan Building and Construction Trades Council. "Let's face it, we're in an economy that's heavily based on the Big 3 automakers, and we all know what's happened with them."

A short list of some of the major projects that were complete or substantially complete during 2008 include the new North Terminal at Metro Airport, the renovation of the Book-Cadillac and Fort-Shelby hotels, the Greektown Casino hotel, and in health care, Oakwood South Shore Hospital, Providence Park Hospital, and St. Joe-Pontiac.

Now, this economy has spawned a new category of construction: halted or delayed projects. The $350 million Bloomfield Park retail/residential project couldn't get additional capital, and came to a grinding halt in early November. Because of declining steel prices, in Dearborn, Severstal Steel put the kibosh on $1 billion in work, including the rebuilding of "B" Blast Furnace, a new coal mill and a new galvanizer.

Beaumont Hospital shelved a new critical care tower on its Royal Oak campus, and pushed back some work on the west side of its Troy Hospital.

Work continues at the Marathon Petroleum Co. refinery in Southwest Detroit, but the planned $1.9 billion Heavy Oil Upgrade Project has been extended from the original completion date in 2010. The latest from Marathon is that due to "current market conditions" (read: lower gasoline prices) the petroleum refiner is working on a new extended timeline and cost estimate.

There is work to be done. Ground is expected to be broken later this year for Oakland University's $61 million Human Health Building. The $279 million expansion of Detroit's Cobo Center is still in the works. In Marysville, a new high school in the $50 million range is anticipated. A new parking deck will be built at Port Huron Hospital.

A 72-day shutdown is scheduled to take place at DTE Energy's St. Clair Power Plant, starting Feb. 21.

Given the new federal microscope the UAW is under, there's now a negative new reality for the building trades. Coffey said UAW skilled trades workers may be more willing to take on more factory remodeling/upgrade work - as they're contractually allowed to do.

"The UAW is going to be reclaiming some of that work, and the building trades are basically going to be at their beck and call," Coffey said. "There's a major remodel job coming up at Livonia Transmission, and we may see the leading edge of this right there."

The Big 3 haven't stopped building, but they're down to a crawl. The work at Trenton Engine is nearly done. Construction work continues at the $730 million Marysville Axle Plant, which will be run by a partnership of Chrysler and a German firm. Beyond that project, GM announced at the Detroit auto show that it would build a $30 million advanced battery plant in Southeast Michigan, starting this year.

On the highways, the Ambassador Bridge Gateway Project - the largest single construction contract ever undertaken by the Michigan Department of Transportation - is expected to continue through this year.

The $230 million investment is expected to improve traffic flow at the Ambassador Bridge, and help drivers navigating the area freeway interchanges leading to I-75 and I-96 and Mexicantown. The I-75 freeway through southwest Detroit has been closed for nearly a year as part of the project.

Flint area - "Work is terrible," said Flint Area Building Trades President Zane Walker, a business agent with Iron Workers Local 25. "Man-hours are way down. We just had a building trades meeting and nearly every local is running 30 percent, minimum, unemployment."

The biggest project on the horizon is on hold: General Motors is conserving its cash and has halted construction of its new $349 million plant that would build engines for the plug-in hybrid Chevy Volt and compact Chevy Cruze. The red light was placed on the half-million square-foot project in December. Structural steel has been fabricated by Bristol Steel, but Walker said it's not going anywhere.

Walker said the employment situation will improve - just a little - when the warm weather comes around. Two middle schools are scheduled to go up in Lapeer following the passage of a $56 million bond issue. Some smaller projects will take place in the Davison School District.

A new parking deck will go up in downtown Flint. Work will ramp up on the $30 million renovation of the historic Durant Hotel. Constructed in 1920 and closed in 1973, the Flint hotel will be renovated into about 100 apartments. About $20 million in work will take place at Mott Community College.

"There's work here and there and in a lot of little strip malls - actually that work is pretty steady," Walker said. "But overall it's going to be tough through the winter."

Grand Rapids/Muskegon - Construction in 2008 "wasn't too bad" with some crafts "staying fairly busy" - before the bottom dropped out at the end of the year.

So said Mark Mangione, assistant business manager of West Michigan Plumbers, Pipe Fitters and Service Trades Local 174 and President of the West Michigan Building Trades Council. "It's going to be a slow year in 2009," he added. "Developers are having a problem getting money to build."

Mangione said health care, food service and upper education work were the major employers for West Michigan trades last year. Multi-million dollar projects like the $170 million Van Andel Institute and the $250 million Devos Children's Hospital will continue to employ Hardhats into this year.

This year some work will also continue on the $115 million Gerald Ford International Airport parking project, which includes a four-story, 4,900-space parking deck. There is also ongoing work to erect new fieldhouses at Calvin College and Grand Valley State University. A new culinary arts school at Baker College has been enclosed for the winter.

The K-12 education construction outlook is slow right now, "but we could see a significant amount of work in that area based on the bond issues we're seeing," Mangione said. Also to come in 2009: the Meridian Project, an all-union 10-story apartment/mixed use building in downtown Grand Rapids, and a 10-story, $10 million Cambria Suites hotel near the Van Andel Arena.

Consumers Energy is also planning an outage to begin Feb. 6 at Campbell Plant, Unit 2.

"There is going to be some work, but overall 2009 looks slow," Mangione said.

Lansing area - "Last year at this time we were cautiously optimistic about work opportunities going into 2008," said Scott Clark, business manager of IBEW Local 665. "We were disappointed; there was unprecedented unemployment in the area. Unfortunately 2009 is continuing in the same vein."

There are some "promising" projects that will go out for bids/and or start in the springtime, Clark said, but not enough to ease the unemployment situation in the building trades.

The second phase of Delta Dental's $85 million headquarters expansion will begin in earnest. The $49.8 million renovation of Brody Hall on the Michigan State campus will commence, as will the redevelopment of the 78-year-old Mary Mayo Hall dormitory. Addition work will continue on the Wharton Center for Performing Arts.

The Accident Fund Insurance Company of America will be further along in 2009 in the $180 million redevelopment of the former Ottawa Street powerhouse into the company's corporate headquarters. The headquarters will span 333,000 square feet, and include a connected 101,000-square-foot, four-story building. The two structures will be connected by a four-story atrium that would serve as the main entrance to the complex. Also included will be a 1,000-vehicle parking deck.

Plans are in place for a new Lansing Market Place, a $24 million to $30 million mix of retail, office and residential space.

Unfortunately, aside from those few big- and medium- ticket items other work prospects are slim in other areas like K-12 and health care construction.

A highly publicized $550 million Facility for Rare Isotope Beams (FRIB) facility that was awarded to Michigan State University will take three to four years before shovels are turned. The Lansing area may get a new coal-burning power plant, but that might be two years away.

"Some heavily touted projects have not come about," Clark said, "and people have to realize that those we've heard about recently, like the FRIB, are still two to four years away. It looks like 2009 doesn't appear to have the makings of a good year, hopefully things will be better rolling into 2010."

Monroe - For some trades it was a very good 2008. And it will be a very good first quarter of 2009 - then the bottom drops out.

Construction work has been plentiful thanks to projects at DTE Energy. A project to install pollution control scrubbers on Units 3 and 4 at the Monroe Power Plant started in late 2007, continued through 2008, and will wrap up this spring. As many as 200 pipe trades workers have been on the project through last summer, and about 100 are still on the job, said Ron Sweat, business manager of Plumbers and Pipe Fitters Local 671.

Starting on Feb. 7, an eight-week outage at the Monroe Power Plant will begin on Unit 1, primarily using boilermakers to replace water walls. Then a 33-day outage will start in May, with similar work being performed. Some preliminary work on Unit 1-2 scrubbers may take place later in the year.

The Fermi 2 plant will experience a 23-day refueling outage starting March 27.

"We had full employment for most of last year and into this year, and we still have some travelers on," Sweat said. "But we're looking at a lull after the spring. "There's not much school work, and commercial work is slow. "Our problem is that everything we have is going to wrap up at the same time, and later in the year, there's not much on the horizon."


Southwest Michigan - "It was a flat year in 2008, with some trades doing better than others," said Hugh Coward, president of the Southwest Michigan Building Trades Council. "In 2009, I would describe prospects as generally good in light of what's gone on in the financial markets and the economy."

The list of construction projects that are going on and are expected to take place during 2009 is fairly lengthy. The $300 million Firekeepers Casino, slated to open in August, is employing between 100 and 150 Hardhats.

Battle Creek Public Schools is spending about $119 million in bond money on new renovations. Bellevue Public Schools will spend $55 million in bond money on renovation work. Portage Schools will be spending $120 million to upgrade their schools through 2011.

A new $35 million juvenile home in Kalamazoo will be completed this year.

The Unisolar project is a $225 million plant to be constructed in Battle Creek - and that price tag could rise to $1 billion.

Kellogg's in Battle Creek will underwrite a new six-story, $30 million office building. A total of $86 million in revitalization work is expected to be constructed downtown in conjunction with that work, including the relocation of a YMCA.

Two outages are planned at the region's two nuclear power plants. Outages will commence at Consumers Energy's D.C. Cook plant and at its Palisades Plant beginning in March, with both lasting 30-45 days. There is also ongoing turbine repair work at the Cook plant. The $80 million renovation of an old GM stamping plant at the Midlink Business Park in Kalamazoo into a Kaiser Aluminum casting and extrusion facility began in October, but is on hold.

Other projects are less certain. Redevelopment of a major Parchment paper mill has been on and off. The latest version of the proposal calls for $100 million in redevelopment into new housing and retail. A planned new terminal at the Kalamazoo/Battle Creek International Airport, with a price tag of $31.5 million, is awaiting financing.

The City of Holland has applied to the state to build a $250 million, 78-megawatt coal-fired boiler at the James De Young Plant, replacing an aging boiler. The proposed $225 million Gun Lake Casino in Wayland is tied up in the courts.

"I'm optimistic," said Coward, who is also business manager of Iron Workers Local 340, "especially if Obama is able to shake loose the stimulus money. It's not all doom and gloom, by far."

Traverse City/NW Lower Peninsula - Last year started well, with the construction of the $80 million Turtle Creek Casino and hotel in Williamsburg winding down, said Jeff Bush, business manager of IBEW Local 498. About 300 building trades workers were on the site last January.

Fast forward 12 months, that job is long completed and employment in the region is down significantly. "Last year was a pretty good year, not super," Bush said. "This year we're slow in the residential market, slow in the service, and we have about a third to half of our members off. We don't have very good prospects for 2009."

Bush said there are some relatively small projects in the works, such as a patient room remodeling project at Munson Hospital, work at a Wal Mart in Traverse City and some wrap up work at the Blue Lake Gas Compressor Station.

"There are a few jobs out there, but everything just depends on whether those purse strings start to loosen up," Bush said.

Upper Peninsula - Construction man-hours have been dropping in recent years in the U.P., and 2009 is likely to see a continuation of that trend.

"We're hoping for the best, to get as many people working as possible," said Tony Retaskie, executive director of the U.P. Construction Council. "I wish we could just shut off the TVs and not listen to all the negative economic news, because it seems to have a snowball effect."

There are some jobs on the horizon. Mascoma Corp. has intentions of building a $250 million clean-burning, fuel-grade ethanol plant in Chippewa County, south of Sault Ste. Marie. The plant will use timber fiber to create cellulosic ethanol. State and federal funding is in place to help the project along.

Steel is going up this month at the new $37 million Mackinac Straits Hospital in St. Ignace. Iron County Community Hospital is undergoing a $17 million, 38,000 square-foot renovation/addition. New high schools will be erected in Houghton and Hancock. Hangar facilities at the former K.I. Sawyer Air Force Base in Marquette County are being upgraded for use in the winter.

If prices in the heavy metals market go back up, the Empire iron ore mine may start a planned $250 million pellet production plant. Lower nickel prices, lower demand and legal action have also slowed the process for the start of construction of the Kennecott Eagle Mine near Marquette. The $80 million rehabilitation of the Humboldt mill, which would work in conjunction with the Eagle Mine, also may or may not go this year.

Michigan Tech and Northern Michigan University both have requests in for funding projects, and NMU engineers are still studying a $55 million addition to the Ripley Heating Plant that would burn coal, wood chips and natural gas.

"It's going to be lean a lean year, but we're not destitute," Retaskie said. "But I sure would like to see more blueprints out there."


State's construction fatalities remained relatively low in '08

By Marty Mulcahy
Managing Editor

LANSING - Michigan's construction worker fatalities jumped in 2008, but remains at a historically low level compared to previous years.

There were 15 construction workers fatalities on the job in 2008, compared to 11 in 2007, which was a record low for deaths recorded by MIOSHA. In recent years in Michigan the single-year high was 37 construction fatalities in 1997, and the lows were 17 (both in 1995 and 2005).

"I think you probably have to look at lower work levels," said Patty Meyer, safety manager for the MIOSHA Construction Safety and Health Division, referring to the slower economy to help explain the relatively low fatality count. "A lot of it might be the lack of work in residential."

The leading causes of fatalities in 2008 were the usual suspects: falls (five); struck-by or crushed (four), and electrocution (three). "Fall protection continues to be our number one area of emphasis," Meyer said.

Meyer said this year, MIOSHA will begin to track the number of fatalities vs. the amount of employees and work going on in the field, in an attempt to statistically get a better handle on that ratio.

In addition, in a new program, MIOSHA's Construction Safety and Health Division is slowly going to roll out the Michigan Volunteer Protection Program for Construction. Already similarly used with employers in general industry in Michigan and in other states, the program will rely on partnerships with contractors that have a proven track record of safety. Employers that meet strict safety criteria and record-keeping will eventually be allowed to be exempt from safety inspections on certain jobs.

Meyer said the state will be "taking baby steps," on implementing this program, and said it's too early to talk about which contractors would be involved. (Although big general contractors like Barton-Malow, Walbridge and Skanska, among others, have been working closely with MIOSHA on top-flight safety programs on several projects in recent years).

On those projects, MIOSHA, owners, contractors and union representatives sign a pledge to work together on safety, moving away from traditional enforcement methods to collaborative agreements. She said one of the advantages for those chosen companies is they would able to use that status as a marketing tool. MIOSHA inspectors could then focus their energies on construction jobs and contractors more likely to have safety problems.

Those collaborative agreements and an improved safety culture on many Michigan job sites may have be reflected in injury and illness rates in construction. While 2008 numbers won't be available until much later this year, MIOSHA reports that from 2001 through 2007, the injury and illness rate in the construction industry dropped from 8.9 to 5.8 per 100 full-time workers - a 35 percent decrease. MIOSHA's goal has been to lower injury and illness rates by 20 percent.

Started in 1974, MIOSHA has saved construction workers' lives: In the 1960s, an average of 44 Michigan construction workers were killed on the job every year.


Trades putting a cap on Henry Ford hospital expansion

By Marty Mulcahy
Managing Editor

DETROIT - The expansion of Henry Ford Health System's main campus in the city's New Center is moving toward completion, capped off by the addition of two floors atop the West Pavilion.

Last month, construction manager George W. Auch and the building trades handed over the completed 45,000-square-foot sixth floor of the West Pavilion. Included are 40 new private rooms, which have patient-controlled lighting and temperature, as well as room for family members to stay overnight. The floor plan repeats on the other half of the project - the fifth floor - where the building trades are currently at work and are expected to finish this summer.

When their work is complete it will wrap up an unprecedented expansion of the hospital, which was designed by Albert Kahn, funded by Henry Ford, and completed in 1915.

"This investment represents the single-largest investment in renovation and expansion in the hospital's history," said Anthony Armada, president and CEO of Henry Ford Hospital and Health Network. "Our vision is to continue to renovate and update existing units to continue to meet the needs and expectations of our patients. This expansion provides for more flexibility in patient bed locations, allowing us to renovate existing units without impacting patient care."

The West Pavilion's first four floors were constructed about a decade ago. The structure was prepped for an eventual expansion - which started in 2007. Silence was golden during the construction process, and every effort has been made to minimize noise during and after construction, said Eric Wheatley, project manager for Henry Ford Health Systems Facilities Design and Construction. Soundproofing insulation was added, and kept in place on the existing roof. Stud walls included additional drywall. High-end acoustic ceiling tiles were installed.

The sound dampening aside, Wheatley said the overall process has been guided by the desire to "give patients more control over their environment," with remote controlled adjustable window blinds, adjustable lighting options, temperature controls, flat screen TVs with bedside speakers, and wireless Internet access.

The floor plans have been designed to optimize work space for health care providers, with work alcoves outside patient rooms to minimize distractions for patients. Rooms on the two new floors will be in close proximity to existing intensive care units, surgery, operating rooms and the emergency department.

George W. Auch Project Supt. Will Tselios said the project is down to employing about 30-35 Hardhats. "They've been doing great, it's been a very, very good project," he said. "It really has been," Wheatley added. "The quality of the work, the safety, everything."

The price tag on this portion of the expansion is $35 million, but it's part of a $310 million investment in the campus in recent years. Nearly $90 million has been spent in the last two years, including the expansion and renovation of the Emergency Department.

Some other expansion projects include construction of a $5 million clinical skill simulation center which allows health care professionals to practice their work on computers and mannequins; expansion of the existing operating rooms ($10 million); outpatient tower redevelopment ($33 million), and heating, cooling and electrician infrastructure work ($50 million).

"We're extremely pleased with the construction process," Wheatley said. "Everyone here has been very satisfied with the work being done. We're creating a very comfortable environment for our patients."

THE TOP TWO FLOORS of the West Pavilion at Detroit's Henry Ford Hospital were built in the last two years above the existing four-level wing. Construction manager George W. Auch, their subcontractors and the building trades completed the sixth floor last month and are currently working on the fifth floor. They're adding a total of 80 new private patient rooms.

THREADING A PIPE on the fifth floor is Bryan Henry of Sprinkler Fitters 704, working for Lawrence Green.

UNDER THE FINISH WORK, new patient rooms at the expanded Henry Ford Hospital will be packed with technology and mechanical infrastructure. Pulling wire to make it go are (l-r) Jeremiah Howell and Anthony Bolsley of IBEW Local 58 and Gillis Electric.


Stimulus plan for Michigan worth about $1.2 billion

President Barack Obama's $825 billion economic stimulus plan, still a work in progress in Congress, would net Michigan about $1.2 billion in immediate construction work, according to the Congressional Research Service.

The Michigan-specific information was released last week to various media outlets around the state. While hardly final - Congress has not voted on the stimulus - numbers in the package show Michigan would get about $875 million in road work, $121 million for "transit capital," and $250 million for water and sewer work.

The report also says Michigan would separately get about $1.4 billion for education in the bill, and a large portion of that would help the construction industry by paying for school repairs.

Other portions of the "American Recovery & Reinvestment Bill of 2009" would fund science facilities and research, educational programs, extend jobless benefits, increase the availability of food stamps, and provide some $275 billion in tax cuts.

There was also $54 billion mentioned in the package to fund the development of alternative energies, upgrade the nation's electrical transmission grid, and for "green" energy purposes, but the information was not state-specific.

Some Democrats have argued that not enough money is being earmarked for construction work or for purposes that would immediately put people to work. Some Republicans argue that the package is too large and there is not enough accountability in the spending.

The proposal reportedly would save or create 158,190 jobs in Michigan, although those numbers are very hard to quantify. The Detroit Free Press reported that Michigan's share of $1.2 billion would be more than all but nine states would get, which would make proportionally in line with the state's population rank.

Overall in the U.S., the proposed infrastructure and public building investments would create or support almost two million jobs throughout the entire economy in part because of the economic slowdown and massive construction layoffs that have occurred, George Mason University economist Stephen Fuller testified before Congress on Jan. 22.

Fuller, who made the arguments during Congressional testimony on behalf of the Associated General Contractors of America, noted that the current stimulus plan's proposed infrastructure investments would create or support more than 1.85 million new jobs between now and the end of 2010. He said that would include over 620,000 construction jobs, 300,000 jobs in supplying industries and 930,000 jobs throughout the broader economy.

"The sharp decline in construction employment and activity we have seen over the past two years mean that the sector has plenty of capacity to quickly take on new projects," Fuller told the House Committee on Transportation and Infrastructure. "Two years ago these kinds of investments might have trickled out the door, but in today's climate, they are going to flood out into the economy."

The report said "spin-off" work associated with the spending could bring about the creation of 600,000 new jobs. Manufacturing in particular would benefit from such an infrastructure stimulus, seeing an increase of 252,000 jobs nationally. Domestically sourcing all manufactured materials in the new infrastructure investment would increase manufacturing job creation by one-third, the study added.

Terry O'Sullivan, general president of the Laborers International Union, said the $825 billion is thinking too small. "Any step forward is progress, but this level of investment falls far short of needs and fails to fully take advantage of the opportunity to put America back to work building the essential and long-neglected basics of our country," he said.


Obama inaugural address begins 'task of remaking America'

By Mark Gruenberg
PAI Staff Writer

(PAI) - President Barack Obama's inaugural address praised the nation's workers, but also laid out stark challenges they - and the country - face as the Illinois Democrat became the nation's 44th chief executive.

And he also made it very clear he intends to end the ideological warfare of the last two decades - warfare that cost workers their rights, their income and, increasingly, their jobs under his predecessor, Republican George W. Bush.

Obama took the oath of office at 12:04 p.m., Jan. 20, before an estimated 1.8 million people stretching from the West Front of the Capitol all the way down the miles of the Mall in Washington to the Lincoln Memorial at its farthest end. Hundreds of thousands more lined Pennsylvania Avenue for his inaugural parade, which included 265 unionists and their own pro-worker float, driven by a Teamster.

"On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled out politics" in past years, stretching back through the Clinton administration, he said.

"In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path of the fainthearted, for those who prefer leisure over work or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated, but more often men and women obscure in their labor - who have carried us up the long, rugged path towards prosperity and freedom," he declared.

Obama made it clear in his address that his administration would try to serve those people, and not the rich and influential. And he warned cynics, whom he did not name, that their time has passed.

Not only did Obama again urge the Democratic-run 111th Congress to pass an $825 billion stimulus package to help stave off rising joblessness and state fiscal crises, among other things, but he also served notice that the rich will be regulated in favor of the greater good.

"The question we ask today is not whether government is too big or too small, but whether it works, whether it helps families find jobs at a decent wage, care they can afford and a retirement that is dignified. Where the answer is 'yes,' we intend to move forward. Where the answer is 'no,' programs will end," Obama stated.

As for the rich, the GOP's supposed "free-market" economy and the Wall Street denizens whose machinations have led to the second Bush recession - deeper and already, at 13 months, longer than the first - Obama had a stern warning.

"This crisis has reminded us that without a watchful eye, the market can spin out of control. The nation cannot prosper long when it favors only the prosperous," said the former community organizer who worked with out-of-jobs Steel Workers when the mills were shuttered on Chicago's South Side.

"The success of our economy has depended not just on the size of our gross domestic product, but on the reach of our prosperity, on the ability to extend opportunity to every willing heart, not out of charity, but because it is our surest route to the common good," he explained. Obama also said "greed and irresponsibility" caused the economic slump.

But Obama also summoned workers, and citizens, to sacrifice for the common good. Early in the speech, he warned the country would finally have to face some hard choices "and unpleasant decisions" in "the task of remaking America." He did not specify what they would be, but he previously said his administration would convene a task force to examine the future funding of the nation's large entitlement programs.

And late in the speech, he praised workers for being willing to sacrifice for the greater good: "It is a kindness to take in the stranger when the levees break," he said, as they did when Hurricane Katrina smashed New Orleans.

He also cited "the selflessness of workers who would rather cut their hours than see a friend lose their job" and "the firefighters' courage to storm a stairway filled with smoke" -- as New York Fire Fighters did during the Sept. 11, 2001 terrorist attacks -- along with "a parent's willingness to nurture a child that finally decides our fate." All workers can help rebuild and change the nation, the president declared.

Union leaders praised the address, and particularly Obama's new direction after eight years of Bush's rule. Change To Win Chair Anna Burger called his inauguration "the beginning of a new movement. Now we must work together to build on this victory to restore the economy, rebuild the middle class and renew the American Dream."

Steel Workers President Leo Gerard, who sat both at the Capitol just in front of Obama but also in the inaugural parade reviewing stand with the new president, was moved "to the verge of tears" for the honor he accepted on behalf of the nation's workers, he told his hometown paper in Sudbury, Ont. Obama is "a real human being who has a real set of values that really connects to ordinary folks," said Gerard. Obama "indicated the old economic order is going to be thrown aside for a new one and we want to be part of helping him to build that new one."


News Briefs

Construction dives 15% in 2008
Total U.S. construction starts dropped 15 percent to $542.8 billion in 2008, marking the second straight year of reduced contracting after a 7 percent fall in 2007.

But excluding the moribund residential market, new construction starts for 2008 were actually up a modest 2 percent compared to 2007.

"The pattern of construction starts revealed a downward trend over the course of 2008, as the extended slide for housing was joined by emerging weakness for commercial building and to a lesser extent public works," said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, in a report released Jan. 21. "At the same time, there were still several bright spots in 2008. These included more growth for educational buildings and healthcare facilities, plus large gains for manufacturing plants and electric power plants.

"For 2009, the depressed economy and troubled financial sector will lead to further declines for housing and commercial building, and a loss of momentum is also anticipated for the institutional and manufacturing structure types. "The eroding fiscal position of states and localities poses a constraint for public works, but this could be more than offset by the boost arising from the Obama Administration's stimulus package."

The two regions with the sharpest declines for total construction during 2008
were the South Atlantic, down 26 percent; and the West, down 25 percent. This was followed by the Midwest, down 12 percent; and the Northeast and South Central, each down 1 percent.

Bush's 'midnight rules' bite the dust
WASHINGTON (PAI) -To the delight of unions, among others, President Barack Obama used his first moments in the nation's highest office to make sure predecessor George W. Bush's "midnight rules" turned into pumpkins.

The first memo Obama approved said rules Bush promulgated in his final days would be suspended pending review for another 60 days, and those which have not yet been officially published would be yanked.

Among the Bush rules that Obama halted were a scheme to lengthen the number of hours truckers spend consecutively on the road, and a plan to make it harder for workers to show they've been exposed to toxic substances on the job.

They also include rules pushed by business to make it tougher for workers to take family and medical leave and to let their bosses demand workers' medical records.

Another Bush midnight brainstorm that Obama's action stopped would have added further onerous reporting requirements for local, state and national union officers.

The first reports under that rule are due this coming March.

The moves elated foes of the midnight rules, including the Teamsters. Withdrawal of Bush's midnight rules "was one of the recommendations on our transition document, so we're very excited about this," said AFL-CIO spokeswoman Alison Omens.


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