2006 Southern California Construction Union
Negotiations….How One L.A. Based Construction Association
has Probably Started a Construction Wage Inflation Spiral in
California!!!!!
By Jim
Ryan, AGC-SD Executive Vice President
Negotiations with the Building Trades Unions for the
construction industry have recently concluded in Southern
California. AGC-SD members were involved in three separate
negotiations this year….the Laborer’s Building Agreement…the
Cement Mason’s Building Agreement….and the Carpenter’s
Engineering Agreement.
The
negotiations with the Laborers and the Cement Masons
involved a representative committee of AGC members meeting
several times with the union representatives. The committee
for each negotiation included the chair,
Kevin Elliott of
Roel Construction,
Other members of the Committee were
Dan Fitzgerald,
Pacific Southwest
Structures;
Ron Hall,
McCarthy Building
Companies, Inc.; and
Larry Henderson,
JR Construction.
The Committee was staffed by
Jim Ryan AGC
Executive Vice President.
After
weeks of negotiations, this committee came to an agreement
with each union that is responsive to the market conditions
in this area. There was a great deal of discussion about a
number of issues. In the end, neither side accomplished
anything they set out to accomplish, but did reach fair
agreements. Wage settlements were in the 4% range,
including the increased contributions to the union fringe
funds.
This is the way the system is supposed to work.
The union has the responsibility to negotiate a responsible
agreement for their members…..management has the
responsibility to make sure the agreement will allow those
they represent continue to be competitive.
In addition, in California,
these negotiations often are the basis for establishing the
state’s prevailing wage in this area for the particular
craft. So the negotiations have a significant
affect on all contractors….not only those with union
agreements.
Bottom line with these negotiations….neither side felt like
they “won”…both sides felt like they should have done a
little better…..when those emotions exist at the conclusion
of labor negotiations….the system worked properly!!!
The
system did not work so well
in the negotiations for the Carpenter’s Engineering
Agreement. There were two basic reasons the
negotiation broke down and resulted in an agreement that, in
the opinion of many knowledgeable industry observers, will
ultimately hurt the industry.
What
happened? The agreement with the Carpenters expired not
only in San Diego County but also in the 11 Los Angeles area
counties. In the LA counties, there are several management
organizations that represent various groups of contractors.
These organizations sign one basic agreement that covers
both engineering and building work. In San Diego there are
separate carpenter’s agreements…one covers engineering
construction…..one covers building construction. AGCSD holds
the master agreements for carpenters in our area and is the
primary organization that negotiates the agreements.
In LA and in several other areas of the State, multiple
management organizations have developed.
Some represent builders…some underground….some engineering,
etc. In my opinion, this multiple representation creates a
terrible situation for management to responsively represent
the industry. For instance, in this negotiation, one
management association that represents primarily large
building contractors decided to start negotiations in front
of the other associations….about 8 weeks early.
Now in
Labor 101, all negotiators learn not to settle wages until
all language is settled….and as a rule, do not settle wages
until just before the expiration of the contract. There
seems to be the need for the “time pressure” of an expiring
agreement to exist before each side gets really serious
about the final wage settlement.
Well, as
we understand it, the CEO of the largest contractor in the
management association (not AGC), decided to meet one on one
“in the hallway” with head of the Southwest Regional Council
of Carpenters…the umbrella organization that represents the
Carpenters throughout much of the Southwestern U.S.
Remember, this meeting took
place about 8 weeks before the expiration of the contract.
The CEO must have approached the union official with a
question…..” What is it going to take to settle now?”….well
this type of question puts the union in a difficult
position….if you expose your “bottom line” 8 weeks
early….and management rejects your number….it is really
difficult to settle at the end of the negotiation for any
where close to the number you were trying to get
to…..management will work you down to a lower number over 8
weeks. So this union representative probably responded to
the CEO’s question with a much higher number…not wanting to
get into a trap.
Well, the CEO went back into the negotiation room and
announced that the proposed $2.25 per hour wage settlement
appeared to be the best deal possible and convinced this
association to settle for that amount….again 8 weeks prior
to expiration!!!!
Now
remember….most settlements have been coming in at around
3.5-4%...this settlement was about a 5.8% increase.
The union
probably had mixed emotions…..they are not in a position to
tell the Association…..now wait a minute …this is too
high….that would be political suicide…but my guess is that
they know the settlement is too high and will start a round
of wage inflation in the industry that will ultimately hurt
their members.
Remember….a high wage times 0 hours per week is not much of
a check!!!!
The
Carpenters went on to stand firm with all of the other
associations they were dealing with including AGC-SD and
forced the $2.25 settlement…..a settlement that is a mistake…..and
exits only because one management association did not take
their obligation to negotiate a responsible contract
seriously…..imagine…giving that kind of
settlement 8 weeks early….ridiculous….those
of you that are members of the association should be
ashamed!!!!
Fundraising to Support Infrastructure Investment – Over $6
Billion in State and Local Bond Sale Tax Issues on the
November Ballot
AGC-San
Diego’s PAC Fundraising Chair
Tom Anderson,
Bergelectric, is
proud to announce the successful conclusion of the first
phase of AGC’s 2006 PAC fundraising effort. The overall
goal is to raise $250,000 that will be contributed to the
numerous initiatives and bond measures on the November 7th
ballot. Selected candidates that support infrastructure
investment, including Governor Schwarzenegger, will also
receive contributions. The first phase involves 30 AGC
members contributing $5000 each. As of today,
30 contractors
have contributed the $5000.
We already
have reported to you that the $37 billion state
infrastructure package will be on the ballot. Props 1A-1E
are listed below, as well as some local measures that are
expected to be on the ballot (the figures are approximate at
this time):
Tri- City Healthcare District…..$596,000,000
Palomar
College…..$674,000,000
San Diego
Area Community College……$870,000,000
Sweetwater
Union High School…..$640,000,000
Carlsbad
Unified School District……$150,000,000
Santee
Elementary School District…..$60,000,000
City of Vista ½ cent Sales Tax……$6,000,000
per year for 30 years for public facility and service
improvements
Proposition 1B…….$19.9
Billion for Transportation
Proposition 1D……..$10.4
Billion for Schools
Proposition 1E…….$4.09
Billion for Levees
Proposition 1C…
$2.85 Billion for Housing
Proposition 1A…….Prop
42 Fix which directs approximately $1.5 Billion each year to
transportation from the state sales tax on gasoline.
So…over
$3.2 Billion in local bond and sales tax issues will be on
the ballot in November. It is expected that San Diego
County will receive up to $3 billion of the state
initiatives if passed…that
is a total of over $6 billion in local building and
transportation projects!
The votes
on all of these measures will be close. AGC is concerned
that a number of them will fail if the public entities are
not able to conduct a proper campaign…..the contributions
AGC will be able to present at the end of this fundraising
effort represents an important part of the fundraising goal
for each campaign.
Phase two
of AGC’s fundraising effort involves 100 AGC members
contributing $1000 each. AGC staff and PAC Fund members
will be contacting members to contribute to this phase
beginning this week.
Obviously,
these candidates, bond measures, sales tax increases, and
ballot initiatives are needed….the public’s investment in
the infrastructure has been a fraction of what it should
have been during the past twenty years.
City of San Diego Considers Compensation for Price
Adjustment Clause
There has
been pressure from many in the industry to compensate
contractors for unexpected spikes in commodity prices. The
argument for this type of clause is obvious when prices are
going up daily if not hourly. The argument against this
type of clause has its roots in Econ. 101 during your
freshman year in college….commodity prices will not always
head in one direction.
It is a
tough call….please forward your comments to Brad Barnum at
bbarnum@agcsd.org.
AGC Affiliate Day a Success!
By all
accounts, we trust that the attendees to the AGC 67th
Affiliate Day Golf Tournament had a good time last Monday.
We know Craig Hueners from Reno Contracting did! He was the
lucky winner of the Plasma TV donated by Trench Shoring
Company. With 323 golfers participating in the tournament
and 18 exhibitors who went all out this year, the day was a
huge success!
The AGC
Board of Directors would like to thank
Frank Gerberding,
from Active Graphix,
Inc. for once again chairing this event, along with the rest
of the Affiliate Day Committee listed below who assisted
with this huge undertaking in ensuring AGC members enjoy a
top quality tournament:
Steve Spellane
– ABD Insurance
Richard Anderson
– Acme Safety & Supply
Corp.
Rocky Qualin
– California Bank &
Trust
George Hillman
– CEMEX
Mandy Parent
– Data Net Solutions
Andy Grimm
– Day Wireless,
Steve Alexander
– DR McNatty &
Associates
Jim Sommerville
– Driver Alliant
Bob Vildibill
– EFCO Forms
Vonna Cousins
– EWA Software
Clint Hale
– Hale Engineering
Don McKillop
– Law Office of Don
McKillop
Kim Ufford
– Levitz, Zacks &
Ciceric
Al Haverkamp
– Lucas & Haverkamp
Bob Barker
– Miramar Truck Center
Steve Hertel
– National Construction
Rentals
Amy Dipinto
– Neal Electric
John Krogman
– Next Stage Software
Solutions
Allison Beall
– Pacific Building Group
Chris Mastrianni
– Polycomp
Administrative Services
Dennis Wilkes
– San Diego Precast
Concrete
Kyle King
– St. Paul Travelers
Mark Sjobom
– Traffic Control
Services
Devin Righter
– Trench Shoring Company
Lindsey Merek
– US Laboratories
Tom Cook & Nathan Bowen
– We’re Innovative
We are
also extremely grateful to our many sponsors who continually
support this event. The expense to put on a tournament of
this caliber is tremendous, and we honestly could not do it
without their generosity. We ask that all members recognize
their efforts.
The Major Sponsors
were
California Bank & Trust
and
Driver Alliant Insurance
Services.
The Tee
Prize Sponsor
was
Procopio, Cory,
Hargreaves & Savitch, LLP.
The Lunch
Sponsor
was
Marks, Golia & Finch, LLP
and the
Cool
Treats Sponsor was
Polycomp Administrative
Services.
In
addition, listed below are the names of the
Exhibitors,
the
Beverage Sponsors,
Hole
Sponsors
and the
Contest Sponsors.
Please remember their names and acknowledge their support.
COURSE
EXHIBITORS
o
Acme Safety & Supply
o
Active Graphix
o
Advance Reprographics
o
A.M. Ortega Construction, Inc.
o
Anderson Drilling
o
Bob Stall Chevrolet
o
Brewer Crane & Rigging
o
Cement Cutting
o
Enterprise Fleet Systems
o
Foundation Software
o
Hawthorne Machinery
o
iSqFt
o
Johnson, Barnes & Finch, Inc.
o
National Construction Rentals
o
NationsRent
o
Qualcomm, Inc.
o
United Rentals Trench Safety
o
Waste Management of San Diego
BEVERAGE
SPONSORS
o
ABD Insurance Services, Inc.
o
California Commercial Asphalt
o
D.A. Whitacre Construction, Inc.
o
Division 8, Inc.
o
EWA Software
o
Geotechnics, Inc.
o
John Burnham Insurance Services
o
Levitz, Zacks & Ciceric
o
Neal Electric
o
RCP Block & Brick
o
Safway Services, Inc.
o
Standard Drywall
o
TC Construction
o
Trauner Consulting Services, Inc.
o
Utility Vault Company
DRIVING
RANGE
o
San Diego Precast Concrete
TOTE BAG
o
Trench Shoring Company
HOLE SPONSORS
o
American Concrete Institute, San Diego
o
Bergelectric Corporation
o
Burch Construction
o
Dynalectric Company
o
First Regional Bank
o
Gilbane Building Company
o
Herzog Contracting Corp.
o
Jaynes Corporation
o
Neal Electric
o
RCP Block & Brick
o
R.J. Lanthier Co., Inc.
o
Roel Construction
o
SDC & Associates
o
Scheidel Contracting & Engineering
o
Sherwood Mechanical
o
Simplex Grinnell
o
St. Paul Travelers Bond
o
T.B. Penick & Sons
LONGEST DRIVE
o
Cavignac & Associates - Men
o
Willis Risk & Insurance Services - Men
o
Safecon Consulting - Women
o
Smart Safety Group - Women
STRAIGHTEST DRIVE
o
National Construction Rentals
o
We’re innovative
CLOSEST TO
THE PIN
o
CEMEX
o
Devenco, Inc.
o
Next Stage Software Solutions
o
Ninyo & Moore
o
Ortiz Corporation
o
Sundt Construction, Inc.
o
University mechanical
HOLE IN
ONE
o
ABD Insurance Services, Inc.
o
City Chevrolet
o
Reno Contracting, Inc.
EDUCATION:
Project Management the Certificate Course
Project
Management Class is still on schedule to begin September 7.
At present we have approximately 12 to 15 registered and 6
to 8 that have called to hold spots, so the class is filling
fast. Please send your registrations ATTN: Glen Schaffer
We have
had many testimonials come into the office, but the best one
to date was from one of the students from the blueprint
class asked, “Why would
you need to take the Project Management class, you seem to
very educated and experienced on what a Project Manager is
and does?
The other
students reply was, “Are
you kidding, this class (PM Class) is awesome!!!!! I have
learned at least one thing in each class I have attended
that I use every day at my job.”
Supervisory Training Program “STP”
The first
STP Class “Unit 8” went well with 19 students finishing the
class, of which 15 are looking forward to coming back to the
second class ‘Unit 5”. The STP Classes are 24 hrs of
classroom study. We have broken each unit into six – 4 hr
sessions, one sessions weekly. Classes start at 7:30 AM.
All ten units will take approximately 18 months to complete.
Upon completion, AGC National will provide each individual a
certificate.
As long as
there is a high rate of participation, this will be an
ongoing class… so if you miss one you can come back at a
later date to finish all 10 sessions.
A message from the Education Department:
We appreciate the time you have allowed your employees to
attend these classes. We spend a great deal of time and
energy to keep our education programs meet the high standard
you expect, and we feel the instructors and facilitators we
have teaching our programs are some of the best in the
country. Thank you for your support!
Continuing Education Seminars for Human Resource Personnel:
The second
seminar in a series of three, regarding continuing education
for Human Resource
Personnel is scheduled for
September 22.
The topics for this session will deal with “Exempt
vs. Non-Exempt” and “O.T.
Laws and Practices”.
Please note
that the class will be held at the newly remodeled AGC
building located at 6212 Ferris Square, San Diego, 92121.
BIG NEWS!
AGC San Diego Chapter and AGC of California present “Desert
Impressions”- Fall Conference- Oct. 11-14 at the Hyatt
Grand Champions- Indian Wells
The
AGC of San Diego Chapter
and the AGC of California
have joined forces
to bring the entire statewide AGC membership together for
the AGC’s Desert
Impressions Fall Conference. The Conference will
be held at the beautiful
Hyatt Grand Champions Resort in Indian Wells
beginning October 11,
2006 and
concluding Saturday morning Oct. 14th.
It is expected that over 500 AGC members from throughout
California will attend. Brochures have been mailed to all
our primary contacts from each member company and the
brochure can also be accessed on our website at
http://www.agcsd.org/AGC%20flyers/San%20Diego%20Brochure.pdf
Members of
the Meetings & Events Committees of both chapters have been
planning the event for several months. The AGC Fall
Conference offers a number of high profile seminars and
educational sessions, opportunities to network with other
AGC members from throughout the state, and time to enjoy a
variety of social events. In addition, California’s
political leaders that are interested in making sure our
state invests on our infrastructure are expected to attend.
All AGC
members are invited to attend the
AGC’s Desert Impression’s
Fall Conference. Join over 500 of your peers from
throughout the state for education, politics, networking,
and fun!
Make your plans now to attend the Fall Conference Oct
11-14th
“iSqft Randy’s” Obscure factoid
Obscure Factoid:
The smell
of Crayola crayons is so familiar that it is one of the
twenty most recognizable scents to American adults (ranking
up there with coffee and peanut butter) and so soothing that
sniffing them has proved to lower blood pressure.
AGC Annual Softball Tournament- September 16th
The
AGC Annual Softball Tournament
is scheduled for Saturday,
September 16th.
For more information, or contact Rae Krushensky at
858.558.7444, ext. 22
Upcoming AGC Safety and Education Classes
Please note:
AGC classes will be held at
National University
located at
9388 Lightwave Avenue,
San Diego, CA 92123-1426 (North of Aero Drive and Ruffin
Road) until September.
You can now register on line for classes (this
does not include payment on line option yet).
AUGUST CLASSES
August 15-16-
CQM
August 30
– CPR/First Aid – 8 AM
August 31-
Supervisory Training Program- Session 1
Upcoming AGC Committee Meetings
AUGUST MEETINGS
August 15 -
Meetings
& Events Committee at noon –
Location:
Brady Company-
8100 Center Street, La Mesa 91944
August 17
– Specialty Contractors Council @ Adam’s Steakhouse 7 AM
August 18-
Affiliate Members Council-
Postponed
Date: TBD
August 22
– HR Committee Meeting 11:00 AM–
Location:
Cavignac & Associates-
450 B Street, Suite 1900,
San Diego 92101
August 23
– AGC Toastmasters @ Roel- 7AM
Looking Ahead…Upcoming AGC Events
Save The Date:
September 16 –
AGC Softball Tournament
September 23–
Aztec Football Tailgate
and SkyShow
October 11-14th
– Joint Fall Conference with AGC of California in Palm
Springs –
details on
website
