ACHRNEWS

Exploring The Future Of Unions

June 16, 2005
Jason DiCesare, service tech for SMACNA contractor Danboise Mechanical of Farmington Hills, Mich., readies himself for a service call at the offices of a commercial customer.
A recent study by the New Horizons Foundation (www.newhorizonsfoundation.org) takes a look at the future of union sheet metal construction. The 24-month study took information derived from focus groups comprised of leaders from the Sheet Metal and Air Conditioning Contractors' National Association (SMACNA) and the Sheet Metal Workers International Association (SMWIA). New Horizons also interviewed construction industry experts and researched social and technological trends.

The News recently spoke with SMACNA immediate past president Mark Watson and SMWIA general president Mike Sullivan to get their feedback on the study and discuss the overall outlook for the union sheet metal construction industry.

Purpose Of The Study

The study addressed seven "myths" regarding the future of the industry. The goal of the study is to help people understand the realities and the shortcomings of each of these concepts, as well as to provide information that would allow SMACNA and SMWIA leaders to "make more informed decisions regarding the future of the industry."

Here is a list of the seven so-called myths:

1. All union sheet metal construction will remain locally controlled.

2. Unions will continue to have a significant influence in the marketplace and society.

3. The SMACNA and SMWIA contractors have an adversarial relationship.

4. Union sheet metal construction will always have a training advantage over nonunion sheet metal construction.

5. Employees will always be more loyal to the union than the employer.

6. Union labor agreements will always have a pay scale based upon seniority, not tasks or skills.

7. Both SMACNA and SMWIA contractors will continue to share a common vision for the growth of the industry.

Mark Watson, SMACNA immediate past president

Working Together

Watson believes that a strong national presence is vital to the viability of each organization, but bringing that message to the local level has been difficult. "There has been great progress made in the last eight years between the executives of both organizations," he said.

"We're making progress on getting information down to the local level, but it hasn't moved as fast as we would like it to."

The study outlined ways to strengthen the bonds between SMACNA and SMWIA. The results suggest that a strong partnership could lead to "an aggressive effort to systematically organize the market - SMACNA contractors seek to convert nonunion contractors while SMWIA organizers simultaneously approach labor."

The study was critical of a disintegrating relationship between the two organizations, noting, "inflexible training methods and an unwillingness to modify/change a compensation structure based exclusively upon seniority leave fewer contractors to fight over a rapidly shrinking market."

"I'm watching the compensation issue on the local level and the survival of the union sheet metal industry," said Watson. "Compensation should be based on task and skills as opposed to experience level. We are going to have a tough time surviving in the future unless we can resolve the compensation issue.

Mike Sullivan, SMWIA general president
"Unions have always based compensation the same way, on a four-year apprenticeship, and when a person becomes a journeyman they make the same wage. We have to get out of that mindset and look for other ways to compensate people. That issue is huge in my world. I haven't found anyone that can argue for the opposing side real well."

Sullivan points to another problem. "Recruiting - not compensation - in the construction industry is going to be the biggest problem in our trade," he said. "Today our people are making 25 percent less than they were making in 1979, which equates to less buying power. Recruiting is hard enough as it is. You can only keep people down so long."

The study emphasizes the need for changes, stating, "while not all experiments in new training, compensation, and growth strategies are successful, an overall spirit of innovation permeates the industry." The study also notes, "some partnering conversations move ahead, while others are mired in the same stalemated positions of the last 20 years."

"We have the best working relationship that we have ever had with national SMACNA," said Sullivan. "We can disagree on things, but we sit down and find a common ground.

"Our construction numbers have gone down in the last two years as far as membership but our market share is actually up over the last five years, up 6 percent this year."

"Our volume has gone up, but our man-hours has dropped 35 percent to 40 percent since 2001," said Watson. "We've lost a lot of jobs in our area to overseas companies."

Jason DiCesare, service tech for SMACNA contractor Danboise Mechanical of Farmington Hills, Mich., performs service and maintenance on a rooftop unit for a commercial customer.

Recruiting And Training

"Where we are losing industrial jobs we can pick up jobs on the HVACR service end," Sullivan said. "Some of these workers can transfer over easily."

Yet that won't be enough to make up for the loss of jobs due to retirements. "We are facing a bigger problem with all of the baby boomers retiring soon," Sullivan continued. "That means that there are a lot of positions that need to be filled."

Competition for workers will continue to heat up as the demand for HVACR technicians increases in the next five to 10 years. Some estimates put the need for technicians at 20,000 employees per year. How will the union sheet metal industry compete for new workers? The picture is grim, according to the study.

It states, "The proportion of all workers in the U.S. who are union members is at a 100-year low. Experts estimate that less than 13 percent of the U.S. labor pool is organized. As recently as 30 years ago, the number of unionized labor hovered around 25 percent."

Watson said, "It is up to the union to make the necessary changes to ensure long-term viability." Both men see training as a critical issue in the recruiting and retention processes. They see the advantage of union training programs as a way to attract new workers and keep them interested in HVACR as a career.

"We have to go out and recruit people and show workers that we can provide them with lifetime educational opportunities and that we have sound benefits," Sullivan said. "We have to be in the position to solicit the best people available from those who don't want to go to college or those who might go to a college for a year or so and drop out. We are addressing that now with our apprenticeship program which offers two years of college credit."

Watson believes that training is an important part of the overall package of changes that must occur to ensure a solid future for those in the union sheet metal industry. He believes that union workers need to become part of the culture of the employers they work for and move away from the traditional "union hall" mentality.

"There are issues of training that we have to deal with, i.e., a core curriculum followed by specialized training," he said. "But people have to buy into the fact that they are working for a company that is committed to providing them additional training. They need to become part of the company culture, although they are working for a union. It is important to embed yourself in the company, saying, ‘I work for this company as opposed to saying that I work for Local 263.'"

Watson believes that a well-trained worker is the most important key to success. "Our people work out of a union hall, and sooner or later in their work lifetime they are dispatched again out of that union hall," he said. "I've seen guys work 25 years for the same employer and all of the sudden something happens, and they are out of that company. If people take pride in their work and in their union, the employer will get the best people available."

The Bottom Line

The study concluded that declining union membership will continue but construction industry unions can utilize their significant wage advantage as a recruitment tool. The study pointed out that "the construction industry is a prime example of an industry sector that could actually see its proportion of unionized labor increase by 2025."

However, the study made an eye-opening bottom-line statement about the union sheet metal construction industry.

"Although unions are widely credited with creating and defending opportunities for waves of new Americans to begin living the dream of a middle-class lifestyle, the 21st century worker is not seeking union membership.

"Labor unions in general and the SMWIA in particular must fully comprehend the challenge they face. Membership will decline if immediate action is not taken. Aggressive efforts to organize the market and articulate the union advantages on issues such as wages, health benefits, and retirement will be vital for survival over the next 20 years. The union that can clearly and aggressively articulate its vision and mission will be successful in attracting like-minded individuals to its ranks."

Sullivan believes that one way of attracting new workers is to give a more precise definition of what a union sheet metal worker truly is, as well as possibly changing the job title. "We've been talking about changing the name to sheet metal workers/heating and air conditioning technicians."

But even a well-defined job description and career paths and career path supported by continuing education will face strong challenges as the economy becomes more global. While service technician jobs will continue to offer bright career opportunities for new or displaced workers, many of the skilled positions could disappear, taking with them the dreams of many would-be HVACR workers.

"We may see the trend where our CAD drawings will be sent overseas in the future," said Watson. "The technology is the same for getting drawings in cedar Rapids or Katmandu. This is an area that involves some of our highly skilled workers, and it starts the whole process.

"If that work is taken away from us, it opens the door for anybody to install our systems. The drawings could come back to a manufacturer, and the general contractor would then decide who would get the work."

For more information on SMACNA, visit www.smacna.org. For more information on SMWIA, visit www.smwia.org.

Publication date: 06/20/2005