By Guy Snyder
Michigan Construction News.com

In a national economy that's been softening in a direction known too well by Michigan contractors, what's been happening to the construction labor shortage crisis? It still exists, according to the first summer National Safety-Labor Forum held July 9 in Detroit by The Association of Union Constructors (TAUC). According to that group, over the next generation we can expect it to get worse.

Bob Santillo, vice president and president-elect of TAUC, who's also president of McCarl's Inc., a mechanical contracting company based in Beaver Falls, Pennsylvania, predicted "an explosion in industrial construction" on the horizon, a forecast also confirmed by Chris Hernandez, president of the Northwestern Indiana Building Trades Council.

A great deal of it will be centered in energy construction, such as petroleum refineries and electrical generating stations, but even the steel industry is expected to expand and modernize. Hernandez said in his market area he is expecting "seven to eight years of good market opportunities," and is already having to cope with skilled trade shortages, especially on short-term projects.

Santillo said he's heard forecasts extending as far as 25 to 30 years. At the same time, there's supposed to be a loss as high as 50% of the nation's skilled trades before 2018. By then even older workers who have delayed retirement will be compelled by age to drop out.

Their optimism is backed by data compiled by the U.S. Census Bureau. While reporting overall construction dropped 5.1% during the first five months of this year compared to the same period in 2007, it was primarily due to a 27% decline in residential construction. Non-residential construction actually increased 20%. Leading the charge was petroleum and chemical plant projects, up 47%; power plant construction, up 38%; and manufacturing plant construction, up 33%.

For Michigan the problem has been that many of these advancements are occurring beyond its borders, though that picture is expected to change. Shorty Gleason, president of the Michigan Building and Construction Trades Council (MBCTC), told the TAUC audience that the past five years "has been the slowest growth period I've seen in 35 years in the industry." Union construction in our state has been averaging about 93 million hours per year and he expressed concerns that a movement toward enacting a right-to-work law in the state could severely jeopardize Michigan's highly successful union construction apprenticeship programs.

Even so, the light in industrial construction that has started to shine at the end of Michigan's tunnel is coming from its electrical utilities. Currently six coal-fired power plants are in the proposal stage, including a $2 billion project in Midland and one of similar size near Bay City. DTE Energy is also planning a $3 billion nuclear power plant near Monroe. In Southwest Detroit, Marathon has just begun work on a $1.9 billion refinery expansion and, according to Ed Coffey, a business representative for the MBCTC, difficulties in finding enough skilled trade workers qualified to work on such a complicated job are already being encountered.

Michigan's unionized contractors have been lean and highly competitive in a tough market, added Patrick Devlin, the MBCTC's secretary-treasurer. He said it's all been due to outstanding apprenticeship and journeyman skill upgrading programs, combined with a culture of cooperation between contractors, owners, and the building trades.

Some of it is illustrated in a drug and alcohol testing program administered by MUST (Management and Unions Serving Together) that's saving Michigan an estimated $1.5 million in annual safety and drug testing costs while "providing a tremendous service to promote convenience, verifiability, and affordability," Devlin said. "The MUST system is also tied in with the Michigan Association for Responsible Contracting, a statewide coalition of labor management groups that are involved with school districts' hiring of responsible contractors for their facility projects."

The meeting's agenda included a report prepared by Bill Parsons of the Occupational Safety & Health Administration. Among his topics was an estimate on when the new standard for crane and derrick operation will be ready. At the moment, he said, the preamble to the standard is still being drafted and edited, a document expected to be over 1,000 pages long.

o A report on owner expectations, presented by Bud Burns, chairman of the TAUC Labor Committee, from J.J. White Inc., Philadelphia, Pennsylvania. He outlined five areas of concern, stressing that owners should provide a single point of contact for project owner-contractor communications on their construction projects, give contractors exclusive responsibility for labor on project sites, communicate effectively and provide as much information about a project as possible, be prompt in contractor payment, and become involved in safety and work rules through consistent polices.

o Bill Hering, chairman of TAUC's Safety Committee, from S.M. Electric Company, Rahway, New Jersey, stressed in his "safety minute" how complacency can severely damage any construction site safety program. "You have to be fighting the danger of drifting away," he said. "The race for safety never ends. You've got to remember that." He also said management has to convince workers they are empowered to make prudent safety decisions, "so that they feel that, without negative consequences, they can stop work if they feel it's unsafe."

o A panel of experts consisting of K.P. McBride from Chrysler Corp., Ron Koshewitz of Ford Motor Corp. and Carl Gabbard of General Motors Corp. discussed kit work (or kitting) under the National Maintenance Agreement Policy Committee. The work regards modifications to existing manufacturing equipment lines. The three automotive representatives outlined a growing trend toward the use of turnkey operations to perform such work, due to a reduction in project owner staffing.

Plans are already underway for a second Safety-Labor Forum to be held by the group in December in Washington, D.C.