NECA TransmissionsNotes from the front lines of the electrical contracting industry
  • Crystal Ball or Construction Forecast?

    Posted on Apr 15, 2008 by John M Grau

    In the last six weeks, I’ve attended meetings in Chicago, Hawaii, New Orleans and Florida (twice).  I’ve participated in 10 conference calls with local NECA chapter boards of directors. I mingled with industry leaders from across the country at former IBEW International Secretary-Treasurer Jon Walters’ retirement dinner, and I talked with local business agents at the annual IBEW Construction Conference in Washington, D.C.

    So I feel pretty much in touch with what’s going on around the country, industry-wise. But the one thing I still can’t get a handle on is where the construction economy is headed. 

    If I read the papers and listen to economists from McGraw-Hill and other industry reporting services, I heard that we’re in a slump. Construction employment is down. That’s to be expected with the contraction in the residential sector.  But these reports say it’s impacted the non-residential sector as well.

    When I talk to NECA members directly, they seem very positive about the near-term (next year or so) work picture. Hardly anyone talks about an imminent slowdown. 

    I was at a reception with some executives of national trade associations a couple weeks ago, and I ran into my counterpart with the Associated Builders and Contractors (ABC). He confirmed the same outlook from his members. We both wondered when the other shoe will drop.

    At first I thought this sub-prime mess might only impact financial markets. The newspapers often equate what happens on Wall Street with what’s happening on Main Street. A credit crunch eventually works its way throughout the economy.

    I am interested in hearing from readers of NECA Transmissions. What’s the electrical construction work picture in your area? Do you expect to be busy for the next couple years? Are there any rumblings of delayed or cancelled projects?

    If I get a sufficient response, I’ll report back with the state of the electrical construction industry economy in a future posting.

  • Field Rep 2010

    Posted on Apr 07, 2008 by John M Grau

    In my last two posts, I’ve written about the NECA Field Service – its history and the challenges it confronts today. But what about the future?

    Will the job description for a NECA field representative of 2008 meet the needs of NECA members and chapters in the years 2010 and beyond? What will be expected of field reps then? What skill sets will be needed and how will they be organized?

    These are questions we are tackling right now in a project labeled Field Rep 2010. A small task force of NECA staff and chapter managers is working with me to create a profile of the skills and experience that the NECA field rep of the near future will need. Using that profile, we will lay out a plan to create the field service that our members will need in the year 2010 and beyond.

    NECA members can weigh in on this discussion. I recently sent an electronic survey to chapter executives to learn about what field staff services they find most valuable and what services they think we need to improve or provide. That same survey can be taken by NECA members reading this blog.

    Just click here, and you'll be directed to the brief online survey. If that link doesn't work, you may need to copy and paste the URL http://www.zoomerang.com/Survey/?p=WEB227N2X6N9VK into into the address bar of your web browser to access the survey. 

    As we move forward with Field Rep 2010, I will keep you informed of our progress and plans. 

  • 21st Century Demands

    Posted on Apr 02, 2008 by John M Grau

    Today, we find that the need for field staff services is exponentially greater than ever before. It can be a challenge for our four regional executive directors and 16 field representatives to juggle all the demands and meet all the needs around the country. So where do we go from here? Let’s start by looking at the facts:

    1. Chapters and local members are continually asking for more field staff expertise and engagement. Chapter staffs are comparably smaller today than they were 20 years ago. Many chapters that used to have assistant managers don’t today. Without this training ground for future manager positions, local chapters have difficulty finding experienced managers with a background in trade association management, labor relations and NECA practices. 

    Also, new chapter managers are less likely to have any labor relations experience since it is so difficult to obtain. Because of this, they will rely heavily on the NECA field staff for assistance in the day-to-day challenges of labor relations and working with local IBEW representatives

    Field representatives are also leading the new labor relations training programs and providing other collective bargaining education. This training aspect of their job is an important support feature for the local chapter.

    2. There is a greater need for field staff interaction with their IBEW counterparts.   The growth of special market recovery initiatives like the Florida Initiative throughout the country requires intensive work by IBEW International representatives and NECA field representatives. Without their constant oversight and guidance, these programs will fail. Meetings to establish an area-wide initiative, to develop market recovery tools, to set up manpower recruiting blitzes, and to guide contractors in the use of the new CW/CE categories require an enormous amount of field representative time. 

    Add to this support for the Code of Excellence and Industry Awareness programs, joint market recovery meetings and efforts toward multi-chapter portability. 

    Each NECA field representative must work with anywhere from three to eight IBEW International representatives. The IBEW has five times the number of field staff (not counting organizers) available to work on these issues compared to NECA. 

    3. Field Representatives are responding to more national directives. The field staffers have always been instrumental in collecting information and data that serve the broader membership. As industry information needs increase, the field representatives are being called on more often to assist in these efforts. They organize chapter board conference calls, prepare workforce development reports, gather labor agreement and labor data information for the members’ on-line database. 

    The field representatives are the face of the national organization at the local level. They are called on to meet frequently with local chapter staff and members to present and explain national programs and initiatives. 

    As NECA looks to the future and seeks the means to grow the value of the association for its members’ benefit, the role of the field staff must also be evaluated. More on what I hope will be the future of the field staff in an upcoming post.

     

  • The NECA Field Service

    Posted on Mar 24, 2008 by John M Grau

    The idea for NECA “field service” came in the late 1930’s when the Labor Relations Committee reasoned that NECA could negotiate better terms with the IBEW if it represented a significant portion of IBEW-labor employers. The committee adopted a set of seven objectives to guide the work of one field representative whose first objective was membership. The fifth objective was “to give assistance to contractors locally, as needed.”

    In May 1939, NECA hired Paul Geary, former manger of the Youngstown, Ohio Chapter, as its first full-time traveling representative. He had one primary goal: Build members’ bargaining strength by soliciting electrical contractors to join and work together.

    As NECA’s lone field representative, Geary soon found himself concentrating less on his first objective to build bargaining strength and considerably more on his fifth to assist contractors locally. In an October 1941 report to the Committee, he wrote:

    When this Committee adopted that objective, I am sure that it did not fully appreciate how far it was “sticking its neck out.” I am sure that it did not foresee that our Local Chapters and members would need and desire so much assistance as they have; much less, that they would not only request it, but would demand it, backing up their demands with threats that they would drop their N.E.C.A. membership if we didn’t get them exactly what they wanted, when they wanted it. What they want ranges anywhere from the total extermination of Journeymen (working) contractors, to the removal of an alleged uncooperative, incompetent or dishonest Union Representative. Performing under this objective has taken up at least 80% of your Representative’s time and the expense connected therewith represents of course a proportionately large share of your revenue.

    Today the NECA field service team is a vital component in NECA’s service to its members. It is comprised of 16 field representatives organized into four regional offices, each under the direction of a regional executive director.

    Unique among trade associations in the construction industry, NECA’s field service is the link that connects the national organization with independent local chapters and local members.

    More on the field service in my next post.

  • Q&A With Larry Bradley part 2

    Posted on Mar 13, 2008 by John M Grau

    Larry Bradley’s response that I posted in my last entry raised a couple more questions, so I went back to the source for a little more information.

    JG: Larry, you said that NEBF is in great shape now, what’s to prevent it from entering the “red zone” sometime in the future? Are the Trustees making any plans to prevent this from happening?

    LB: The Trustees are well-aware of the current status of the securities markets as well as the current demographic trend of the Baby Boomers entering retirement age. They are constantly monitoring demographic trends to insure that NEBF pension benefits are available not just for the Baby Boomers but for the generations after them.

    Steps have already been taken to ensure the soundness of the Fund. One of the most important of these steps is that NEBF contains a plan provision prohibiting the Trustees from increasing benefits if doing so creates a withdrawal liability.

    Additionally, there are numerous checks and balances protecting NEBF. Investment advisors provide feedback on investment performance to the Trustees. These same advisors are overseen by a separate investment expert, furthering security. And NEBF is valued annually by independent actuaries based on conservative actuarial assumptions agreed to by the Trustees. This means the actuaries can inform the Trustees of any potential impending problems.

    JG: So, in the end, should the employers contributing to NEBF be worried about unforeseen liabilities that they may have to pay for down the road?

    LB: While all pension plans carry inherent risks, our contributing employers can take comfort in the fact that the Trustees are taking proactive steps to ensure NEBF’s security which is reflected in the fact that the plan is fully funded for vested liabilities. As stated previously, the Trustees goal is to keep NEBF secure not just for the Baby Boomers in our industry but for future generations of electrical workers and their employers.

    If you have a question about NEBF feel free to respond to this blog. I’ll pass your questions or comments on to Larry, and we’ll include more NEBF information in future postings.

     

     

     

  • Q&A With Larry Bradley

    Posted on Mar 07, 2008 by John M Grau

    All the news about troubled financial markets is enough to make anyone nervous about their own investments. So I asked Larry Bradley, Secretary-Treasurer for the National Electrical Benefit Fund, a couple of the questions that had been on my mind recently about the NEBF.

    JG: It seems like every time I read a newspaper or turn on the news there’s another big company, like GM, with a pension plan in trouble. This leaves me concerned for NEBF’s future. Is the Fund in trouble?

    LB: No, NEBF is classified by the government as a “green zone,” plan, meaning it is a healthy, well-funded pension plan.

    JG: But what does the government mean by “green zone” exactly?

    LB: When the Pension Protection Act became effective in 2007, it contained a provision that required all pension plans to carry a rating regarding the plan’s status. A pension plan can be classified as healthy, endangered, or critical. A healthy plan is considered in the “green zone” while an endangered plan is in the “yellow zone.” A critical plan is in the “red zone.”

    A “red zone” plan is only about 60 percent funded and may carry a disproportionate ratio of retirees to active workers. A plan in the “yellow zone” is about 70 percent funded and is expecting a funding deficiency in seven years. A “green zone” plan is more than 80 percent funded and has no expected deficiencies in the near future.

    In NEBF’s case, our funding level is squarely within the “green zone.” In fact, the Fund is fully funded with respect to vested benefits based on our most recent actuarial evaluation, so the NEBF has no withdrawal liability—which is important for our covered employers.

     

     

  • Love and Labor Relations?

    Posted on Feb 25, 2008 by John M Grau

    It’s hard admitting a mistake in public. I made a big one a couple weeks ago. Instead of enjoying a night out with my wife on Valentine’s Day, as we traditionally do, I went out to dinner with the NECA Labor Relation’s Task Force. They weren’t happy to be with me either, and their spouses weren’t any happier than mine.

    When we scheduled a meeting with the IBEW leaders in Washington DC for the morning of February 15 we forgot that everyone needed to fly into town the night before. Thus, the dinner meeting on February 14.

    Beyond our personal problems, we did have a good meeting with Ed Hill and his top officers and staff the next morning. Milner Irvin, Rex Ferry, John Negro, John Colson, Geary Higgins and I were there for our regular meeting to discuss key issues of concern to both parties.

    It’s difficult to describe these meetings. They’re not labor negotiating sessions, but they do deal with real, substantial issues. We’re not announcing any new contract language or programs, but we do agree that we must increase market share for our members.

    At the national level NECA’s positions are pretty simple. We recognize the IBEW’s interest in bargaining for the wages and benefits of its members. Beyond that we believe that all other aspects of managing the work should be left to the employer. That includes the decision to select who to hire, how they’re supervised, in what ratios, and where they perform the work.   Over the years we have developed local labor agreements that control too much of what should be management rights. So our solution to competitiveness problems is to remove barriers which hamper an employer from managing his jobs.

    The IBEW doesn’t see it exactly the same way. But they do agree that we needed a new approach, because the old one wasn’t working. To that end we continue to seek common ground and common solutions, and we are making progress. We are developing and testing new tools in the many “initiatives” advancing across the country. Some work better than others.  Instead of waiting around to create the perfect plan, we are willing to make mistakes, and to learn from them.

    As far as my mistake goes, I’ll remember not to schedule a dinner meeting on Valentine’s Day. Actually around the table that evening, as we sipped our complimentary glass of champagne, we admitted that it’s nice to know that our wives wanted to be with us. It would have been much worse if they didn’t care that we were gone.

     

  • Jon Walters Retiring as IBEW Secretary-Treasurer

    Posted on Feb 19, 2008 by John M Grau

    Jon Walters is hanging up his boots, and I mean that quite literally. Jon may be the last in a long line of IBEW Secretary-Treasurers who favors wearing cowboy boots, and he recently announced that he is retiring at the end of this month.

    Jon was serving as the IBEW Vice President for the 8th District when I became NECA’s CEO in 1986. He’s currently the only IBEW officer still serving from that time, so for me, his retirement marks the passing of another chapter of our industry’s history.

    Jon exemplifies the best of IBEW leadership. He always dealt with problems directly and honestly. He took personal responsibility for getting things done, and his objective was to do what is best for the industry, not just for his constituents.

    Jon Walters is appropriately credited with creating the Code of Excellence program. He first tried out his ideas in his own district and then worked to implement them on a national basis. He understood that every IBEW worker should show up to work each day with a good work ethic and a good attitude. He also had a clear understanding that both IBEW members and NECA contractors have a customer and it is our job to give that customer what he paid for.

    The IBEW has appointed Lindell Lee, currently the IBEW Vice President for the 11th District, as the new International Secretary-Treasurer. Lindell comes from Local 124 in Kansas City. When Bob Doran was NECA’s President, Lindell was his local union business agent. Bob often told me what a great person Lindell was to work with. It’s good to know we can expect that same positive working relationship on the national level.

    In addition to all his experience with IBEW, Lindell also earned a master’s degree in business administration. That accomplishment may not be on the typical resume for a union leader, and it speaks well to the changing face of labor and the increasing acumen of the IBEW.

     

     

  • Health Care is Front and Center, Not on the Fringe

    Posted on Feb 08, 2008 by John M Grau

    Last week, NECA and the IBEW held their annual employee benefits conference. I couldn’t be there this year, but several NECA contractors and staff made the trip.

    I remember in the late 1980s suggesting to then-IBEW Secretary Jack Moore that NECA and the IBEW jointly sponsor a conference dedicated to employee benefit issues. The management of local health and pension plans is a serious responsibility that consumes a large chunk of our plan trustees’ time. We needed a forum for sharing ideas and conveying the latest information on rules, regulations and plan management.

    While the annual IBEW-NECA benefits conference has served some of that purpose, I think we can do better. Attendees have rightly criticized the conference program for promoting joint IBEW-NECA programs and sponsors too much. A number of NECA plan trustees have requested a conference of our own, in order to focus on current and emerging issues relevant to electrical construction industry plans. We’re planning such a meeting for years alternating with the NECA Labor Relations Conference – in other words, next year.

    I think we all recognize that fringe benefits aren’t so “fringe” anymore. They’re a big part of our labor costs and a major factor in our struggle to complete with non-union costs. It doesn’t mean, however, that these benefit plans have to be an albatross hung around our necks. Properly structured and managed, our fringe benefit programs can be part of our competitive advantage. 

    Health and pension plans can serve as a key component in attracting and retaining a qualified workforce. Most surveys I’ve seen show that most non-union electrical contractors offer some amount of health care coverage for their employees, though it usually isn’t the same high level of coverage offered by union employers.

    And this is where we have an opportunity to be more flexible. The marketplace for employer-provided health insurance has changed dramatically in the last few years. Some of our plans are now offering tiered levels of coverage at varying costs. Some no longer pick up the whole premium for family coverage.

    If a plan’s benefit level is structured correctly, then the advantages of a jointly managed healthcare trust come into play. Group-buying through the trust arrangement saves employers significantly, especially compared with individual-buyer options. And since the union is a part of the healthcare trust management, we find that the employees, through their representatives, are as interested in cost efficiencies as we are. 

    If you’ve recently heard about U.S. auto companies turning over the responsibilities for their healthcare and pension plans to the unions, they’re basically trying to achieve this same level of shared responsibility. Rather than making direct contributions to the plan, the company puts a big chunk of cash into a trust fund that the union would manage. And instead of just bargaining for benefits and leaving the cost up to the employer, the unions would have a stake in efficiently managing the trust – and their own benefits. The auto industry may just now be figuring this out, but we’ve had it in the construction industry for years.

    Suffice it to say that fringe benefits and their impact on our industry are at the top of our agenda at NECA. Our objective is to turn what many see as a problem into an opportunity.  It’s not an easy task to accomplish, but it is a vital one well worth pursuing.

    As always, your thoughts and suggestions on this subject are encouraged.

     

  • Risky Labor or Risky Management?

    Posted on Jan 30, 2008 by John M Grau

    Market share is eroding for union electrical contractors in one their main bastions—large cities. Contrary to common perception, one of the principle reasons for that erosion is not the cost of labor, but how the labor is managed.

    That’s the conclusion found in a new ELECTRI International study titled “We Built This City.” Researcher Perry Daneshgari reported on his work at the Foundation task force meeting last week in Phoenix.

    The Foundation’s annual January Task Force Meeting is one of my favorite meetings.  I was there along with NECA members, chapter staff executives, and other Foundation supporters. Long ago, we realized that academics and electrical contractors communicate differently. So the purpose is to bring Foundation researchers together with industry participants for a reality check of sorts - - having electrical contractors guide the research projects and ensure that they are on-point and relevant.

    If we don’t want good research to sit on a contractor’s shelf, we need to make certain that the academics focus on practical, applicable results, not on the spinning of theoretical concepts. Thus, task forces are created to bring the theoretical and the practical together in a useful format. At last week’s meeting, task forces were formed for projects, including “Local Apprenticeship Best Practices,” “Recruiting and Retaining the Supervisory Workforce,” “The Role of Electrical Contractors on LEED Projects,” and “Implementing Lessons Learned from the Florida Initiative.”

    “We Built This City” is a completed project rather than one just starting, and it generated lots of in-the- halls and after hours discussions among attendees.  In support of his main contention, Daneshgari reports that non-union contractors view themselves as a business, while a majority of union contractors view themselves as an extension of their field operations. Union contractors believe that it is the labor in the field that makes them money. Non-union contractors know that money is made by effectively managing labor. Union contractors believe that labor is the highest risk and uncertainty of the job. Non-union contractors consider management of labor to be the highest risk.

    While operational differences between union and non-union shop contractors were the main highlight of his report, Daneshgari noted additional reasons for the erosion of market share in major urban areas. 

    The continuing shift from an industrial market to commercial and residential markets is one. Portability restrictions and limitations on crew ratios were another. He also noted that the local leadership of the NECA chapter manager and the IBEW Business Manager, and the relationship between the two, has a major impact on market share—something I pointed out in a previous post. 

    As you can see, there were lots of provocative thinking and discussions going on at the Foundation task force meeting. Understanding the problem is a critical first step in implementing solutions. The work of ELECTRI International continues to be a valuable resource in that regard.

    I’d be interested to hear what you think of Dr. Daneshgari’s conclusions. Use the “Send Feedback” link below to send me your thoughts.

     

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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