New IBEW -NECA Agreement Lauded as Real Solution to Lagging Economy; Labor & Management Address Customers’ Needs Together

ST. LOUIS --- The International Brotherhood of Electrical Workers (IBEW) Local One and the St. Louis Chapter, National Electrical Contractors Association (NECA), have ratified a new three-year contract that breaks with long-held traditions to offer construction buyers pricing that is aggressively competitive.

The 8.23 percent across-the-board cut in IBEW electricians’ compensation and other significant contract changes dramatically reduce the cost of union electrical construction with the IBEW’s highly trained, highly skilled work force. That cut escalates to 8.77 percent on January 1, 2011. Additional contract changes make the total cost savings to construction buyers, general contractors and home builders even greater for many projects.

“The contract changes adopted by IBEW Local One and NECA are unparalleled in terms of listening to what customers say they need and responding with more than anyone expected,” said Jim LaMantia, executive director of PRIDE, the St. Louis area’s construction industry labor-management-owner industry cooperative group, founded in 1972. “This sets the bar higher than it’s ever been lifted to offer real solutions to bolster our lagging economy.”

The new IBEW-NECA contract, effective June 1:

• Enacts significant wage and fringe benefit reductions.
• Reduces total crew cost through flexible use of apprentices with different skill levels to enable IBEW/NECA union electrical contractors to compete more aggressively and simultaneously increase work opportunities.
• Trims shift work pay, overtime pay and fringe benefit costs.
• Initiates the IBEW Code of Excellence, which solidifies joint employer-employee efforts to meet customers’ needs and deliver the best value for every dollar invested in construction.

The Code of Excellence requires employers and electricians to work together to consistently satisfy customers by delivering the highest levels of performance, professionalism and productivity. The code institutes a process for continual improvement to deliver maximum jobsite efficiency and professional performance. Highlights of the code include the following:

• All IBEW workers adhere to contractual obligations for a productive work day with minimal idle time.
• IBEW workers and NECA contractors consistently work together to assure delivery of the highest level of value to customers.
• IBEW workers commit to abide by owner and contractor rules and conduct work professionally at all times.
• Electricians and contractors pledge to achieve maximum levels of jobsite safety.
• IBEW workers pledge to be fit for duty at all times with zero tolerance for substance abuse.
• IBEW workers and NECA contractors pledge to work together to maximize productivity and jobsite efficiency.
• Employers provide appropriate tools, planning, supervision and materials to assure the highest levels of performance.

IBEW Local One adopted a compensation rollback only once before in its 119-year history, a 19.6 percent reduction in 1930 as the country entered the Great Depression. NECA contractors, who collaborate with IBEW Local One through the labor-management group, the Electrical Connection, pledged to compete with aggressive marketing and pricing. The new contract allows contractors to use electricians at different stages of training to lower costs while ensuring high quality, safe installations. The terms maximize the industry’s ability to attract new electricians as jobs develop and start new apprentices throughout the year.

IBEW & NECA Aim to Get Stalled Projects Out of Starting Blocks

“We looked at our community and our industry in recession and together considered how we could generate jobs, and position our contractors and workforce to be the highest value choice for our mutual customers,” said Douglas R. Martin, executive vice president of the St. Louis Chapter, NECA. “This is an example of labor-management cooperation at work. Our NECA contractors and Local One understand our customers’ needs and the importance of lowering construction costs to help attract and retain business for St. Louis and our eastern Missouri markets. We hope our actions inspire our customers to move stalled projects out of the starting blocks and take advantage of the lower costs we can deliver, along with the exceptional skills, education and training of our workforce.”

Stephen P. Schoemehl, business manager of IBEW Local One, added, “When construction investment increases, employment rises and everyone benefits, from neighborhood businesses and restaurants to homebuilders and car dealers. And because taxes are paid based on spending, income and business revenue, construction spending helps generate more tax dollars to better meet public needs. Since our last contract, we have been delivering small and massive projects of ever-increasing technical complexity. As St. Louis competes with cities across the country for the high-tech industries of the future, including renewable energy, our collective skills are among St. Louis’ greatest assets. We want to be buyers’ first choice, and IBEW members were willing to make personal sacrifices to move our region forward and invest in its future.”

The new three-year contract covers about 3,100 IBEW Local One members working for 147 electrical contractors in Missouri plus a number of contractors in Illinois, represented by NECA. It applies to work in the City of St. Louis and 25 Missouri counties, stretching from the northern border of Lincoln County south to the Arkansas border. The contract was approved 12 days prior to its June 1 expiration.

New Contract Boosts Value, Lowers Costs

“The changes we’ve adopted are an enormous tribute to the commitment of IBEW members to St. Louis and to our mutual customers,” Martin said. “As a construction team — labor and management — we must constantly improve our value and performance. Our new IBEW-NECA contract is a dramatic signal of our ability and willingness to do just that amid great economic, political and financial uncertainties.”

Terry Bader, senior vice president of development for VisDev Ventures, a Navvis company providing healthcare consulting nationwide, has bought healthcare construction throughout the country for 25 years in both his current role and for 23 years at St. John’s Mercy Medical Center and as director of planning, design and construction for the Mercy System. “Construction has its cycles, but the current economy is new territory for everyone. Today, it’s all about the availability of money or lack thereof, due to the economic pressures everyone is under,” he said. “It is unprecedented to have a union scale back wages. I have to give the IBEW union enormous credit for being this proactive about getting their members back to work. In addition, other features of the new IBEW-NECA contract allow electrical contractors to get creative and competitive with the nonunion sector. As an owner buying construction services, there is no doubt about the high quality of work provided by IBEW members and NECA contractors. We are spoiled here in St. Louis. I’m doing work all over the country and the quality doesn’t measure up in many cities around the country. This is a great example of how the construction industry can work together to find a way to climb out of the hole we are presently in.”

“I am amazed by what the IBEW and NECA have done together with their new contract. It’s a great way to promote value for our construction consumers and clients,” said Bob Fritz, vice president of Clayco and 2010 chairman of the Associated General Contractors (AGC) of St. Louis. “We have some of the best construction craft training programs in the country, and we offer the best quality construction in the nation. But we also have to think globally as an industry, and work as contractors and labor to be competitive in order to win the work. The new IBEW-NECA contract is a big step in the right direction.”

Len Toenjes, president of the AGC of St. Louis, said the new contract bolsters efforts by the AGC for several years to strengthen the competitiveness of the St. Louis commercial construction market. “The new labor agreement between the St. Louis Chapter of NECA and IBEW Local One puts St. Louis in a far more competitive position to attract projects and increase development. AGC of St. Louis congratulates everyone involved and recognizes the hard work it takes to make significant changes that spur increased economic development. This contract shows a mutual commitment to build opportunities for additional construction projects in the St. Louis region and generate jobs for construction contractors and the craftworkers they employ.”

The latest national construction employment report issued by the Bureau of Labor Statistics ranked overall construction unemployment in February 2010 as the worst in 10 years, reaching 27.1 percent — far worse than overall unemployment. In St. Louis, average unemployment among the building trades tops 30 percent.

“With current unemployment levels among electricians at about 35 percent, the contract changes for IBEW Local One union electricians — some of whom have been without work for more than a year — represent an even greater sacrifice,” Schoemehl noted. “The risk of brain drain, feared among the scientific and business communities here, is just as great among the AFL-CIO Building & Construction Trades if we fail as a community to ignite construction.”

The downturn in construction spending since the nation entered the current recession more than two years ago has been pervasive across nearly every sector. McGraw-Hill’s report in the May 12, 2010 edition of Engineering News-Record showed a 14.1 percent decline in construction revenue from 2008 to 2009 among the nation’s Top 400 contractors. The general building market has been the biggest loser, with backlogs in the private sector essentially evaporating overnight.

St. Louis has the capacity to provide a world-class workforce to build high tech industries. IBEW apprentices complete at least four-and-a-half years and a minimum of 8,000 hours of training to become journeyman wiremen in a program that meets the standards of the U.S. Department of Labor. IBEW electricians regularly continue their education at the St. Louis Electrical Industry Training Center to be ready to deliver the most efficient installations for emerging technologies and innovations.