Crains New York, June 26, 2011, Sunday

Crains New York

June 26, 2011, Sunday

Crains New York


Crane strike looms as contract deadline nears
$10 bilion in major New York City construction projects are at risk if union operators strike over pay, work rules.

They operate the cranes, backhoes and other pieces of heavy machinery that keep the city's construction sites humming. But by week's end, unionized operating engineers could be hoisting picket signs rather than steel girders and slabs of concrete—and forcing $10 billion worth of building activity to grind to a halt.

In the run-up to Thursday's contract deadline, the contractors who hire the operating engineers and the developers who pay them have campaigned aggressively to eliminate highly compensated positions that they contend involve little work. Doing away with “no-work” mechanics and oilers who, they claim, earn as much as $700,000 a year could save $67 million at the World Trade Center site over three years, they have argued.

Managers and owners have also pushed for the city to adopt a national licensing exam for crane operators, maintaining that it would increase safety. But labor leaders depict the call as an attempt to leverage concessions from the unions, which have a stranglehold on the current testing process.

The construction industry has zeroed in on Locals 14 and 15 of the International Union of Operating Engineers, sensing that a down economy is just the time to extract givebacks from a group widely seen in the building world as less willing than other tradesmen to compromise.

The two unions did not sign on to the cost-saving agreements that other laborers reached to help jump-start construction after the financial crisis, although they have made deals with owners on individual projects outside the official industrywide ones. The unions, whose members are the key cogs in construction projects, have had little incentive to give in.

“They control the work site; they control the movement of men and materials,” said Louis Coletti, president of the Building Trades Employers Association. “That's what's given them their power over the years.”

The operating engineers, an insular group who pass jobs down to family members, have long been the outliers of the construction industry. Even within organized labor, there is a perception that they've been slow to change.

Leaders of the operating engineers' two unions, which have a combined 6,500 members, did not respond to repeated requests for comment.

The unions have drawn attention in part because their salaries are among the highest in the industry. Tower crane operators earn salary and benefits packages worth up to $97.93 an hour, while oilers cost employers as much as $73.44 an hour, according to the city comptroller's office.

Industry officials have also made allusions to the checkered past of both unions. A sweeping federal mob investigation in the early 2000s found that since at least the 1980s, the Colombo and Genovese crime families had exercised a “corrupt influence” within Local 14. Twenty-six officers, representatives and members of the union were convicted of racketeering.

In 2008, Local 14 signed a consent decree with the federal government to weed out the corruption. An ethics attorney and a hearing officer were brought on board. Neither returned calls seeking comment about changes being made within the union.

Jeffrey Grabelsky, director of the Construction Industry Program at Cornell University ILR School, says the attempt to paint the operating engineers as laborers who are paid exorbitantly for little work is unfair.

“Walk around the city and watch those operating engineers work. They are incredibly skilled, well-trained workers, and they're operating with very small margins,” he said. “I'm not saying there shouldn't be a careful look taken at work practices and traditional work rules, but if there's a problem, it's an anomaly. Deal with the problem. Don't paint with a broad brush.”

Rank and filers from other trades agreed.

“As an iron worker, literally, my life was in the hands of the crane operator,” said Pete Herman, a 20-year member of Ironworkers Local 361. “I'd be on top of the column when a 10-ton piece of steel is swinging. When I'm standing on top of that column, I'd say, 'Buddy, you've got a good touch.' I was amazed at the way they could sit and put the steel right there and keep me safe.”

The last operating engineers strike was in 2006, when an attempt by the General Contractors Association to win changes in work rules sparked a weeklong walkout just before the Fourth of July. Thousands of workers were sent packing, and billions of dollars in projects came to a standstill. A settlement included minor concessions and hefty raises.

But this time around, though similar work rules are at the center of the conflict, building contractors are digging in their heels, citing a sour economy and growing competition from nonunion labor.

“We have to have reform,” said Mr. Coletti. “Every work rule has to be a productive work rule. Every job has to be productive.”

Other trades appear to be on their way to forging agreements or reaching extensions by the deadline, but a strike by the operating engineers could silence nearly $10 billion worth of private-sector construction at more than two dozen major sites across the city, according to a survey of owners by the Real Estate Board of New York. Because it would be difficult for other trades to do their jobs without the operating engineers, a walkout could result in some 11,000 workers being idled.

Builders are preparing for a strike, stockpiling materials on high floors so that work can continue without the operating engineers—a process known as “loading up the job”—and trying to figure out how workers will get to their locations, which can be hundreds of feet above the ground. Officials with the Building Contractors Association and the Contractors' Association of Greater New York are meeting with members to discuss strike preparedness.

But without the "good touch" of the crane operators, work won't be able to continue for long.