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January 9, 2004

'If the economy picks up…'A familiar refrain to construction industry hoping for a better 2004

Auto show 2004 Trades light up Cobo Center

Overtime ban gets stay of execution, but prospects are poor

Scaffold safety: Don't let what goes up, come down

NEWS BRIEFS

 

'If the economy picks up…'A familiar refrain to construction industry hoping for a better 2004

By Marty Mulcahy
Editor

As the odometer flips into 2004, Michigan's construction industry seems to be settling into an unwelcome, stagnant pattern that exhibits an excess of "what-ifs" and a serious shortage of opportunities to put shovels in the ground.

Some geographical areas of the state are doing better than others. Within those areas, some trades are enjoying better employment than others, too. But our annual unscientific and completely informal sampling of construction activity around the state reveals only a few bright spots amid an overall trend of middling prospects for building.

Both nationwide and in the Midwest region, prognosticators have predicted gains in the construction industry of about 1 percent for 2004. That also sounds about right for Michigan - but it's not much of a gain when there are serious unemployment levels among numerous trades that could use a double-digit increase to clear the jobless bench.

That being said, following is a round-up of what's going on construction-wise in various regions of the Great Lakes State:

Ann Arbor - It would be nice if the rest of the state has what Washtenaw County has - a very good construction employment outlook. Amazingly, this area has had at least steady and sometimes spectacular construction levels for the last 13 years.

Currently, the University of Michigan alone is spending more than $1 billion on construction, with ongoing projects at Hill Auditorium ($33.5 million), the Palmer Drive project ($168 million), a U-M hospital outpatient building ($30 million), and a heart and vascular medical building ($190 million).

Toss in a new Hyundai world headquarters building going up in Superior Township ($50 million) remodeling work at the Pfizer headquarters and at St. Joseph's Hospital, and you have a lot of happy Hardhats.

"It's a great environment for work," said Ron House, business manager of Plumbers and Pipe Fitters Local 190 and president of the Washtenaw County Building Trades Council. "I know we probably have one of the busiest jurisdictions in the state. We had a good 2003 and we appear to be in great shape for 2004."

Battle Creek - "Right now we have about one-third of our available workforce out of work, and unless I get some surprise calls, I expect more of the same in 2004," said IBEW Local 445 Business Manager Steve Franklin. "It's been tough."

Franklin said only small projects are keeping Local 445 members working, with just a few moderate-size projects on the horizon. In the planning stages is a new control tower to serve the W.K. Kellogg Regional Airport and Battle Creek Air National Guard base, as well as a new building at Albion College.

"We battle the same nonunion competition that they do in Kalamazoo and Grand Rapids, and it's been very, very difficult for us," Franklin said. "It makes things even harder when there is effectively no prevailing wage enforcement in the state. When it comes to wages, it's a race to the bottom."

Detroit/Southeast Michigan - Every December, the area's construction outlook is detailed at the Detroit Economic Club in a speech by the chairman of the Associated General Contractors, Greater Detroit Chapter. This year's speech was given by William McCarthy, president of McCarthy and Smith.

"As we look at 2004," McCarthy said, "the news coming from Wall Street is that the economy is on a climb, and a return to some level of economic prosperity is only around the corner.

"But in the world of construction, our recovery typically comes after other sectors, such as automotive and retail, experience a boost in their fortunes and owners begin making decisions to expand their operations through the construction of new facilities or the renovation of old ones.

"But despite this lag, AGC contractors believe the outlook for the Southeast Michigan construction industry is one of opportunity. Our expectation for 2004 is this: activity will hold steady for the start of the year, and then see a solid increase as we move into spring and summer.

"While you won't see a skyline filled with cranes and all of the workers on the bench today being called back to job sites, you will see many of the talked-about projects for Detroit and the suburbs finally breaking ground."

Some of those projects include:

  • The new Federal Reserve Bank Building going up in Detroit's Eastern Market.
  • Marathon Petroleum will begin a $300 million overhaul of its Southwest Detroit refinery.
  • Housing, retail and entertainment venues are either underway or planned for the
    the Harbortown area into Macomb County along the Detroit River and Lake St. Clair, as well as hundreds of millions of dollars in projects for Detroit's Midtown district.

In the manufacturing market, McCarthy said "some analysts are predicting 2004 to be a better year for auto production. Ford, General Motors, Daimler/Chrysler and other firms are proceeding with caution, but there are solid signs that they, along with many Tier One suppliers, will move forward with plans to renovate or build structures."

Evidence of this is that Ford recently announced plans to spend $410 million to expand production at its plants in Wayne, construction of the $50 million Daimler-Chrysler engine plant in Dundee is underway, and the massive $2 billion renovation of the Ford Rouge facility continues.

In other areas, the $1 billion bond initiative passed by Michigan voters in 2002 will begin pumping $100 million each year for the next ten years into the hands of local leaders for badly needed water and sewer projects. State highway funding should come in at $1.3 billion in 2004 - the same level of spending as in 2003. Detroit has still spent only half of the $1.5 billion bond issue that voters passed in 1994 to improve the city's schools.

McCarthy said other projects "that we may see in 2004 that must first overcome political, legal and financial hurdles," include $1.2 billion in new banquet facilities and hotels rooms for the three casinos in Detroit, the $140 million renovation of the Book-Cadillac hotel, release of $875 million in bonds are expected to be on the market within the next few weeks to finance the new North Terminal for Metro Airport, as well as the expansion of Concourse B and the reconstruction of Concourse C at the Midfield Terminal.

"The outlook for construction is promising," McCarthy said. "There is plenty of optimism and opportunity for the future, as evidenced by the projects planned, underway or under consideration. But a continued improvement in the national economy, a continuation of low interest rates, and a return of confidence on the part of consumers will certainly help."

Grand Rapids/ Muskegon - "There's some work in the pipeline, but there probably isn't enough to give us full employment in 2004," said Plumbers and Pipe Fitters Local 174 Business Manager Kirk Stevenson. "It's an election year, and hopefully that means things will pick up a bit."

Some of the projects in the pipeline in Grand Rapids include a pair of apartment towers, work on a new Metro Hospital and a new medical office building. Local 174 has about 28 percent unemployment among its 700 active members.

Chuck Oyler, west-side business agent for Boilermakers Local 169, agreed that construction activity has experienced a downturn in the latter half of 2003.

"It's definitely slower now than it has been in the last five years," he said, "and I know the rest of the trades are slow right now, too."

The Covert powerhouse (see below) employed up to 180 boilermakers last spring, but that work is mostly drying up. Smaller jobs at Consumers Energy's J.H. Campbell plant north of Holland and the B.C. Cobb plant near Muskegon are also in store this year.

Kalamazoo - Building a $500 million power plant in your jurisdiction certainly has its advantages during an economic downturn. But all good things must come to an end.

Construction is winding down on the new 1,170-megawatt Covert Generating Plant, which has employed thousands of building trades workers from around Michigan and the nation. Work began on the project back in March 2001 in Covert Township, 28 miles west of Kalamazoo.

"Work was good for us throughout 2003 because of the Covert powerhouse project," said Kalamazoo IBEW Local 131 Business Manager Pat Klocke. "We had 300-plus people working out there, but now we're down to about 50. If it hadn't been for that project it would have been a terrible year for us."

Klocke said he expects a lower volume of work for 2004, with union contractors involved in "knock-down, drag-out fights" with nonunion contractors in the battle to win construction contracts.

Lansing - "It was a pretty good year for the insulators in 2003 in the Lansing area," said Craig Grigonis, business manager of Asbestos Workers Local 47. "As for 2004, that's going to depend on a few things."

One of those things is a planned $1 billion General Motors assembly plant in Delta Township, which has been delayed several times. Lansing Laborers Local 998 Business Manager Dale Brzezenski said his talks with GM have indicated that the plant will be constructed - "if the economy is decent." One definite project: GM will be breaking ground on a new Delta Township paint plant early in 2004.

Grigonis said work has been good on the Michigan State University campus, including a new astronomy building, the remodeling of a food storage building, and renovation work at Spartan Stadium is starting. Off-campus, the Lansing Board of Water and Light is sponsoring some significant projects at the Erickson station, a powerhouse, and maintenance work.

Lansing Community College's Michigan Technical Education Center/Technical Training Center ($43.7 million) was topped out in October by iron workers, and the nine-story, $51 million Boji office tower next to the Capitol Building downtown should be in full swing in 2004.

"For us, 2003 was down from 2002 which was down from 2001," said Brezenski. "But I think 2004 looks good for us, but that's only if the economy improves. And please point out, that's a big 'if'."

Saginaw/Bay City - "There are just a lot of small jobs out there," said Plumbers and Steam Fitters Local 85 Business Manager Kris Shangle, noting that about 40 percent of Local 85 is jobless. "It's a tough time for us."

The news isn't good in the Saginaw Bay area, where a planned shutdown at the Consumers Energy Karn-Weadock facility in Essexville this month has been scaled down to about 50 pipe trades workers and 27 electricians. Construction of a new engine line by the Gray Iron Foundry in Saginaw should help employment later in the year - but not much. There is also a new press facility being jointly constructed by the Saginaw and Bay City newspapers. Work at a new Doubletree hotel and convention center is ending in the next three months.

But there isn't much else going on.

"I don't anticipate anywhere near full employment," Shangle said. "I expect it will be another tough year in 2004."

Those sentiments were echoed by Tom Ryder of Bay City IBEW Local 692.

"It has just been devastating around here," he said, noting that more than one-third of Local 692's membership is on the bench. "The sad thing is, there's no place to journey to. The designation of journeyman doesn't mean much if there isn't anywhere in the country where you can go to work."

Traverse City - "It's dead," said IBEW Local 498 Business Manager Bernie Mailloux of the local construction economy. "Our contractors are just not hiring. We have 25 percent of our workforce out right now, and in my mind, that's pretty bad."

Mailloux said there are a number of members willing to travel, but places to work around the country are few and far between. "I'm sending one of the brothers to Waterloo, Iowa, but there's not much to go to, anywhere," he said.

Locally, there are few large-size projects on the drawing boards, and most Local 498 members are making a living performing service work. As for 2004, "I keep hearing in the news how it's supposed to be a banner year for our economy, but I just don't see it happening," Mailloux said.

Upper Peninsula - "I guess overall you could call 2003 a mediocre year for us," said Tony Retaskie, executive director of the Upper Peninsula Labor-Management Council. "We've certainly had our share of unemployment. As for 2004, there's nothing really big on the horizon, but we're hoping if the economy picks up we'll have more activity."

Mike Thibault, business manager of Iron Workers Local 8 and president of the U.P. Building Trades Council, said university work has "held up well for us," with ongoing improvement projects at Michigan Tech in Houghton, Lake Superior State in Sault Ste.Marie and Northern Michigan in Marquette.

A new $15 million border crossing station in the Soo is under way, and a new $30 million press for International Paper in Iron Mountain in 2004 should help employment in the U.P. Retaskie said two potential projects, a new rail yard in Marquette and a new emergency room at Marquette General Hospital, would also be a nice boost if building plans come to fruition.

Retaskie said two major industries in the Upper Peninsula, iron ore mining and paper manufacturing, have both been hit hard by other countries who have "dumped" cheap steel and paper products into the American marketplace, undercutting prices. Those cash-strapped industries don't have the money for construction upgrades.

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Auto show 2004 Trades light up Cobo Center

By Marty Mulcahy
Editor

Few construction jobs are as sought-after as those setting up Detroit's North American International Auto Show.

Cobo Center offers a climate-controlled environment during cold weather and interesting work. More than 1,500 men and women in the building trades descend on Cobo every year, transforming the 700,000-square-foot venue into a glittering showcase for the world's auto manufacturers to show their products.

"It's just a nice, friendly, clean, comfortable place to work during wintertime in Michigan," said IBEW Local 58 journeyman Jim Jones, who has worked on and off setting up the auto show at Cobo since 1966. "And putting on a show like this makes you proud when it's finished; it always looks great."

Scheduled to open Jan. 10, work on the auto show began back in September, as a portion of the hall was available to start setting up GM's display. Move-in for the show, which began in 1907, used to take four days. The show became international in scope in 1989, and this year about 700 vehicles will be displayed.

Equipment from more than 1,000 semi-trucks delivering 14 million pounds of freight are used to set up the show. Tradespeople will lay 75,000-plus yards of carpet and 12 miles of wire. The crafts working to set up the show are carpenters, electricians, iron workers, riggers, stagehands and teamsters.

"Work is down a bit this year because of the economy," said IBEW Local 58 steward Bob McIlhargey, who works for MSO Electric. "The displays have been downsized a little and they're not as elaborate. But there's still a lot of work."

WHEELING AROUND the General Motors display adjusting lighting are John Semerjian and Russell Sowers of IBEW Local 58 and MSO Electric, working at the North American International Auto Show at Cobo Center.

IRON GRATING for a car lift at the auto show is hefted by Iron Workers Local 25 members Kenneth Thuot, Matt "Smitty" Smith and Eric "Frosted" Frost.

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Overtime ban gets stay of execution, but prospects are poor

WASHINGTON (PAI)- President George W. Bush's plan to cut eight million U.S. workers from eligibility for overtime pay isn't quite a done deal, as we reported last month. But it's close.

Organized labor got a new chance to campaign against the measure when Senate Democratic Leader Thomas Daschle (D-S.D.) and Sen. Robert Byrd (D-W. Va.) on Dec. 9 used a procedural move to delay a voice vote and temporarily blocked a $373 billion spending measure that funds one-sixth of the government. That left the bill in limbo until Jan. 20, when Congress reconvenes from its recess.

Labor will use Congress' recess to resume and increase its campaign against the plan in the Senate. The House passed the bill on Dec. 8, then quit for the year.

The huge spending bill funds the Labor Department and numerous other agencies. However, it lacks a previously inserted provision, passed by both the GOP-run House and the GOP-run Senate, to keep workers eligible for overtime pay. President Bush has put a great deal of pressure on lawmakers to block workers' overtime eligibility.

The Bush Administration touted its plan as a major benefit to low-income workers earning less than $22,100 per year, who would have their rights to overtime spelled out. But the AFL-CIO has pointed out that most of those workers are already eligible for overtime pay.

Bush "wants to shelve the 40-hour work-week and deny workers extra income in uncertain economic times in order to please big business," AFL-CIO President John J. Sweeney said. "During the recess, workers will intensify their campaign to defeat the spending bill" by contacting lawmakers "and urging them to reconsider" the overtime issue, he added.

Under the Bush proposal, workers, including nonunion police officers, nurses, store supervisors and many others, would face unpredictable work schedules and reduced pay because of a loss of overtime and imposed comp time. Employers would get the last say on who is re-classified.

According to the labor-backed Economic Policy Institute, workers making more than $22,100 a year could be denied overtime pay under the proposed changes if they are simply reclassified as "professional," "administrative," or "executive" employees, exempt from federal overtime rules, as Bush's proposal would allow. Employers would also have the final say on imposing when, and if, employees would be forced to take comp time in lieu of overtime.

Workers who toil under a collective bargaining contract aren't at immediate risk of losing overtime pay - but many employers are expected to leap at the opportunity to impose comp time at their first opportunity.

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Scaffold safety: Don't let what goes up, come down

By Jerry Faber
Safety Director
AGC-SE Michigan

It is estimated that protecting workers from scaffold-related accidents would prevent 4,500 injuries and 50 deaths each year, according to the Occupational Safety and Health Administration (OSHA).

In a seven-year period, OSHA found that construction deficiencies caused about 28 percent of the scaffolding accidents that occurred on U.S. construction jobsites. These scaffolding deficiencies included using substandard components, omitting essential components, or failing to complete the assembly.

Of scaffolding fatalities reported in that same time period, 23 percent occurred as a result of construction deficiencies, 10 percent occurred due to a scaffold's structural failure, and 8 percent occurred during assembly and disassembly of the scaffolding.

Scaffolding cannot be erected, moved, dismantled, or altered except under the supervision of a competent person. The workers performing this function must receive special training and the workers performing on the scaffold must be trained as well. (Part 12, Rule 1209 and 1210 of the Michigan Occupational Safety and Health Construction Safety Standards)

Some of the common mistakes people make when erecting scaffolding are as follows:

  • Guard rail and toe board systems are not complete
  • Scaffolding is not secured properly or outriggers are not being used
  • Base plates and mud sills are not capable of supporting the load exposed on them
  • Work platforms are not completely decked
  • All frame connections are not being used
  • Proper access to the scaffold is missing
  • Scaffolding is not erected with the proper clearances from electrical lines
  • Manufacturers' recommendations are not followed

These are just a few of the key life-saving and injury-reducing steps to keep in mind. Properly trained people on properly erected scaffolding are the ways to prevent accidents.

 

A competent person is key to scaffold safety.

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NEWS BRIEFS

'Freedom Tower' planned for NYC
NEW YORK - The "Freedom Tower" has been chosen as the design to replace the World Trade Center towers in Manhattan, and if constructed, would be the tallest building in the world.

The $1.5 billion building is designed to rise 1,776 feet, symbolic of the year the United States declared its independence from Great Britain. A broadcast tower attached to the tower would bring the structure's height above 2,000 feet. The World Trade Center towers were 1,368 feet tall.

The tower's tapered and twisted shape is controversial, and critics have suggested it is the result of a collaboration and compromise between the two architects involved in the project. Still, the New York Times architecture critic said the design, "with some shrewd editing… could become one of the noblest skyscrapers ever realized in New York."

New York Gov. George Pataki wants to break ground on the structure by September, which coincides with the Republican National Convention.

The tower includes 2.6 million square feet of office space on approximately 60 floors.
Above the occupied spaces would be 1,500 feet of a lacy structure of tension cables that brace the building. Within the structure, wind harvesting turbines are proposed to provide 20 percent of the building's energy. Above that there is a 276-foot spire.

The building's designers said they were looking to highlight the "resiliency and spirit" of American democracy, while serving as a monument to the 2,752 people who died in the Sept. 11, 2001 attack which resulted in the collapse of the World Trade Center.

Renderings of the new building were released with views of the structure at a distance, reflecting the early stage of the design.

Labor seeks block on reporting rules
As expected, the AFL-CIO filed a lawsuit in federal court to block new Labor Department rules that place a higher bookkeeping load on unions when it comes to filing financial reports, the Construction Labor Report said.

The new regulations require unions with receipts of more than $250,000 to provide the federal government with detailed expenditure information.

The AFL-CIO's lawsuit claimed that the Labor Department's rules are "arbitrary and capricious" and exceed the department's authority. The federation and its member unions have also complained that there is little time to make the changes, and the costs associated with the new record-keeping rules are exorbitant. In addition, unions wonder why the same accounting requirements weren't instituted for corporations - especially in light of accounting scandals at companies like Enron and MCI WorldCom.

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