Friday, July 01, 2011

Last-minute pact averts city-wide construction strike, avoids jeopardizing arena construction; was feared strike why double-shift construction began?

Update and clarification, 7/12/11: Given that a Project Labor Agreement (PLA) governs the Atlantic Yards construction site, a strike would not have affected it, though there could have been informational picketing.

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Though no one admitted it, maybe it was the threatened--and just-averted--strike that led Forest City Ratner to go to double-shift construction at the Atlantic Yards arena site last month.

With contractors' and developers' concerns about construction costs driving discussion of contract renewals, a strike loomed today had not various construction unions agreed to renew contracts that expired yesterday--but a strike was averted as time nearly ran out.

The AP, via the Wall Street Journal, reports:
New York City crane operators have averted a strike after negotiations went down to the wire.

Louis Coletti of the Building Trade Employers Association says two unions representing crane operators, excavators and maintenance engineers agreed on a new contract late Thursday, less than two hours before their contracts expired.

Work could have been halted at World Trade Center sites and a new basketball arena in Brooklyn.
Other unions reached agreements earlier in the day, according to Crain's New York Business, but the operating engineers--from whom significant concessions were sought--control the cranes and thus are essential to any site progress.

City Hall News reports:
A much-feared construction strike was averted late last night when two operating engineers locals agreed to get rid of high-paid, no-work jobs that were built into old contracts. Sources involved in the talks said the union caved because other trades balked at giving up their paychecks in sympathy with overpaid and underworked engineers. Another factor: The Bloomberg administration is moving to adopt national crane licensing standards, which could break the operating engineers' stranglehold on New York's tower cranes and open the door for lower-paid non-union competition.
NYBC warning

The New York Building Congress, an industry group that includes Atlantic Yards developer Forest City Ratner, issued a statement before talks concluded:
Opportunity to Reduce Construction Costs Hangs in Balance as Construction Labor Negotiations Near Deadline

Possible Strike Threatens City's Economic Recovery

Negotiations are under way to replace the contracts of important New York City construction unions whose current agreements expire today, with more contract expirations to follow throughout the summer. While such talks traditionally intensify as the deadline nears, and an agreement often is reached, some negotiations are so far apart that a strike appears imminent.

While there’s never a good time for a work stoppage, the timing could not be worse for New York City. A strike now would threaten $10 billion in unionized building construction and more than 11,000 union jobs.

Like most New York industries, the building community has been hit hard by the latest recession. Overall construction spending is down nearly 25 percent since its 2008 peak. Industry employment, which has fallen by 30,000 over the same period, is at its lowest level in 13 years.

There are signs that the economy is recovering, though slowly and tentatively. Employers are starting to hire once again and bedrock New York industries, most notably the financial sector, are reporting improved results. Some major employers are back in the market for new office space and the credit crunch is easing.

Such improvements in overall conditions historically have been followed by resurgence in major building. Indeed, a large number of previously stalled and permitted projects are poised for construction, with the promise of returning thousands of hard-working men and women back to job sites across the five boroughs.

The bad news, however, is that construction costs remain stubbornly high. While a number of factors help make New York City the most expensive construction market in the United States, the biggest contributor is labor costs, which account for 50 to 60 percent of all building expenses. The situation has become untenable and must be addressed in the current negotiations in order to stimulate the types of investments that are necessary to revive the local economy.

Management is right to insist on reductions in the cost of labor, which could be achieved largely through new work rules designed to improve productivity and eliminate no-show jobs. At the same time, union members, who work under challenging conditions and without any guarantees of steady employment, deserve wages and benefits that are fair and comprehensive.

The bottom line, however, is that no one wins with a prolonged strike. Workers lose paychecks. Contractors lose jobs and developable sites sit idle. Our nascent economic recovery comes to a screeching halt, and the industry is set back by years. In addition, a prolonged strike would jeopardize the timely completion of a series of critical City-shaping projects, including the World Trade Center, Gem Tower and the Barclays Center. The end result is a City that is less enticing to residents and less competitive for businesses.

As a coalition of organizations comprising all facets of the design, construction and real estate industry, the New York Building Congress urges management and union negotiators to permanently reduce construction costs by focusing on eliminating non-productive work rules. While the stakes are high and the task made more difficult by the number of participants, each side must nonetheless come together in the spirit of mutual dependence and dedication to New York City’s future.

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