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November 26, 2004

Labor looks to future, then looks at itself, following Bush win

Summit challenges unions: 'We've got to change our way of thinking'

New emergency/trauma center goes up at Marquette General

Employers slap lawsuits on retirees to slither out of health care obligations

Roofers follow pattern of quality with new slate roof

Good and hard

News Briefs

 

Labor looks to future, then looks at itself, following Bush win

"We have survived wars. We have survived recessions. But can we survive four more years of this?" - meaning another term for President Bush - asked AFL-CIO Executive Vice President Linda Chavez-Thompson in late 2003.

"Too horrible to think about," was how her boss, AFL-CIO President John J. Sweeney, termed the prospect of a second term for President Bush, before the election.

Well, he's baack. GOP President George W. Bush beat Democratic challenger John F. Kerry by a 51-48 percent margin. And a few weeks after the Nov. 2 election, organized labor has had an opportunity to digest the results, giving many labor leaders and members a case of indigestion - and some calling for a quick remedy by cleaning house at the AFL-CIO.

Unions reportedly invested more than $150 million on the Democratic presidential ticket for get-out-the-vote mobilizations and voter education efforts. The money helped raise awareness and improved organizations, but ultimately failed.

The next four years are "not going to be pretty" for organized labor, said Peter Dreier, a political science professor at Occidental College, to the Los Angeles Times. He added: "The day-to-day work of trying to build the labor movement is going to be made much harder now." Among a number of issues organized labor has to watch is how two openings on the National Labor Relations Board will be filled. A more conservative board could make it even more difficult for unions to organize new members, the Times said.

In past administrations, both Republican and Democratic, the AFL-CIO president has at least been able to talk to the Chief Executive. Not this time. Sweeney said after Bush became president four years ago, "we attempted to have a relationship, after the Supreme Court declared the election. Relationship? There was no relationship."

If Kerry got into office, unions would have looked forward to re-implementing union-only federal project labor agreements (which Bush outlawed) and providing some regulatory help to ailing multi-employer pension plans (which Bush refused to do), and repealing Bush's onerous bookkeeping rules which place a heavy financial burden on unions - but not private businesses.

Also on organized labor's pre-election agenda: a more liberal policy for releasing unemployment insurance money; a higher minimum wage; overturning Bush's policy which will take away overtime from some six million workers; taking another look at re-instituting worker-friendly ergonomic rules (which Bush repealed), and taking back OSHA to its historic role as a watchdog for workers rather than a lapdog for business interests.

But Kerry lost, and with the loss went organized labor's hope to have any of its agenda considered. Labor's Democratic allies never had much of a chance of winning a majority in either the House or the Senate.

A week after the election, the house of organized labor, with less than 13 million members under the umbrella of the AFL-CIO, started talking about how to get its house in order at a meeting of the federation's Executive Council.

"The labor movement was really shaken by the election and they're also badly divided," said Kate Bronfenbrenner, a labor relations professor at Cornell University, to the New York Times.

Changes - perhaps major changes - are forthcoming, but they won't be addressed until the council meets again early next year. The most notable recent news came from the AFL-CIO's largest affiliate, the Service Employees International Union.

"When only 13 percent of the American work force is in unions, our ability to win national elections is limited," said SEIU President Andrew Stern, in a letter distributed before the meeting.

Stern circulated a 10-point program calling for a massive overhaul of the AFL-CIO - and warned that his union might break away from the federation if changes aren't implemented.

His plan includes $2 billion for organizing - double the current amount, a $25 million campaign to unionize Wal-Mart, a campaign for universal health care (details unspecified) and greater top-down direction, including mergers. There are currently 60 AFL-CIO unions - including 14 in the building trades - and Stern called for greater consolidation of unions.

To throw fuel on the fire, AFL-CIO President John Sweeney's four-year term is up in July.

Stern ally John Wilhelm of the union that represents hotel workers, a possible rival of Sweeney's, said last week: "We have to do things much differently in the labor movement because of all the challenges that we face. Organized labor right now is obviously in trouble because we continue to decline as a percent of the work force."

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Summit challenges unions: 'We've got to change our way of thinking'

By Guy Snyder

EAST LANSING - What may have been the first Michigan Construction Industry Labor-Management Economic Summit was held Nov. 8 at Michigan State University's Wharton Center.

No punches were pulled in describing the decline in market share experienced by the state's organized construction industry. Nor were any gloves worn in presenting the changes it should consider in sculpting its recovery.

The day-long event was organized by the Mid-Michigan Construction Alliance, which includes unions and contractor associations. While emphasizing that skilled building trades still deliver the highest level of quality and productivity found in construction, speaker after speaker pointed out that some 25 years of complacency among unions and signatory contractors has resulted in a profound blindness to shifting market conditions.

Declaring "the policies of yesterday are no longer workable as solutions today," Tom Boensch, secretary-treasurer of the Michigan State Building & Construction Trades Council, opened the program. The expansion of the state's economy during the 1990s masked some of the changes organized construction presently needs to make.

However, stated Boensch, the slump of the last couple of years has led to the worst industry conditions seen in his entire 38-year long career. Clearly, innovative and productive solutions must be generated, as soon as possible.

Fortunately, institutional and educational construction remains strong for construction unions in Michigan, providing it with a base to work from. But industrial construction - one of its major traditional markets - has suffered a huge fall, especially as the trend toward exporting factories to developing countries intensifies.

Though commercial construction has seen periods of growth, its many project owners have been implementing new project management methods unfamiliar to unions and their signatory contractors.

Boensch cited a hotel company's use of project managers supervising several projects at a time from the seat of a pickup truck, assisted by a laptop computer and a cellular telephone. Though open shop contractors have been quick to adapt, unions have not responded well to such radically evolving project delivery methods. As a result too often they've been finding themselves shut out of the game.

"We've got to change our way of thinking," Boensch said, adding that this even must apply to the crafting of collective bargaining agreements. Traditionally, they've been written by lawyers.

"Collective bargaining agreements are based on an arcane model drawn from labor law, not economics," Boensch declared. "They have been tested by economics, but not driven by it." What's needed is a reflection of current market realities, with language that overcomes regional differences. This approach must be designed to enable signatory contractors to compete on a broad scale while still achieving organized labor's goals.

The changes advocated by the Construction Users Roundtable, which has been revising project delivery processes and creating new markets for the industry, need to be studied and assimilated within the union movement. Unions and signatory contractors also have to work together on joint marketing efforts, to create a universally recognized union brand that signifies both quality and best value.

None of this requires any surrender by unions, Boensch emphasized. "I'm not saying capitulate," Boensch told the union representatives present in the forum's audience. "I'm saying collaborate."

Professor Dale Belman of the Michigan State University Department of Labor and Industrial Relations reported that during the 1990s the overall construction industry saw real, inflation-adjusted growth of approximately 60%. That's the good news. Unfortunately, it was concentrated in the residential, educational, institutional, and commercial markets, where union construction has typically been weaker.

During the same period the industrial and manufacturing markets, where construction unions traditionally has thrived, actually declined in real terms. Today they represent only about 3.5% of the total market. Heavy construction, another union dominated sector, has also fallen, dropping from 15.6% in 1997 to just under 14% in 2001, according to the latest data available.

When economic recovery finally returns to Michigan, "manufacturing is not going to come back very strongly," Belman warned, "if it comes back at all." To regain a better share of the overall market, unions are forced to look elsewhere.

Observing that construction employment in Michigan peaked at around the 200,000 level in the year 2000, and currently is around 175,000, Belman reported that around 70,000 of its workers consists of self-employed, single employee contractors.

Because there are so many, he continued, they pose a problem to unionized construction. Often living a marginal existence, the self-employed tend to undercut themselves when trying to gain work. They offer their labor at rates far below their true market value, just in order to survive until sheer luck provides them with something better.

The question for the future, Belman asked, is should unions do something to organize these workers, thereby improving their working conditions, wages, and benefits in the process? Or should they be considered a threat similar to those posed by open shop contractors that use highly exploitative labor practices?

Mark Breslin, author of the book Survival of the Fittest, gave a highly engrossing presentation on how unions need to develop sound business models to brand and aggressively market the services their highly trained and experienced members provide.

He emphasized development and implementation of the plan must not only involve labor and management but the rank and file as well.

Working with the audience, Breslin quickly developed a list of 28 qualities ascribed to unionized construction - 28 economically sound values of importance to project owners. He contrasted them with a list of negative attributes that have been dumped on the labor movement in general.

Most of these slurs are outdated, totally inaccurate, and even mythical in nature. Then he pointed out that the difficulty in marketing union construction is that it has to successfully deal with both lists.

While it is relatively easy to prove unions provide excellent returns on a project owner's investment, in order to be even considered for work unions still have to overcome a bad reputation.

"The sins of the past are hanging around your neck, and the neck of your contractors, every day you go out in the market," Breslin observed.

To counter this, unions have to concentrate on abandoning old school, adversarial methods. To bust through stereotyping, they must focus instead on presenting well-reasoned, logical business plans that map out project owner benefits in a polished, professional manner.

They must also stop beating up on the competition, if just because it reinforces negativity. Besides, Breslin pointed out, there are good open shop contractors who could be organized if they were approached by union organizers in a similarly professional way.

As part of this effort, unions need to take a hard look at their members, all of whom play crucial roles. Those with poor work attitudes, who are unprofessional and tend to generate anti-union sentiments by their bad behavior on the job, need to be transformed by education. Failing that, they then must be encouraged to leave their trade.

Unions no longer can tolerate bad apples. Regaining market share requires commitment from everyone involved. In the rapidly evolving markets of today, the lazy and oppositional are too often seized and used as weapons by organized labor's enemies. Unions can't afford that.

Unions also need to have well-researched, solid answers. Project owners have to know if unions can provide them with a viable return on their investment in construction. If they can't, project owners will - and successfully have - gone elsewhere. Unions should be able to present so compelling a business case that project owners would never consider an alternative.

To do so requires marketing professionalism and discipline that are currently not present in most construction unions today.

Rounding out the forum were John Beck, associate director of MSU's Department of Labor & Industrial Relations, and Don Power, from the U.S. Federal Mediation & Conciliation Service.

Beck acknowledged the solutions offered by earlier speakers were good but their implementation and success heavily rests on sound partnerships between labor and management. These can't be created over night. Without commitment, mutual respect, and hard efforts from all involved, they remain fragile and can easily fail apart.

"What does a partnership mean?" he asked. "It's an intentional choice where everybody brings something to the party. It's a recognition that by working together, we can do things we can not do alone."

The time to do this, however, is now, Power emphasized. Not only in the past, but even today, organized construction industry will block itself from taking action to recover markets. All it takes is the misperception that "it won't happen here."

Among industry leaders who are close to retirement, that same negative attitude too often is coupled with belief that issues can be allowed to drift until younger leadership takes over. The problem with that is, as in other industries, what today seems to be secure defined benefit retirement programs have - down the road - too often been suddenly stripped away. (See the front page article on retiree health benefits).

Future retirees really shouldn't count on construction union pensions not being adversely affected by the continuation of market declines. Disaster really can happen here, and if the industry's team members remain complacent, they may end up sealing a very dire fate.

"You can change," Power told the audience. "You can make the transition. The only thing that's holding you back is that you haven't seriously thought about it."

(Mr. Snyder is editor of MichiganConstructionNews.com)

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New emergency/trauma center goes up at Marquette General

By Marty Mulcahy
Managing Editor

MARQUETTE - As of mid-November, there was no snow on the ground here and temperatures were in the mid-40s. It has been very good weather for building one of the U.P.'s largest ongoing projects, a new emergency department and trauma center at Marquette General Hospital.

"That's one of the pleasant surprises; we don't have a foot of snow on the ground," said Fred Gagnier, project manager for prime contractor Devere Construction. "We're trying to get 90,000 yards of concrete poured and then get the building enclosed before the weather hits. We're pushing the envelope, but we've been fortunate so far."

Devere, its subcontractors and the building trades are erecting a 60,000 square-foot addition, which will house a new 20,000-square-foot emergency department and trauma center, and 30,000 square-feet of space for future expansion and outpatient services. The $11.4 million addition is going up west of the hospital's existing eight-story patient building.

The addition will include 22 private and emergency trauma treatment rooms, a 24-hour walk-in clinic and monitored observation beds. The project started in July and is expected to wrap up in June 2005.

Marquette General Hospital CEO Bill Nemacheck said the new ED/Trauma Center will be a welcome addition to the Marquette campus.

"We're thrilled to be moving forward on this project," Nemacheck said. "The new ED/Trauma Center will provide a larger, more convenient facility for patients and provide faster service with greater privacy.

"One-third of our inpatients come through the emergency department, and it's essential to improve and enlarge the facility," Nemacheck added. "Care processes and technologies have changed significantly since the current facility was built, and we've seen substantial increases in the numbers of patients and severity of their injuries and illnesses."

The project is a significant first step in the development of the Upper Peninsula's only Level II Trauma Center. MGHS is currently seeking Level II Trauma Center status, the highest attainable ranking for a non-university-affiliated emergency center.

The existing Emergency Department space will tentatively be renovated and converted into a new MRI suite, but the hospital has not established a timetable for that part of the project.

Approximately 30 construction workers are on the projects - "and they're working hard, they're very good workers," Gagnier said.

THE BUILDING TRADES are building a 60,000-square-foot addition at Marquette General Hospital, the largest health-care provider in the Upper Peninsula.

IBEW MEMBERS Nick Gregorich, front, and Jim McClelland of Local 1070 and JP Electric install conduit at Marquette General Hospital expansion project.

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Employers slap lawsuits on retirees to slither out of health care obligations

Employers are now suing individual union retirees in an effort to lower their company's health care liability.

Until about a decade ago, health care benefits for both union and salaried retirees were considered a fairly rock solid guarantee. But in 1995, the legal gates were opened when GM began reducing benefits or increasing costs to employees not covered by a collective bargaining contract, and other companies followed suit.

Now, the Wall Street Journal reported in a front-page article on Nov. 10, "In the past two years, employers have sued union retirees across the country. In the suits, they ask judges to rule that no matter what labor contracts say, they have a right to change the benefits."

In order to get out from under costly health care obligations, the Journal said companies are now using "creative strategies" in front of the courts, arguing for instance, that "lifetime" health care coverage mentioned in a contract refers only to the life of the contract that was in place when the worker retired. In addition, employers refer to contractual clauses where they "reserve the right" to change benefits - and reduce them.

"There's absolutely no doubt that that there's been an increasing number of cases over the past three years," Richard Brean, associate general counsel of the United Steelworkers, told the newspaper. "And some have been successful," the Journal added.

Why are employers taking the proactive step of suing unsuspecting workers? The Journal said instead of just reducing retiree benefits and waiting to be slapped with a lawsuit, taking legal action first allows the company to start the fight on its own terms, in judicial jurisdictions that have a record of being favorable to employers over employees.

Often, at the same time as the company brings the lawsuits against some individual workers - who were often deemed troublemakers or were union activists - the company simultaneously announces it is reducing health care benefits for retirees.

And if the company loses the case - then they have lost only legal costs and they're back to paying for benefits as they normally would, without having to pay damages or penalties. If the company wins, they have a legal precedent for reducing benefits for all retirees.

"I have never liked to see contracts that allow employers to replace insurance carriers or change coverage as long as it is 'essentially' the same as the old coverage," said building trades attorney Doug Korney. "There's too much potential for employeers to make a change that is not acceptable to the workers."

Korney said multi-employer retirement plans that cover building trades retirees by their nature offer greater protection against such employer shenanigans - but groups of employers can still come to the same conclusion to reduce benefits.

"It's a sad commentary," Korney said. "Employers are looking to reduce costs wherever they can in today's economy - that's the rule, not the exception. Employees who think they're retiring with a steadfast agreement are outraged, and rightfully so."

Individual workers who are sued are left with poor choices - do they pay to hire a lawyer, accept the lesser benefits or just opt of the employer's health plan?

The Journal said union representation is often the workers' only recourse, and unions will fight for retirees. But a spokeswoman for the U.S. Labor Department told the Journal, retired workers "aren't our constituents any more."

Until GM pushed through changes in 1995 that reduced health care for salaried employees, most U.S. courts rejected employers' claims that "lifetime" retirement benefit coverage expires when contracts expire. But now, the Journal said, "some courts in the past decade have accepted these employer arguments. The federal circuits are split."

Korney suggested that union members be more careful who gets their vote.

"People get captivated by social issues when they vote, and that's fine," Korney said. "But the reason workers lose these rulings is because workers' candidates lose elections. Union members who vote for these anti-worker judges, or who vote for the president or a governor who appoint these kinds of judges, are finding that there's an unpleasant payback at the end of the day."

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Roofers follow pattern of quality with new slate roof

By Marty Mulcahy
Managing Editor

ANN ARBOR - In 1872, seven years after the Civil War ended and the year in which Ulysses S. Grant was re-elected president, roofers put a slate roof on the city's First Congregational Church.

This fall, Local 149 roofers from Detroit Cornice and Slate carefully removed that roof and replaced it with slate that will likely last another 132 years.

"It's a phenomenal roofing system; there's nothing like slate," said Detroit Cornice and Slate Supt. Kurt Hesse. "We brought down all the old slate to our yard, and we'll be able to use it to make repairs on other roofs. There's some spalling in the old slate, but the integrity is just great."

The old roof was leaking in a few areas and some of the iron nails that were used to hold the slate in place were failing, causing some slate pieces to loosen and fall. While the slate was still in very good condition, Hesse said the tar-paper underlayment had been reduced to "toast," especially on the southern exposure.

But there was "absolutely nothing wrong" with the one-by-six, tongue-and-groove wooden roof deck, Hesse said.

A crew of six roofers and sheet metal workers worked two months and installed 10,500 square-feet of the new slate with copper nails, as well as replacing copper downspouts, flashing, valleys and gutters.

"You can't knock a roof that's lasted more than 130 years," Hesse said, "but we put up a better roof than the original craftsmen. First of all we have better tools and the copper nails. But you could tell that some of the joints didn't quite line up, and some of the patterns were off by a couple of inches. Our guys did a good job."

ROOFERS Brian Boodan and Rob Dudley of Local 149 and Detroit Cornice and Slate work atop the First Congregational Church.

HERE'S AN AERIAL VIEW of the church, showing the old slate roof. The pattern was repeated with the new roof.

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Good and hard

By Marty Mulcahy
Managing Editor

If you weren't a little alarmed about our front-page report regarding employers suing innocent retirees in an effort to convince a judge to cancel the retirees' health benefits, you should be.

These are retirees who are otherwise minding their own business. Then they get a knock at the door from a process server who gives them papers and tells them they're being sued.

Not that the retirees did anything wrong. They only had the misfortune of working for a company that wants to get out from under the heavy weight of health care benefits that they have contractually provided to retirees - in some cases, for many decades.

There's little doubt that paid health care benefits for both American workers and retirees and is declining. Prescription co-pays are up. Few are the Americans who aren't paying more for doctor visits and surgical procedures. Health care charges are astronomical, and there's a national debate going on about how to reign in costs.

None of that is news. But the fact that a company would go to the trouble of filing a lawsuit in order to stop paying for benefits that it has historically provided retirees should scare the hell out of all of us. Will pension benefits be the next target?

In the wake of the scandals at Enron and other large corporations, and as we get used to the outsourcing of perfectly good U.S. jobs in the corporate pursuit of higher profits, will American workers stand by and let companies aggressively take away what little remains that separates our workers from those in the Third World?

Probably.

Here's why: few people know about the records of the judges they vote for, and fewer consider the fact that presidents and governors appoint judges to federal benches who reflect their own philosophies.

As the Wall Street Journal pointed out, the companies who are suing workers aren't stupid - the companies go "court shopping" and take their cases before judges who historically make corporate-friendly judgements. And some of the rulings have gone in favor of the companies.

These are the same type of conservative judges who have nearly completely taken away an injured workers' ability to win a workers compensation lawsuit in Michigan, and who ruled that Michigan's prevailing wage law was illegal (his ruling was later overturned).

And who puts those corporate-friendly judges on the bench? Republican governors, Republican presidents, and ultimately, the American voter.

Americans who don't look at the whole picture when they vote for candidates should consider a quote from H. L. Mencken: "Democracy is the theory that the common people know what they want and deserve to get it good and hard."

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News Briefs
Union agent Merriman dies

Jim Merriman, a business agent with the Greater Detroit Building Trades Council and Operating Engineers Local 324, died of cancer on Nov. 16, 2004. He was 77.

Jim's booming voice and occasional bursts of temper, together with a good sense of humor, an interest in history, and a deep, genuine concern for organized labor, made him a colorful character. An Operating Engineers Local 324 member since 1951, Jim served as a business agent with Local 324 and later as an agent with the Greater Detroit Building Trades Council until his retirement in the early 1990s.

Working for the building trades, he played a major role in opening the door for labor-management cooperation between construction unions and major companies like DTE Energy.

"Jim quieted down a little after he retired, but he never lost his passion," said Patrick Devlin, the council's secretary-treasurer. "Behind a gruff exterior he was a good man who cared about what he did, and there's no doubt he cared about organized labor."

Local 324 Business Manager John Hamilton said: "It was a privilege to have known him so well, and we will never forget his knowledge and strength. Jim was well respected by all of his friends in the construction industry and will be greatly missed."

First construction forecast: partly sunny
With the end of 2004 looming a little larger, what kind of prospects do 2005 hold for the U.S. construction industry?

The forecasts are starting to trickle in - and they're fairly positive. According to the Engineering News Record, "construction economists are proving an optimistic lot this year, judging by a review of several industry forecasts for 2005. Cheered by this year's robust growth rates, the strongest since the late 1990s, economists appear confident that 2005 will set a new record for overall construction volume."

While all that sounds positive, the news needs to be seasoned with a dose of reality for unionized construction trades. The "robust growth" for 2004 was primarily in the residential market - hardly a bastion for union workers.

However, some good news is that the construction sectors of "non-residential building" and public works are expected to improve in 2005. And some potentially great news is a predicted rebound in the industrial sector - an area dominated by building trades unions.

McGraw-Hill Construction is predicting a 14 percent increase in the industrial market, while the Portland Cement Association thinks there were be a whopping 53 percent rise in that sector.

These predictions are obviously wildly different, and past predictions have hardly been ironclad. McGraw-Hill Construction and the U.S. Department of Commerce both predict that construction activity will rise by 9 percent by the end of 2004, even though most predictions a year ago forecast only modest growth. The vehicle fueling much of the growth in 2004, said the ENR, is double-digit growth in single-family housing.

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