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October 12, 2007

'Toot your horn' - consultant urges unions, contractors to improve marketing efforts

Trades bring their case to Miller-Canfield

The health care crisis '47 million of us cannot afford to get sick'

Bush vetoes health care expansion for children

DTE-Monroe partners latest to sign on for safety

News Briefs


'Toot your horn' - consultant urges unions, contractors to improve marketing efforts

By Marty Mulcahy
Managing Editor

PLAINWELL - The unionized construction industry would do well to develop a far-sighted "battle plan" for its future survival rather than relying on what has - or hasn't - worked in the past.

So said Scott Humrickhouse of FMI Management Consulting, who led a Sept. 26 conference sponsored by the West Michigan Construction Alliance, called "Think of it as market warfare, because it is."

This conference was another in a series of presentations held this year by various consultants in front of building trades industry representatives, who have called for unions and their contractors to adapt to the changing business world in the never-ending effort to improve their construction market share.

Humrickhouse's interactive discussion centered on how changing some business practices, especially in the area of marketing, could benefit union employees, union leaders and union contractors.

"Everybody wants increased market share," he said. "I see one of the solutions as creating new business partnerships."

Of course, part of that involves getting new customers. But also important, Humrickhouse pointed out, is allocating sufficient time to all-important existing customers.

"If we're consistent about providing good customer service, they're going to gravitate back to us," Humrickhouse said. "It's my experience that two-thirds of business, is repeat business."

And how can a business improve its chance of retaining the repeats? In the service industry, Humrickhouse suggests that managers require their service techs to devote the first five to seven minutes of any job to being friendly and talking to the customer. "Warm up the customer, talk about family, business, let them know that union workers know what's going on," he said.

When the service call or the construction project is complete, he said a company representative should check back with the customer and ask "how did my guys do?" He said if there's a problem with the work, the contact person at the customer who has been treated well will likely "stand up for you" when he or she has to explain the problem to person higher up in the organization.

"Improving customer service is the most important thing we can do, with the least effort, and we can start immediately," Humrickhouse said.

That kind of approach dovetails with a marketing term known as "positioning," a process that takes time. Organizations like unions and their contractors must choose where they want their customers to see them positioned in the marketplace.

"Can unions compete in a low price position or a high value position?" Humrickhouse asked. "More likely, it's in high value. If that's the case, you have to convince the customer that you're worth the extra one or two percent" in cost.

That moves into the next question: what constitutes high value for customers? If you answered "low bid," that's usually the case.

But high productivity is frequently cited by unions as a reason to hire union. Theoretically, a high-producing worker will save the owner money, but the problem for unions and their contractors, Humrickhouse said, is that with the concept of productivity, "we haven't been able to effectively compare it so that the owner can look at it and see that it saves him money."

Instead, Humrickhouse suggested that marketing efforts for union labor should be directed to industry-specific targets. Safety is becoming a huge factor for some owners conscious of insurance costs, especially at dangerous industrial jobs. School boards value a workforce that can complete buildings by the end of August.

Owners of commercial projects that are built on-the-fly would appreciate union skills that turn sketchy drawings for a building into workable reality. And all owners appreciate not having their bottom line expanded by the need to fix sloppy work.

"We have to relate what we bring to the table, to the owner," he said. "We have to explain to the owner what he gets when we provide these things."

Humrickhouse added: "When you talk to your people, beat this phrase to death: 'total cost.' We need to expand the perception of cost to the owner" beyond the bottom line.

Union contractors, Humrickhouse said, do better when they pick their battles properly. He said in his experience, successful contractors win one out of three or four quality bids, rather than trying to hit a home run with 10 poorly planned bids.

The same applies to marketing. Focused union-contractor marketing efforts need to zero in on owners who might be receptive to what a union workforce brings to the table.

For example, one union business agent attending the conference described the difficulty of union contractors competing with two-or-three-man crews that build small commercial businesses in West Michigan. The small crews work cheaply - probably without liability insurance - they have an in with the owners, and they get the job done, even if the quality isn't quite there.

Humrickhouse said the challenges unions and their contractors face on those small jobs are similar to what they deal with on larger jobs that hire a low-cost nonunion workforce.

"Where there's no pain (for the owner), there's no change," he said. "Put yourself on their side of the fence. Until they have a problem, they won't change. Maybe if they have a problem, the door will crack open slightly.

"The key is to market to your strengths. Try not to miss projects where you have an opportunity to win the work."

Humrickhouse suggested that union contractors need to take a longer view of their business operations. Stop "jumping from one job to the next," he said, and start devoting resources to a long-term push to promote the company's benefits to owners likely to do the hiring.

Union contractors have great resumes of jobs performed on time and on budget, resulting in owners thrilled with the outcome - and who would be willing to tell the world about their experience. And union members who work for those contractors have skills to make those outcomes happen.

"There are thousands of people who are potential sellers for the industry," Humrickhouse said, whether it's in a public relations campaign, or on the job every day. "Toot your horn, and you can change perceptions."

Unions "have to convince the customer" that you're worth the extra cost, Scott Humrickhouse said.


Trades bring their case to Miller-Canfield

KALAMAZOO - The first public office building since the Reagan Administration is going up downtown, in the form of the 151,000 square-foot structure that will house law offices for Miller, Canfield, Paddock and Stone.

The six-story building is rising at a tight site at the corner of Rose and South streets. When the building opens early next year, the top two floors will be the working destination of 36 lawyers and 35 staffers.

"Remaining downtown, within easy access of clients, courts, many businesses and cultural institutions demonstrates Miller Canfield's commitment to the Kalamazoo area, and to the continued vitality of its downtown," said Thomas Linn, CEO of Miller Canfield. He said the building would allow the firm to bring its area lawyers into one facility.

Construction is being managed by the CSM Group. An update from the contractor said the construction process has "presented a number of interesting challenges." With traffic on two sides of the site and buildings on the other two, "the entire building had to be constructed essentially from within its own footprint, requiring a great deal of extra forethought and precise coordination," CSM noted.

In addition, construction of two levels of below-ground parking meant that deep pilings had to be sunk and earth retention walls created before it was backfilled with concrete against the other buildings. The job is moving along very quickly - the first concrete was being poured in March of 2007.

"Time has been a real factor on this job, and there's a little more pressure to meet the schedule," said Doug Hilton, a Plumbers and Pipe Fitters Local 357 member/foreman for piping contractor C.M. Mahoney. "But we have good quality guys and we're getting it done."

THE NEW MILLER-CANFIELD building at Rose and South streets in Kalamazoo is the first public office building constructed in the city since the 1980s.

READY TO RIG another pipe in the mechanical penthouse at the Miller Canfield building in Kalamazoo is Phil Barrett of Plumbers and Pipe Fitters Local 357, working for C.M. Mahoney.


The health care crisis '47 million of us cannot afford to get sick'

By John Sweeney
AFL-CIO President

Unions. Yes, we're the folks who brought you the weekend. And we're the folks whose collective bargaining has maintained upward pressure on wages and benefits for all workers - union members and nonmembers.

We're also the folks who fought for and helped win legislation that has brought out the best in America: civil rights laws, the 40-hour week, Medicare and Social Security, overtime pay, workplace safety, family and medical leave and more.

So it's painful to look around and see America isn't working the way it should. Dissatisfaction is growing with an economy that benefits the wealthy but leaves regular working people behind. One of the greatest economic burdens faced by working families today is the insane, out-of-control cost of health care.

One in four Americans say their family has had a problem paying for medical care during the past year. The cost of health care - rising far faster than workers' wages or inflation - is a major factor in housing problems and bankruptcies. In fact, every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.

Meanwhile, insurance and drug companies are making stunning profits. Health insurance CEOs averaged $8.7 million in 2006 compensation, and pharmaceutical company CEOs pulled down an average of $4.4 million.

The rest of us aren't faring so well. The annual premium for a family health plan has close to doubled since 2000 - from $6,351 to an astonishing $11,480. Soaring health coverage costs are crippling U.S. companies' ability to compete internationally. For example, health benefits accounted for an estimated $1,300 of the cost of a new car made by the Big Three in 2005.

As costs grow higher, fewer employers are providing health coverage for employees - and fewer workers are able to afford their share of the costs or to buy policies on their own. The outrageous price tags on insurance are driving increases in the number of people without coverage. The federal government just let us know that another 2.2 million people - including 600,000 more children - lost health insurance last year, meaning 47 million of us now cannot afford to get sick.

In the wealthiest, most powerful nation on earth, that is just not acceptable. In America, no one should go without health care.

The AFL-CIO turned Labor Day 2007 into the start of a drive to win quality health care for all in 2009. With 10 million members and nearly 3 million union retirees, we intend to make the 2008 elections a mandate on health care. The union families who made up a quarter of voters last year are going to mobilize as never before to elect a Congress and a president who will enact the kind of real health care reform America needs.

You don't have to look far to see that winning health care for all is going to be tough. President Bush has vetoed legislation that would extend health care to millions more children - now, that's cold! He's protecting insurance interests rather than children's health, saying this could be a dangerous first step toward health care for all.

He's right - getting this legislation passed and overriding a Bush veto is the first step.

This fall and throughout 2008, union members will be mobilizing in their workplaces, in their neighborhoods and in their communities to demand that candidates and elected officials at every level commit to work for working families.


Bush vetoes health care expansion for children

President Bush on Oct. 3 vetoed the State Children's Health Insurance Program (SCHIP) renewal bill.

Bush turned a political deaf ear to many leading Republican lawmakers who joined with nearly every Democrat in the House and Senate who voted to reauthorize the program and expand it by $35 billion.

About four million additional children would be eligible for health care coverage under the reauthorization - joining the 6.6 million already enrolled. Bush supports a $5 billion expansion of the program.

The president, the AFL-CIO said, disregarded the 81 percent of Democrats, 69 percent of independents and 61 percent of Republicans who told an ABC News-Washington Post poll they support the $35 billion increase in the bill so more children get health coverage.

"The president's decision to veto legislation that would provide health care to millions of children is nothing short of disgraceful," said AFL-CIO President John Sweeney. "The cost of health care is soaring out of control and wages for workers can't keep up. Our children need a lot more than rhetoric to grow into healthy and productive adults. If Bush really wants to show commitment to children's health, he should give them annual check-ups, vaccinations and regular contact with a pediatrician who knows and cares about them. He shouldn't just give them a press release."

Funding for the program expired Sept. 30, but Congress passed a continuing resolution to keep government agencies open that haven't had their appropriations bills approved and included money to fund SCHIP at current levels through Nov. 16.

It takes two-thirds of the Senate to override President Bush's veto, and the 67-29 vote is one "yes" vote more than necessary to approve the children's health bill. But the 265-159 House vote falls about 25 votes short of what is needed to override the veto. It was only the fourth veto of Bush's presidency, and one that some Republicans feared could carry steep risks for their party in next year's elections.

The president said the Democratic bill costs too much and that the law was originally intended to help the poor but would entice people now covered in the private sector to switch to government coverage. "The president remains someone who is committed to expanding SCHIP and wants to make sure that the neediest children are covered first," said White House press secretary Dana Perino.The AFL-CIO and affiliated unions, child welfare groups, health care providers, community, religious and civil rights groups plan to mobilize to find the needed House votes to override Bush's veto.

House Majority Leader Steny H. Hoyer of Maryland said the president's "incomprehensible veto of this bipartisan, fiscally responsible legislation... demonstrates a stunning lack of compassion for some of the most vulnerable members of our society."


DTE-Monroe partners latest to sign on for safety

MONROE - Construction workers performing the ongoing environmental upgrades at Detroit Edison's Monroe Power Plant are the latest beneficiaries of an enhanced jobsite safety program.

On Sept. 19, Detroit Edison, its construction contractors, building trades unions and two state agencies signed on to the "Monroe Power Plant Partnership Agreement," a commitment whose goal "is enhanced safety and health protection and zero injuries for workers on a major environmental controls project."

"At DTE Energy, we promote safety as a core value to others on and off the job," said Ron May, DTE Energy senior vice president. "We're committed to performing our jobs in the safest manner possible and we work together to continuously improve safety processes. It's gratifying to know that our partners in this project take safety as seriously as we do."

If this kind of agreement sounds familiar, it should. Similar safety sign-ins have been conducted in recent months with MIOSHA and various contractors and owners at the Metro Airport North Terminal project and at Troy Beaumont Hosptial.

Some of the safety requirements at the Monroe Power Plant include 100 percent fall protection over 6 feet, including steel erection and roof work; 100 percent eye protection; substance abuse testing; use of competent/qualified persons necessary under MIOSHA standards, and uniform disciplinary actions for employees. The goal: zero injuries.

The construction industry is one of the most hazardous industries in Michigan. Only about four percent of Michigan's workforce is employed in construction - however, construction fatalities account for more than 40 percent of all fatal workplace accidents.

"These kinds of partnerships are becoming increasingly common in Michigan, and we couldn't be happier about it," said Patrick Devlin, CEO of the Michigan Building and Construction Trades Council. "There is no better way that we can improve the on-the-job health of the state's construction workers than making these kinds of sustained commitments to safety."

In 2005, Detroit Edison launched the largest and most costly emissions-control construction project in the company's history. Detroit Edison projects it will spend almost $850 million by 2010 on equipment to reduce sulfur dioxide (SO2), nitrogen oxides (NOx), mercury and particulate emissions from their coal-fired power plants.

The bulk of this work is being done at the Monroe Power Plant, with installation of a third selective catalytic reduction (SCR) system to control NOx emissions and two flue gas desulphurization (FGD) systems to control SO2. When operated together, the SCRs and FGDs are expected to reduce mercury emissions by about 80 percent. Long term, Detroit Edison estimates their investment in emission control systems to total $2.4 billion through 2018.

"We applaud (DTE Energy's) commitment to send every worker home healthy and whole while providing clean air solutions to our great state," said Michigan Department of Labor and Economic Growth Director Keith W. Cooley.

Detroit Edison, Washington Group Midwest LLC, The Babcock & Wilcox Company, Hamon Custodis, Ideal Contracting, the Michigan Building and Construction Trades Council, the Michigan Department of Labor & Economic Growth (DLEG), and the Michigan Occupational Safety and Health Administration (MIOSHA), signed onto the partnership.

ONGOING EMISSIONS control work at the DTE Energy Monroe Power Plant.
Photo courtesy DTE Energy



News Briefs

NLRB OKs wider lawsuits vs. unions
WASHINGTON (PAI) - The Republican majority on the National Labor Relations Board pushed the door wide open for companies to file lawsuits against unions - no matter whether it's retaliatory or how little merit the lawsuits have.

In making its ruling on Sept. 29, the 3-2 NLRB vote overturned its own case history but was guided by a U.S. Supreme Court ruling.

The board's two dissenters, Democrats Wilma Liebman and Dennis Walsh, admitted the three-man Republican majority had to follow the High Court's orders, but said it went too far - the NLRB majority basically ruled that virtually any retaliatory lawsuit against unions is legal.

"In particular," Liebman and Walsh said, "the majority errs in categorically rejecting the options left open to the board" for finding at least some lawsuits unlawful.

The NLRB decision follows a far-fetched anti-trust case taken up by notoriously anti-union BE&K Construction against virtually every building trades union in the U.S. and in California.

The three-member NLRB majority said the "right of access to a court is too important to be called an unfair labor practice solely on the ground that what is sought in court is to enjoin employees from exercising a protected right," that is, the right to collectively bargain.

Non-residential work still strong
New construction starts in August climbed 6 percent, it was reported Sept. 27 by McGraw-Hill Construction.

The increase showed construction starts making only a partial rebound after July's 11% decline, helped by strengthening for nonresidential building and non-building construction (public works and electric utilities). At the same time, the downward trend for residential building continued.

Through the first eight months of 2007, total construction on an unadjusted basis came in at $424.9 billion, down 11% from the corresponding period of 2006.

But exclude residential building, and new construction starts in this year's January-August period were up 5% over last year.

"Through the first eight months of 2007, the construction start series has hovered around a level that is 7% to 8% below last year's average pace," stated Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction. "The downturn for residential building has shaped this year's pattern for overall construction activity, and with multifamily housing now joining single family housing in decline, the correction for residential building is still very much in progress.

"In contrast, nonresidential building and public works remain on track to register moderate growth for 2007 as a whole. The credit crunch is clearly having a negative impact on the residential sector right now, but to this point in 2007 it appears that nonresidential building has experienced only modest dampening."

Geographically, total construction in the January-August period of 2007 showed this pattern relative to last year - the West, down 15%; the Midwest, down 12%; the South Atlantic, down 10%; the Northeast, down 9%; and the South Central, down 6%.


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