The International Union of Operating Engineers Locals 14 and 15 reached new three-year deals late yesterday with contractor associations, avoiding a strike that may have brought city construction to an abrupt halt, Crain’s reported.

Louis Coletti, president of the Building Trades Employers’ Association said the unions “made major adjustments” in order to facilitate a deal though details of the agreements were not immediately available. Operating engineers put a “substantial offer” on the table, according to one labor source. [more]

Ten billion dollars worth of construction may grind to a halt this week if unionized crane-operating engineers decide to strike over wages and licensing exams, according to Crain’s.
As the Thursday contract deadline approaches, contractors and developers who hire the engineers have been aggressively campaigning to eliminate “no-work” mechanics and oilers, who, they said, get compensated highly — around $700,000 per year — but do little graft. By eliminating the positions entirely, $67 million could be saved at the World Trade Center site over three years, they said. Managers and owners have also been urging the city to begin national licensing exams for operators to increase safety standards. Labor leaders, however, see the exam proposals as a means to leverage concessions from unions. [more]

New York’s building contractors have voted to end a more than century-old pact to use only union labor on construction sites as a June 30 deadline nears for building trades contract negotiations in the city. According to Crain’s, Louis Coletti, president of the Building Trades Employers’ Association, said yesterday that his board of governors voted to end the New York Plan for the Resolution of Jurisdictional Disputes, which is set to expire Dec. 31 but has always been extended in the past. The long-time agreement, with the Building and Construction Trades Council, requires contractors to hire only union workers and helps to resolve disputes between unions so that work is never interrupted during projects. [more]

A recent deal struck between DC9 International Union of Painters and Allied Traders, representing 4,000 painters in the New York area, and construction industry association, the Association of Master Painters and Decorators of New York could set a precedent for 30 or more other building trades contracts coming up for renewal this summer, according to Crain’s.

Painters will see no raises in the first year of the four-year contract but raises totaling 9 percent over the following three years. Employers will have to give an extra 75 cents an hour for benefits in the first year. Good news for employers: No more health, pension or overtime costs, and a 7 percent cost reduction for certain interior projects.
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Regional Plan Association, a prominent civic advocacy group, is supporting builders and real estate executives in appealing for concessions from construction unions, the New York Times reported. Labor costs, the advocates argue, will force builders to hire non-union employees.

The association compiled a 51-page report arguing for the elimination of obsolete work rules and feather-bedding and advocating for a traditional eight-hour work day. The expiration of 30 union contacts in June marks an opportunity for reform in the $25 billion unionized industry, they say. This comes less than three weeks after 400 union construction workers protested outside the Taj Pierre Hotel as Sam Zell, founder of Equity Residential Properties, arrived for a speaking engagement. They were unhappy that Zell uses non-union workers. [more]

From the September issue: Construction firms have long had a habit of bidding below cost to beat out the competition and snare jobs. But as the backlog of construction jobs that had existed is petering out, the underbidding is happening even more — and it’s becoming even riskier.

As companies bid low, observers fear a spate of stalled projects down the line, when the firms run out of funds mid-construction.

“We’re in a very dangerous spiral,” said Louis Coletti, president of the Building Trades Employers’ Association. “I’m already starting to hear stories about subcontractors, and some general contractors, who aren’t able to finish their jobs because they don’t have any cash flow and they’re bankrupt. … There will come a point when they may be at risk of going out of business.”

In the past six months, Coletti said he’s observed increased concern surrounding this issue. For one, underbidding is becoming more prevalent.

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From left: Steven Spinola, Lou Coletti, and Robert LiMandri

Construction and real estate industry organizations are in conversations with the city’s Department of Buildings to make the permitting and development process more predictable in the face of possible service reductions resulting from looming budget cuts, a trade group leader said.
Building Trades Employers’ Association chairman and CEO Louis Coletti said DOB commissioner Robert LiMandri asked his organization and the Real Estate Board of New York to identify major priorities such as ways to improve the city’s processing of building applications.
“A lot of the concerns we have is the department’s ability to respond quickly [during the permitting process], especially in an economic era where [it is likely] most city agencies are going to have less resources,” he said. [more]

From the February issue: As New York City construction firms get slammed by the downturn, they are turning to more modest projects, in some cases taking on multimillion-dollar renovations rather than the multibillion-dollar skyscrapers. While it’s clear that the collapse of the New York development market has taken a toll on builders and brokers, there may be nobody in the industry hit as hard as construction firms. As banks have largely cut off financing for new projects and cranes have been mothballed, thousands of contractors have lost their jobs. “It’s having a devastating impact on the construction market,” said Lou Coletti, president of the Building Trades Employers’ Association, which represents 1,700 construction management and contractor firms. “There are very few, if any, new projects moving forward.” To combat that lack of work, major New York construction firms are bidding for much smaller projects and diversifying into public-sector work, while other firms have been forced into bankruptcy protection.[more] [more]

In an effort to try to equalize the playing field for builders on public construction projects, the city is encouraging small contractors to take advantage of the recently-increased bond guarantees by the Small Business Services Department, which could allow them to bid on at least $370 million in city projects per year. Previously, many builders were priced out of the market on large projects because they couldn’t qualify for the necessary bonds that guard the city against financial losses in case builders do not carry their assignments to completion. With the bond guarantees now up to $5 million, small building companies will have a fighting chance at landing public contracts. The policy change is especially important for small businesses because public construction activity is likely to outpace activity in the private sector over the next couple of years, said Lou Coletti, CEO of the Building Trades Employers’ Association.