NECA TransmissionsNotes from the front lines of the electrical contracting industry
  • Pension Perils

    Posted on Oct 27, 2008 by John M Grau

    I hate to add to the pile of bad financial news, but have you checked your local defined benefit pension plan lately? If it wasn’t underwater before this current stock market crisis, it is now. At least in terms of the funding standards under the new pension regulations established a couple years ago.

    Add private and public pension plans to the list of institutions that Congress needs to save from technical bankruptcy. I say “technical bankruptcy” because in most cases the plans themselves are not bankrupt. They just don’t meet the funding standards established by the government. While funding standards are good and necessary, in times like these strict interpretation of the regulations can lead to even more disastrous results.

    To my way of thinking the solution is fairly simple. Allow pension plans to spread their liabilities out over a longer period of time. That way, they work their way out of the hole as their investments recover over time.  (Right now, it looks like that might be a long time). 

    This isn’t a bailout.  It shouldn’t cost the government or the taxpayer anything. The alternative would. If plans ultimately fail, they fall back on the Pension Benefit Guaranty Corporation (PBGC) to pick up the pension liability and payments. Then it does become a bailout, and we all pay the tab.

    The problem is, Congress seldom does it the easy way. There is already talk of finding ways to make 401(k) participants whole for their losses. This has lead to more talk about re-engineering the whole pension system in our country, including a government take-over of all pension and 401(k) plans. Private pensions and savings plans would cease to exist.  A government-mandated plan, skewed toward lower-income participants, would be substituted.

    So far this it just talk. But some kind of Congressional action will be required in the months ahead, which opens the door to all kinds of ideas.

    NECA has already moved pension issues to the top of its government affairs agenda. We will not only be actively monitoring the situation, but proactively working with other like-minded organizations in coalitions to promote sensible solutions while fighting off harmful alternatives.

    Small businesses, like all citizens, have a big stake in how the government addresses our current financial mess. NECA won’t hesitate to jump into the fray to represent the interests of electrical contractors. Your support, advice, and guidance will be needed as with deal with some issues we have never had to confront before.

  • Meet David Roberts

    Posted on Jan 24, 2008 by John M Grau

    As Executive Director of NECA’s Southern Region, B. David Roberts is responsible for a territory from Arizona to Virginia that encompasses 15 states and 34 NECA chapters.He interacts regularly with two NECA District Vice Presidents and four IBEW International Vice Presidents.He directs a staff of four NECA field representatives, plus an office assistant.

    Above all, David Roberts is the right man in the right place.His depth of knowledge and personal touch in dealing with complex issues and disputes makes him a highly effective and widely respected NECA representative. David has devoted most of his career to working for NECA, serving as Southern Region Executive Director for over 20 years.He also worked as a NECA field representative for nine years and as manager of the former Ouachita Valley Chapter from 1973-1978. David also had a brief career as a high school football coach and math teacher.

    David holds the distinction of being one of the longest serving appointees to the Council on Industrial Relations.Whenever the Council breaks into two panels to decide cases, David plays the key role of coordinating and presenting NECA’s positions on the second panel.He has earned the admiration and respect of both IBEW and NECA representatives to the CIR.

    David was born in Yazoo City, Miss. He earned his bachelor’s degree from the University of Mississippi and during summers, he worked as a carpenter on construction crews.

    While at Ole Miss, David played wide receiver on the same football team as famed quarterback Archie Manning.Apparently David dropped too many of Archie’s passes, or he might have moved on to the pros as well. (Archie Manning is father of current pro quarterbacks Payton and Eli Manning.)

    I appreciate that David has always been willing to provide me with lots of advice and down to earth wisdom, my favorite being “crow isn’t half-bad if you know how to fix it.” Having had to eat my share of crow over the years, I’ve found this bit of advice to be particularly useful.

  • A Brief History of (Construction) Time, Part 4

    Posted on Dec 03, 2007 by John M Grau

    Read Part 1Part 2, and Part 3 . . .

    My last post in this series on BRT/CURT takes us up to how the organization is influencing the construction industry today. The speaker who kicked off the CURT National Conference in November talked about a global industry in crisis. He listed the challenges facing the construction industry, a worldwide shortage of skilled workers chief among them. One solution he offered was that owners don’t bid projects until they are know that all resources are available – including manpower. That may sound nice on paper, but who decides which projects go first?

    IBEW President Ed Hill and Building and Construction Trades President Mark Ayers followed this presentation. They used their time to discuss what the organized trades are doing to staff the owners’ projects. Ed talked about NECA/IBEW recruitment and organizing efforts and highlighted the Construction Wireman/Construction Electrician category as one way we are addressing the manpower shortage issue.

    The union effort stood in sharp contrast to a presentation from the non-union side, which basically had nothing new to offer. Both sides readily admit that we have a lot of work to do.

    The conference wasn’t all about manpower. The newly developed ConcensusDocs construction contracts have created a buzz, along with an effort by the architects group to promote the newly revise AIA pattern documents. Building Information Modeling (BIM) and its growing use on construction projects was also discussed. BIM is a topic that NECA is closely following, and one that we plan to be increasingly involved with.

    While at this year’s meeting, I thought back to my uneasy attendance at BRT construction conferences in the late 1980’s. I feel that we’ve come a long way. The group’s outward animosity towards unions is gone. Unions recognize that they have to meet the owners’ needs. Owners recognize that contractor associations play an important role in advancing the whole industry.

    It’s not a perfect relationship, by any means. But we’ve moved beyond re-hashing the past, and we’re working on what we need to do now and in the future. It’s a much healthier relationship, and one that will reap better rewards for all of us.

     

     

     

  • A Brief History of (Construction) Time, Part 3

    Posted on Nov 26, 2007 by John M Grau

    Read Part 1 and Part 2 . . .

    When The Business Roundtable (TBR)shut down its construction committee in 1990, it left many construction department heads at owner companies wondering what to do. Not too many years before, they had been deeply involved in developing a series of monographs on construction industry issues. These monographs were intended to be prescriptive remedies for the construction industry, focusing on training, safety and productive work practices. They set forth agendas for owners, contractors, contractor associations and unions. They were widely embraced by most elements of the industry, and the individuals who worked so hard to develop them didn’t want all their work to go to waste.

    The remnants of the BRT committee gathered to decide their future, and in the summer of 2000, they committed to form a new organization of construction owners. They came up with the name – Construction Users Roundtable, or CURT for short. In forming CURT, they decided on a few important changes.

    First they wanted to broaden the scope of their membership. Realizing that the U.S. economy was trending away from heavy industrial manufacturing, they reached out to new big construction consumers like Intel, Disney and Merck. They allowed in some large constructors as associate contractor members and even created a category for the major construction associations.

    The new CURT group also reached out to unions. In what has become known as the Tripartite Initiative, CURT formed a committee of owner representatives, construction union presidents, and contractor association leaders. At first the meetings were a bit tentative. But it soon became apparent that the old BRT leadership had moved on, and the new generation knew little of the horrors of the 1960’s. They weren’t necessarily sold on unions, but they weren’t opposed to them either.

    And union leaders had evolved as well. Best exemplified by IBEW President Ed Hill, the unions openly admitted past mistakes and readily discussed the need for improved productivity, better attitudes, no absenteeism, no jobsite jurisdictional disputes, and a safe, drug free workforce.

    On top of all this, the owners realized that the construction industry was facing a manpower shortage, and the union side of the industry had the best system to recruit and train workers. The relationship between owners, contractors and unions had a new beginning, and we needed to take full advantage of it.

    What about CURT today? One more post to go . . .

     

  • A Brief History of (Construction) Time, Part 2

    Posted on Nov 19, 2007 by John M Grau

    Read Part 1 . . .

    I attended my first meeting of the Construction Committee of The Business Roundtable in 1986. I was invited by J.R. Pritchard, a NECA member from West Virginia who did a lot of work for DuPont, and Jack Buttrum, a NECA member from Evansville, Ind. who worked on Alcoa projects. Despite their sincere invitations, I didn’t feel very welcome at the meeting.

    The owner representatives of The BRT were very hostile to unions and union contractor associations. Everyone I talked to recounted the “horrors of the 1960’s” when construction unions called the shots and owners suffered jurisdictional walk-offs, feather-bedding practices, and costly job delays. Ted Kennedy (not the Senator – the founder of non-union B.E.& K Construction) was the darling of the group. The carpenters union followed Ted wherever he went and set up pickets outside the meeting hotels where he spoke. He reveled in the attention and saw it as a sign that he was doing something right.

    The non-union organization Associated Builders and Contractors had a prominent spot on most of the BRT meeting agendas to talk about their “Wheels of Learning” training program and how they were developing safety and drug testing programs. Union leaders were not invited, and union contractor associations were barely tolerated. 

    With Jack Barry elected as the new IBEW president and other changes in union leadership, I knew that construction unions had changed. I also knew that the owners were stuck in the past, unaware of these changes. So I decided to engineer at meeting between Jack Barry and Charlie Brown, a DuPont executive who many considered the spiritual leader of the BRT Construction group.

    Charlie drove down from Wilmington, Del., and we met at the Madison Hotel next to the IBEW office in D.C. We didn’t get off to a good start. Charlie started talking about the 1960’s, and then starting quizzing Jack about the IBEW’s position on federal legislation. He wanted to know when the unions would start supporting Republicans for office and why they were aligned with the Democratic party. 

    For his part, Jack was very patient. He tried to convey the union’s new attitude, but Charlie kept talking politics. I asked Charlie what all this had to do with productivity on the jobsite. That sent him back to the 1960’s, and I never got an answer. It was clear to me that Charlie would never warm up to unions, and that with few exceptions, the entire BRT group felt the same way. The BRT hated unions and unions hated the BRT.  I thought the situation was hopeless.

    What started to change was a shift in focus of BRT-member CEOs. They became less interested in U.S. production issues and more focused on global competition. They began building production plants in Mexico and Central America, and later, in China and India. They cut their own in-house construction management staff and in the late 1990’s, these CEOs shut down the BRT Construction Committee completely. The BRT, which was founded on controlling construction costs, was no longer interested in construction at all.

    So where does CURT come from? I’ll answer that in my next post ...

  • A Brief History of (Construction) Time, Part 1

    Posted on Nov 15, 2007 by John M Grau

    The Construction Users Roundtable (CURT) held their annual National Conference in Naples, Florida last week. Milner Irvin, Dan Walter and I represented NECA. CURT’s membership is comprised of some of the largest, best recognized industrial companies in the U.S. – companies like Boeing, Intel, General Motors, ExxonMobil and American Electric Power. NECA and about a dozen other national construction associations are associate members.

    CURT began back in 1969 when former U.S. Steel Chairman Roger Blough formed the Construction Users’ Anti-Inflation Roundtable. At the time, big construction users were being pounded by huge price increases on their projects, some as high as 25 percent annually. Blough gathered together the heads of the nation’s largest companies in an effort to achieve “stability” in the construction industry. He wanted to form a united front of big corporations to stiffen contractors’ resistance to union demands, even at the price of construction delays.

    Construction contractors and their associations charged that the big companies wanted their projects completed without delay and at any cost. General Motors was urging contractors to schedule 70 hour work weeks in building its new Lordstown, Ohio assembly plant –  with the overtime paid at double time. Meanwhile, GM needed a plant to produce a small car to compete with the Ford Maverick, and it needed it fast.  The story was the same for every manufacturer.

    With pressure like that, construction contractors could do little to resist union demands at bargaining, and wages spiraled upward. Given the lower rate of globalization in the late 1960’s and early 1970’s, this translated to overall high inflation in the U.S. economy.

    With the involvement of then-Labor Secretary George Schultz, President Richard Nixon instituted overall wage and price controls. NECA Executive Vice President Robert Higgins sat on the wage board that was responsible for approving labor agreement settlements in the construction industry. Any labor agreement that increased wages by more that five percent needed wage board approval. Ultimately, wage and price controls failed. It turns out that they only delayed inflationary pressures. They didn’t eliminate them.

    Roger Bough’s Roundtable eventually morphed into The Business Roundtable (BRT), a select group of 200 big company CEOs. In the early 1970’s, it was the most important business lobby group in the country. Their focus continued to be construction, though they branched off into other business policy matters as well.

    Early on, the BRT thought construction contractors and their associations were weak, so they tried to deal directly with union leaders. When that didn’t get them anywhere, they turned to the non-union segment instead. Over the next two decades, the BRT embraced non-union contractors. Some big users, especially those in the petro-chemical industry, all but shut out union construction companies from bidding their work. And the non-union ABC and construction companies like B.E.& K were off and running.

    More in my next post. . .

About NECA Transmissions

NECA Transmissions is a collaborative effort from CEO John Grau and NECA staff to provide insight and feedback on key issues from the front lines of the electrical contracting industry.

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