Market Recovery

Market Recovery

SMACNA and SMART work together to garner market share in key sectors across the United States and Canada.

By / Don Procter

Never underestimate the capacity of a great partnership to get the job done. In a show of resilience and ingenuity, SMACNA chapters have teamed up with SMART locals in several jurisdictions across the United States and Canada to strategize on how to recapture work lost to non-union competitors. Initiatives in various jurisdictions demonstrate regionally-specific strategies, including mutually beneficial contract amendments like those in Houston, Texas, and Washington, DC.

The Houston Sheet Metal Contractors Association (SMCA) and SMART Local 54 are focused on regaining market share in the hospital and healthcare sector in Texas’s largest city. Right now, union contractors represent less than 15 percent of that sector.

“It had been quite a mainstay for us and a source of a lot of man-hours,” says Glenn Rex, executive vice-president of the Houston SMCA. “But we’re not as competitive today.”

He says evidence of changes in unionized contractors’ market share comes from a five-year survey of more than 900 local hospital and healthcare projects constructed between 2013 and 2017.

In 2017, the local union and the contractors’ association brainstormed market recovery initiatives, and the collaboration decided to formulate a memorandum of understanding (MOU) to target hospitals and healthcare. Taking lessons from other MOUs developed across the United States, the Houston chapter and Local 54 also identified and eliminated a number of elements in its contract.

“There are no more ratios and no more rules, and we are going to work straight time for 40 hours (overtime after 40),” Rex says. “The typical CBA has quite a few more working conditions and rules. We simplified the contract for this market niche, and I am confident we have the right people to make this change.”

From surveys of non-union jobsites in Houston’s healthcare sector, a typical project consists of a leadman (journeyman/foreman) with a crew of what union contractors call preapprentices but what non-union contractors call helpers or apprentices. “It is part of why their crew costs are so low,” Rex says.

Eddie Gonzalez, business manager for Local 54, and Rex add they are formulating a request for a variance from the national pension fund. Details have yet to be finalized.

Local 54 and the Houston SMCA are trying to determine if a similarly comprised crew can be achieved using existing building trade rates in the union contract. “Employers are struggling with that concept because they are used to a journeyman/apprentice crew with people who are skilled and don’t need constant attention,” Rex says.

Gonzalez says each employer will be asked what type of crew makeup they are comfortable with. “We are coming up with examples of different crew costs and what the average apprentice and average classified worker make along with the journeyman and/or foreman.”

“The ultimate goal is to dominate the healthcare projects again and raise the standards where we can have more apprentices in the near future,” Gonzalez adds. “For now, now we have to try to recover what we’ve lost.”

To make this happen, Rex says, it is going to require a different mindset from both the members and the contractors. Union contractors working in healthcare are generally preferred by the owner or general contractor for their high skill and high-quality labor, but many hospital and healthcare owners go non-union because it costs less.

Gonzalez says there will be some “heartburn” for members along the road, but the industry must do something to recover its loss. Members will be given the option of participating or staying the course, he says. “But I have to do what I do to man these jobs because we do want to move our percentage of the market share into the positive.”

He adds the Local’s partnership with SMACNA is the key to success. “It’s like a family: we aren’t always going to agree on everything, but our members know that we have to do something together to regain the sector.” Visit pinp.org/conferences/ pinp18/schedule for market recovery ideas presented at the 2018 Partners in Progress Conference. •

Don Procteris a freelance writer based in Toronto Canada. Photos: Top and middle photos courtesy of SMACNA Mid-Atlantic Chapter. Bottom photos courtesy of Justin Cogdill.