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'Broken business model'? Contracts need new focus on training, market share

Date Posted: August 8 2008

By Mark Breslin
(Another in a series)

The time has come for labor and management to get real. Across this country union construction has lost most of its market share, and still some contractors yawn and some business managers just count votes. As a partial cure and strategy I would like to suggest we all take a new look at that blessed institution: the collective bargaining process and its by-product, the union agreement.

As the vehicles that drive training resources and priorities, they really need special scrutiny and attention.

Now seeing as I have negotiated over 100 Master Construction Agreements (that currently cover in excess of 120,000 local union craft workers) I may sound a bit jaded when I say that from a competitive standpoint, they are generally worth less than a bucket of cow (urine).

This colorful description accurately describes most collective bargaining agreements which read as an amalgamation of "sins of the past." They are filled with language and provisions that run from "gotchas" to "never-agains" to "we've always had it in there but never paid any attention to it."

Frankly I cannot think of any other business contractual relationships governed by documents so generally complex, outdated or irrelevant to the competitive market. Always reactive vs proactive. They generally read and reflect a time when the threat was an exploitive union employer who had the market sewn up. Now, decades later, they often just look old and tired. And the market threat is more savage and consuming than ever before.

Up until now, all the thousands of us going to the bargaining table across the U.S. and Canada have been in denial about this reality. Frustrated and often indignant, we go to the table with our little wish lists (2/3rds B.S.) and play the posturing game for several dollars and work rule changes. Often, foolishly, ignoring training entirely. An age-old game of trading something (as small as possible) for something (as small as possible).

And while we have been trading in each of our local "feudal kingdoms," the empire of union construction has fallen. The protective walls have come down. What we had has been taken and pillaged. The hordes have prevailed. And yet we play at it like nothing has changed. Even worse, in some cases, training strategies, resources and staffing have been shortchanged due to a process that does not take into account the cumulative benefit over time.

The future of bargaining cannot be about trading anymore. It has to be about competitive relevance. It has to be about productivity and market share; including how training and training monies can be increased and maximized. Every negotiation has to be focused on the new Golden Rule "How do we compete most effectively to expand our mutual economic interests?"

Anything that stands in the way of this must be eliminated. Anything that must be done to improve our economic interests must be done. Training cannot be a pawn or an area afflicted by negotiation union politics or contractor indifference. It has to be a prime answer to the Golden Rule question; based on market needs and a progressive vision of the future. Bottom line: a union agreement should be a document of mutual opportunity and strategy. If you disagree then give me a better alternative. The current broken system governing our contractual and operational relations has directly resulted in a loss of more than 80% market share.

Contractors cannot think that marginal work rule changes are going to get it done. There is not time enough to incrementally recover the market by trading for a competitive position a dollar at a time. If they wait for this they will eventually be put out of business or go non-union. Union leaders also have to realistically assess how they are going to: a) meet the ever increasing financial obligations and expectations of their members; b) maintain the last of the nation's defined benefit plans; and, c) keep their golden geese (the union contractor) alive and thriving to lay those golden eggs.

Stonewalling on the basis of tradition is how we got here. If they think the status quo will do it, they are betting their personal union pension on a proven market losing model for the next 25 years. Simply put, how we've been doing it, simply won't get it done.

There are many labor and management people as tired as you and I of this transparent game that consumes much and delivers little. Especially when it often ignores the needs and priorities related to training and market share. The new strategies that I am seeing at a best practices level include:
· Interest-based bargaining
· Facilitated bargaining
· Union strategic planning
· Training focus groups
· Owner-end-user training partnerships
· Joint labor-management strategic planning
· Adoption of business principles rather than politics to manage union enterprises
· Joint organizing / market development for union employer density
· Market focused rather than contract focused bargaining
· Direct rank & file involvement or heavy communication concurrent with necessary contract change
· Contractors not bringing micro items or single contractor issues to the table
· Elimination of the wish list / "strike-off one at a time" process
· Creation of national model bargaining agreement templates
· Creation of mandatory nationwide value-added policies (i.e. Codes of Conduct / Excellence)
· Incentive / productivity bonus programs replacing targeting funds (to incentivize vs. subsidize)

And these are just a few. In low union density areas the ideas are nothing less than shocking in their embracing of innovation and risk (mainly because there are few union political obstacles). I am now, at 47, starting to hear from many business managers and contractors younger than I. And they are much more practical and aggressive. They are a lot less concerned about what was done way back when.

They are aggressively courting new ideas because they are being handed the reality of a broken business model, a decimated market share and 20 more years in the business staring them in the face. Most of them have had training mentors who have guided them to this progressive vision. Many of these mentors are you readers.

If the market rewards of embracing change are to be fully realized, it is time for all of us responsible for tens of thousands of union businesses and millions of lives and families to take a deep breath and decide; do we do what is necessary and strategic or do we just fill that bucket of cow (urine) one more time.

Mark Breslin is a strategist and author specializing in labor-management challenges. He is the author of Survival of the Fittest, Organize or Die and coming in 2008 Alpha Dog. He addresses more than 50,000 labor and business leaders each year in North America. Coming soon a new Breslin Book for apprentice instruction : Million Dollar Blue Collar: Managing Your Earnings for Life and Work Success.
More on his work and profile is available at www.breslin.biz.