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March 5, 2004

Hard work, education under way to make prevailing wage prevail

Visteon Village offers new version of corporate headquarters

Legislation affecting asbestosis cases may do more harm than good

Bush's economic chief: Outsourcing U.S. jobs is 'probably a plus'

An economic theory only Mayor McCheese could love

With more Wolverine fans over the years, U-M Stadium has grown with the times


Hard work, education under way to make prevailing wage prevail

By Marty Mulcahy

In some counties, on federally funded building projects, the prevailing wage and benefit package for construction workers in various trades is $7.50 to $8 per hour.

You would figure those counties are somewhere in Mississippi, Alabama or elsewhere in the nonunion South or West. You would be wrong.

"Believe it or not, we've got counties in Michigan where $7.50 an hour is the prevailing wage," said Don Mustonen, a program manager with CSAT, the union-backed Construction Survey Action Team. "You look at those numbers, and you see why it's important that we get all the input we can in order to get this survey right."

The survey referenced by Mustonen is the largest prevailing wage review ever conducted here in Michigan by the U.S. Department of Labor. The DOL has performed prevailing wage surveys in the past, but they have been limited in scope, have not been updated, and often don't accurately reflect what today's building trades workers earn.

In 2002, the DOL announced its intention to perform a survey in order to update prevailing wage numbers in Michigan and other states. In January 2003, a statewide coalition of unions and their contractors got together with DOL reps in order to learn what the Labor Department needed to get better survey results, and to talk about what's was needed to be done to increase contractor participation in the survey.

What resulted over the last year is the hiring of 12 full-time CSAT staffers to process paperwork and promote the program. They have mailed more than 8,000 forms to union contractors around the state, requesting wage information for various building trades crafts for construction projects performed in 2003. Business agents have also approached contractors about filling out the forms.

"The first response that we got from the contractors was poor," said Mustonen, who is also a program coordinator for the Operating Engineers Local 324 Labor-Management Education Committee. "Everybody is busy, and this is not a mandatory thing. But it's been my experience that once we explain to contractors why we need the information, they usually do it."

Union contractors who choose not to participate are shooting themselves in the foot. On federally funded road and university projects, if an old prevailing wage rate is in place as the basis for bids, then nonunion contractors get an immediate advantage because they can pay their workers less. And the gap will widen through the years as union pay and benefit packages increase, but the prevailing wage remains the same.

Mustonen said a second round of mailings to contractors recently went out, and it's too soon to tell what the response will be.

The goal is to get as many forms as possible filled out and signed by contractors, with May as the cutoff date. Mustonen said CSAT improved on the federal forms to make them more user-friendly for contractors. After the contractors fill out wage information for the forms, the information is punched into a computer program in a format desired by the DOL.

Beyond the wage rates for the various job classifications, Wage Survey Form WD-10 requires contractors to provide the number of employees for a given project, the number of days they worked on the project, and breakdowns of health and welfare, pension and fringe benefits payments.

"We're trying to make things as easy as possible for the Labor Department," Mustonen said. He said at the rate the process is going on here and in other states, and with cuts in federal funding, "Michigan will be lucky" if another survey is taken eight years from now. As it stands, it may take up to two years from now for the prevailing wages that were collected from 2003 to be published and put into place.

The Davis-Bacon Prevailing Wage Act was enacted by Congress in 1931. According to the lawmakers who wrote the bill, Robert Bacon and James Davis, the law was enacted so that the federal government could protect itself from "fly-by-night" and cutthroat contractors who performed shoddy work and exploited low-skilled and "imported" workers.

Today, prevailing wage laws continue to protect against fly-by-night contractors who underpay their workers at the expense of local workers who have a stake in doing the job right. Now, aside from basic collective bargaining agreements, there is no other issue that will have as much of an impact on unionized construction workers' incomes than this prevailing wage survey.

The example of a $7.50-per hour wage is extreme in Michigan, but there are numerous examples in counties around the state where the prevailing wage on federally funded projects is at least 10 or 20 percent - or more - below the local union wage scale.

"Those numbers are embarrassing, they're frightening," said Mike Crawford, executive director of the National Electrical Contractors Association, Michigan Chapter. "How can you support a family and pay health insurance with those kinds of wages? That's why we have to support this effort.

"We go through all this effort to support prevailing wage in the legislative and judicial arenas, and it would be self-defeating not to support the prevailing wage survey."

The goals for unions is to make prevailing wage the union wage. And in order to make union wage scales "prevail," at least 51 percent of contractors in a jurisdiction who submit wage information to the DOL must pay the union scale.

Furthermore, if the collectively bargained pay and benefit rate is made the prevailing rate in a jurisdiction, then escalators aligned with union pay and benefit scale increases are built into the prevailing rate, which means the rates are automatically adjusted upward every year.


Visteon Village offers new version of corporate headquarters

By Marty Mulcahy

VAN BUREN TWP. - Here comes the neighborhood.

Visteon Corp., one of the world's largest automotive suppliers, has taken an unusual approach to the construction of its new world headquarters.

They're not erecting a traditional, imposing high-rise glass tower favored by many corporations. Instead, Visteon, general contractor Walbridge-Aldinger and the building trades are in the process of erecting a new campus of low-rise buildings on a sprawling 265-acre site in Van Buren Township. They're building an office village - Visteon Village - where about 4,000 employees will go to work every day.

"We're building mostly offices, conference rooms, a few labs, but no residential," said Walbridge-Aldinger Project Engineer Jerry Hubbard, who is working with the Walbridge Project Executive Bill Grubnau and Project Director Bill Lorelli. "It's pretty conventional construction, and it will be a nice place to work when we're finished."

Located east of I-275 and south of Ecorse Rd., Visteon Village is being built atop an old gravel quarry, and will consolidate employees who are currently located 15 in facilities in Southeast Michigan. The buildings will stand next to a 37-acre lake.

"We will gain by having essential customer and business activities co-located, and we are able to do it at less cost than we are spending on those activities today," said Mike Johnston, Visteon President and Chief Operating Officer. Visteon said its new digs, which are scheduled for occupation at the end of this year, will provide "employees, supplier partners and visitors… an energized atmosphere designed to encourage creativity, collaboration and innovation."

The headquarters complex will include about 870,000 square-feet of buildings - none of them higher than five stories - with a town center at the heart of the complex. There are nine buildings, all of them named with letters. The buildings' exteriors will be a mix of stone, brick and glass. The buildings will feature pitched roofs, dormers, chimneys and terraces. Space will be dedicated to customer meetings and events, with additional facilities for training, an employee cafeteria and product displays.

Office buildings and laboratories will be located on either side of "Main Street" where employees can gather for work and recreation. The lobby entrances to each of the buildings face Main Street, which will include trees, sidewalks, benches and outdoor meeting places for employees. Each Visteon customer will have a confidential area within the campus dedicated to developing systems and technologies.

"We were excited by the challenge of creating a village that combined the community feel of a Michigan small town along with facilitating the workflow and processes of a global organization," said David King, chairman, SmithGroup, architect/engineer for Visteon Village.

Visteon said its new employees, supplier partners and visitors "will experience an energized atmosphere designed to encourage creativity, collaboration and innovation."

There are about 570 building trades workers on the project, a number which should remain steady over the next few months. Visteon employees are expected to be moving into their new digs at the end of this year.

DOWN ON 'MAIN STREET' at Visteon Village, Bill Ritchie and Chris Doty of Sheet Metal Workers Local 80 and Crown Core install galvanized flashing around a door opening.

VISTEON VILLAGE is being constructed by the building trades and Walbridge-Aldinger in Van Buren Township atop an old gravel quarry and next to a 37-acre lake.


Legislation affecting asbestosis cases may do more harm than good

Will Congress finally approve a reformed agenda for dealing with present and future asbestosis cases?

The issue over how to compensate asbestosis/mesothelioma victims - thousands of whom have worked in the construction industry - may finally be coming to a head by the end of this month, when Republican Senate Majority Leader Bill Frist has said he would put the matter to a vote.

Senate Bill 1125 would create a multi-billion trust fund for workers afflicted by exposure to asbestos, a carcinogen that has been banned as a building material. At this point, however, the creation of a fund seems to be one of the few concrete issues that have emerged from a cantankerous debate on the matter between Democrats and Republicans.

The dollar amount of the trust fund that would be created to pay victims is perhaps the largest bone of contention, but it's not the only one. Last October, according to the Construction Labor Report, Republicans proposed that the trust fund should be established at $105 billion, with another $10 billion available in contingency funding. The money would come from a trust fund from insurance companies and businesses that were involved with asbestos manufacture and distribution. About 70 of those businesses have gone bankrupt over the years.

Democrats have maintained that the Republican proposal provides insufficient compensation for asbestosis victims. Some lawyers have estimated that the costs of settling future asbestos lawsuits at $275 billion.

AFL-CIO President John Sweeney called the $105 billion amount "grossly inadequate."

"The terms of this agreement come nowhere close to covering the costs of expected disease claims," he said. "The proposal fails to state with any certainty that claims will be paid, and does not protect against the possibility that if funds run out sooner than anticipated, victims will be left without recourse both to the fund as well as to the tort system they will have left behind."

Michigan attorney Michael Serling, who specializes in asbestosis litigation, said he and most other attorneys who represent patients with work-related lung diseases would also give a thumbs down to the Republican plan.

"It's true, the dollars simply don't work," Serling said. "But there are other problems. The plan that (Republicans) are putting out there would create a bureaucratic nightmare."

He said recent or pending court settlements involving asbestosis could be voided, throwing plaintiffs into limbo. Instead of cases being handled by the courts, a new government bureaucracy would be created to decide who is sick and who isn't, and who gets paid damages, how much, and when.

While it takes a typical asbestosis case about two years to go through Michigan courts - which Serling said is a "pretty good" record for timeliness - the new plan could result in bureaucratic case backlogs of five to six years.

There are about 2,200 mesothelioma/asbestosis patients in Michigan, Serling said, which is a relatively small number compared to other states. About 50 percent of them worked in the construction industry.

Republicans control both houses of the federal government, and could have enough votes for passing the bill. But Sen. Orrin Hatch (R-Utah), the bill's sponsor, said he expects a Democratic filibuster when the matter comes to a vote. "I don't think it's going to break through until we bring it to a head," he told the Construction Labor Report.

Not surprisingly, the Wall Street Journal doesn't like the compromise-laden plan for its own reasons. "Gone were once-promised strict medical criteria to make sure plaintiffs didn't collect unless they were really injured. Gone also was any guarantee against trial lawyers continuing to shop the courts for jackpot jury verdicts for unsick clients…All Mr. Frist is doing here is opening up a federally-sponsored honey pot for trial lawyers and labor unions and calling it 'tort reform.' "

Serling said if there's a choice between the current system and the plan being pushed by the Congressional Republicans, asbestosis patients are better off if nothing changes.

"With all the protestations about the tort system, it has worked pretty well," he said. "The court dockets for these cases are moving."


Bush's economic chief: Outsourcing U.S. jobs is 'probably a plus'

Perhaps the defining issue in this year's presidential election is our nation's loss of manufacturing and other good-paying jobs that have taken place since the Bush Administration has been in office.

The nation has lost 2.2-2.4 million jobs since 2000, and Bush is almost certain to be the first president since the Great Depression to have a net loss of American jobs on his watch. During this election year, we expected him to "try a little tenderness" toward U.S. workers, but the hits just keep on coming.

On the heels of going out of his way to pass regulations substituting compensatory time off in place of overtime payments for eight million U.S. workers, Bush's Labor Department this year issued suggestions on how employers can get around paying workers overtime. Now, a top Bush advisor has publicly suggested that outsourcing U.S. jobs to overseas companies is "probably a plus" for the nation's economy.

Gregory Mankiw, chairman of the president's Council of Economic Advisers, said in a White House briefing on Bush's 2004 Economic Report that job outsourcing "is a growing phenomenon, but it's something that we should realize is probably a plus for the economy in the long run."

Leading Democrats pounced on Mankiw's comments. "Nearly every state in the nation has lost manufacturing jobs, and, contrary to the administration's economic theories, there is nothing good about it," said Senate Minority Leader Tom Daschle.

Added Sen. Edward Kennedy, (D-Mass.), "The president's economic report is an insult to every hard-working American. It's unpatriotic economics, and he should apologize for it."

Even Tom Donohue, U.S. Chamber of Commerce president and CEO, told CNN Mankiw's comments were "a pretty stupid delivery of a message in a political year."

Even in his statement "clarifying" his comments, Mankiw said the goal of U.S. economic policy should be "not to deny change but to help workers prepare for the global economy of the future."

"The irony in Mankiw's misstep," reported CBS News, "is that it came in the very same politically savvy report to Congress, the Economic Report of the President, in which he predicted the U.S. economy in 2004 would create an astonishingly optimistic number of jobs, 2.6 million, that would more than erase the estimated 2.2 million jobs that have been lost during the Bush administration's first three years."
Daschle called the report "Alice in Wonderland economics."


An economic theory only Mayor McCheese could love

Who knew that assembling a Whopper or a Big Mac may be just like building an automobile.

"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?"

That was the question that leaped out of the newly released Economic Report of the President, a book with comments, observations and statistics about the health of the U.S. economy. Gregory Mankiw, chairman of the president's Council of Economic Advisors, said that properly classifying burger flippers and other workers in the restaurant and hospitality sector is an "important consideration" in setting economic policy.

The New York Times pointed out that "counting jobs at McDonald's, Burger King and other fast-food enterprises alongside those at industrial companies like General Motors and Eastman Kodak might seem like a stretch, akin to classifying ketchup in school lunches as a vegetable, as was briefly the case in a 1981 federal regulatory proposal."

Others think that such worker reclassification is a blatant attempt by the Bush Administration to put up better numbers by reclassifying burger makers, thus making up for heavy job losses in the nation's manufacturing sector.

Michigan Congressman John Dingell sent Mankiw a sarcasm-laced letter on Feb. 20, responding to the president's report. The text of Dingell's letter follows:

Dear Dr. Mankiw:

I noticed in the recently released Economic Report of the President that there was some consternation in the defining of manufacturing. It could be inferred from your report that the administration is willing to recognize drink mixing, hamburger garnishing, french fry cooking, and milk shake mixing to be vital components of our manufacturing sector.

I am sure the 163,000 factory workers who have lost their jobs in Michigan will find it heartening to know that a world of opportunity awaits them in high growth manufacturing careers like spatula operator, napkin restocking, and lunch tray removal. I do have some questions of this new policy and I hope you will help me provide answers for my constituents:

Will federal student loans and Trade Adjustment Assistance grants be applied to tuition costs at Burger College?

Will the administration commit to allowing the Manufacturing Extension Partnership (MEP) to fund cutting-edge burger research such as new nugget ingredients or keeping the hot and cold sides of burgers separate until consumption?

Will special sauce now be counted as a durable good?

Do you want fries with that?

Finally, at a speech he gave in Michigan this past September, (U.S. Commerce Secretary) Don Evans announced the creation of a new Assistant Secretary for Manufacturing. While I understand that it takes a while to find the right candidate to fill these positions, I am concerned that five months after the announcement no assistant secretary has yet been named.

I do, however, know of a public official who would be perfect for the job. He has over 30 years of administrative and media experience, has a remarkable record of working with diverse constituencies, and is extraordinarily well qualified to understand this emerging manufacturing sector: the Hon. Mayor McCheese.

With every good wish,
John D. Dingell
Member of Congress


With more Wolverine fans over the years, U-M Stadium has grown with the times

ANN ARBOR - Renovated and expanded over the years, the University of Michigan Stadium today has one of the nation's largest seating capacities for football stadiums - but it could have been called "The Big House" even when it was opened in 1927.

U-M Regents approved a plan for the construction of the stadium in 1925. University planners said it should be designed with "the utmost simplicity" - and the design was eventually a big bowl that would seat 72,000. Fielding Yost, the U-M athletic director at the time, wisely pushed for a construction plan that would allow for the expansion of the stadium to seat up to 150,000 fans.

The stadium construction site utilized the natural slope of the farmland upon which it was built. Using steam shovels, trucks, and horses and wagons, 200 tradesmen removed as much as 2,000 cubic yards of dirt a day, digging down about 50 feet from the surface. However, excavation contractors ran into so much difficulty with an underground spring at the site that they had to raise the field by six feet. Legend had it that a steam shovel is still buried below the playing field, after it sank in the muck.

Construction workers poured 11,000 yards of cement and installed 440 tons of reinforcing iron. As the stadium was being completed in time for the 1927 season, 22 miles of redwood plank seats were installed. The total price tag for U-M stadium was $1.1 million.

There have been 35 million fans over the years who have watched the Wolverines play football at the "Field That Yost Built," and 170 consecutive crowds of more than 100,000 fans. Over the years, most recently in 1998, the stadium's seating capacity has been upped and is now at 107,501.
(Information/photos from the U-M Bentley Historical Library)

The new U-M Stadium in 1927.



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