Thursday, January 24, 2013

Video: Forest City executive misleads Council, claims that steel fabricator for Atlantic Yards modular housing is union shop

Did a top executive from developer Forest City Ratner--which proudly stresses that it only builds in New York with union labor--mislead Council Member Letitia James when she asked whether the fabricator of steel for modular housing as a union shop?

Evidence suggests yes.

The exchange came during the lengthy Committee hearing January 22 on modular construction, as excerpted in the video below. (Turn up the volume.)

James asked if any elements of B2, the initial tower being built at Atlantic Yards, would be built outside the city and state.

Yes, replied External Affairs VP Ashley Cotton, identifying the steel chassis of the modules. She noted that it's "incredibly noxious, industrial sort of work," not typically done in New York.

"Where will it be built?" asked James.

"Fredericksburg, Virginia," responded Bob Sanna, Executive VP and Director of Construction and Design Development. Cotton repeated the location. (Actually, the firm Banker Steel, which also made steel for the Barclays Center arena, is headquartered in Lynchburg, VA.)



"And is that site a union shop?" asked James, at 0:33 of the video.

Cotton pushed the microphone toward Sanna.

"Yes, for our steel fabricators, yes it is," he responded.

Seconds later, at the 0:42 mark of the video, Cotton turned back toward Sanna and briefly shook her head, a gesture that suggested correction or reproach. She did not, however, publicly inform the Committee on Housing and Buildings.

Checking with Banker Steel

Virginia is a right-to-work state and company owner Dan Banker, who supplied a plane for Republican candidates to fly around the state in October 2009, doesn't fit the profile of a union supporter or partner.

So I contacted Banker Steel to ask if it was a union shop. I got an evasive response from spokesman Emanuel Guerreiro: "You can find out more about Banker Steel at www.bankersteel.com. Any questions relating to B2 should be addressed to Forest City Ratner."

The firm's web site doesn't indicate union workers, nor does a job announcement, as in the screenshot below.

Yesterday, I received confirmation from a labor source in Virginia that Banker Steel is not a union shop.

Update 3/30/14

At right is a resume from a former Director of Human Resources at Banker Steel.

It indicates the firm is a non-union shop.

Checking with Forest City

Before then, early in the morning, I contacted Forest City Ratner spokesman Joe DePlasco, citing Banker Steel's evasiveness, and asking him to clarify Sanna's comment. He didn't respond.

Later in the day, I sent the above video to Cotton, asking for clarification. She didn't respond.

I also sent the video to Council Member James, commenting that evidence suggested Forest City had lied.

Her response: "All I can say is I am not surprised."

Why it matters: Forest City's rep as union supporter

This matters for two reasons. First, Forest City has both pledged to use union labor and harvested significant, vocal union support for its projects.

The hearing, in a bit of a twist, highlighted certain unions who feel they're getting a bad deal from Forest City's modular plans--because cross-trained workers in the modular factory will do work that licensed trades otherwise must do, apparently with the permission of the Department of Buildings, a very contested issue.

So any mention of non-union work would have further fueled antagonism toward the developer among the dozens of union workers in the hearing room and in an overflow room.

Why it matters: obscuring Forest City's savings

Second, given the enormous amounts of steel required in this building, which relies not only on a steel frame but a steel chassis for each module, Banker Steel will wind up doing a significant fraction of the work.

How much hasn't been quantified, but consider that, according to the press release below, Banker Steel has expanded a Lynchburg facility by 45,000 square feet for a workshop dedicated to fabrication of these modules, and plans to hire 50 new employees, possibly more.

Forest City plans to hire 125 union workers, along with 25 supervisory employees, at its 100,000 square foot modular factory in the Brooklyn Navy Yard. (There are and will be additional workers at the B2 site, though I'm not sure one report of 190 total local workers on the project is accurate.)

So, if there are 50 off-site workers in Virginia--plus supervisors and existing staff--and 150 off-site workers in Brooklyn, that suggests that at least 25% of workers building the modules are actually non-union, further saving Forest City money.

Of course, buildings use prefabricated materials all the time--local workers don't assemble toilets, for example, but buy them from suppliers. And nobody made a big deal of counting how many Banker Steel employees contributed to the steel for the arena facade.

In this case, though Banker Steel provides a notably larger fraction of B2 materials and labor. So it's important to know the firm's status, and to get a straight answer from Forest City.

The Banker Steel press release

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