NECA TransmissionsNotes from the front lines of the electrical contracting industry

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. . .

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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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