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					    2004


  ANNUAL


LABOR REPORT
ANNUAL LABOR REPORT

 TABLE OF CONTENTS


  Summary.....................1

  Analysis of Data..........3



     Regional Analysis

 Eastern Region..........23
 Midwest Region.........30
 Western Region.........37
                                              Summary

Growth in manhours was widespread throughout the United States in 2004 with further increases

anticipated in 2005 by almost half of responding Chapters. Labor is plentiful and nonunion

competition remains the primary concern of contractors.



2004 Hours and Bargaining Trends

Manhours worked increased or remained the same in two-thirds of responding Chapters. Even with

this improvement over last year, manhours remain below their level of five years earlier in two-thirds of

reporting Chapters. The outlook is even better for 2005 with only 12 percent anticipating a reduction

in manhours.



Changes in market share, 2003 through expected 2005, have been minimal. Estimated market share

of union sheet metal contractors for 2004 was 38 percent. New settlements negotiated in 2004, a light

bargaining year, had an average first year increase of 4.6 percent with the lowest average in the

Midwest.



Labor-Management Cooperation

Most Chapters continue to report a high level of cooperation with labor. They generally reported at

least one of the available measures to make union contractors more competitive with the nonunion.

Many areas without Equality Funds would like to have them.

Joint Labor-Management Committees are widespread throughout the industry and received praise

for their accomplishments. Grievance activity remains minimal, except where work volume is low

.




                                                                                                       1
Collective Bargaining Issues

Health and welfare contributions are increasing almost everywhere, even as benefits are becoming

more restrictive. The average fund increased its hourly contribution by $.93 in 2003. All Chapters

reported that retirees are covered by the health and welfare program, most commonly on a sharing

of cost basis with the retiree.



Illegal drug use was identified as a serious problem by close to three-quarters of respondents.

Negotiated alcohol/substance abuse policies are widespread. Random drug testing policies have

become more prevalent than in past years.



Other Issues

The number one challenge for contractors in the coming years remains nonunion competition. There

is also widespread concern over the increasing number of retirees and the ability to recruit qualified

new entrants to replace them. About half of Chapters reported that work is being sought in new

markets, most often residential and service.



Trends

While not all respondents are identical each year, some change in responses are evident compared

to a year earlier:

         o Manhour outlook for the coming year is positive.

         o Joint Labor-Management Committees are increasingly active.

         o Percentage increase in new settlements is higher.

         o Random drug testing is more widely permitted.

         o Industry promotional programs are growing in numbers



2
                                         Analysis of Data

Responses were received to the SMACNA State of the Industry Survey from 48 of the 101 Chapters in

the United States and Canada, a response rate of close to half. The responses were geographically

representative and include information from most major metropolitan areas.



Survey Findings

In an improvement from last year, manhours increased or were unchanged in two-thirds of

responding Chapters. The rebound fell short of offsetting years of reduced manhours. Only one

Chapter in five reported that 2004 manhours exceed 1999. The outlook for 2005 is favorable with

almost half of Chapters anticipating higher manhours and 12 percent expecting a decline. Manhours

worked in 2004 and anticipated in 2005 were most positive in the West; however, manhours for three-

quarters of Chapters remain below five years earlier (Figures 1 through 3).


                             2004 Manhours Compared to 2003

                  Manhours Remained Same
                  20%

                                                               Manhours Increased
                                                               47%




                     Manhours Decreased
                     33%


          Reported mean decrease of 13.9%
          Reported mean increase of 9.5%                             Figure 1




                                                                                                 3
                      2004 Manhours Compared to 1999


          Manhours Remained Same
          10%                                     Manhours Increased
                                                  21%




               Manhours Decreased
               69%

    Reported mean decrease 21.6%                        Figure 2
    Reported mean increase 19.9%




                         2005 Predicted Manhours




      Manhours Remain Same                             Manhours Increase
      44%                                              44%




                                   Manhours Decrease
                                   12%



     Estimated manhours decrease 7.6%                     Figure 3
     Estimated manhours increase 7.5%




4
                                    Average Employment for 2004




            Average Unemployment
            20%




                                                            Average Employment
                                                            80%




                                                                  Figure 4




Employment during 2004 has averaged 80 percent, unchanged from a year earlier, with little regional

variation. There were Chapters in all regions reporting employment of more than 90 percent. Only in

the East were there reports of less than 70 percent (Figure 4).




                                                                                              5
                         Estimated Percentage of Sheet Metal
                        Work Performed By Union Contractors

                50
                          43
                                      39          38          38
                40

                30

                20

                10

                  0
                        1999        2003        2004        2005

                                                                   Figure 5




Annual changes in percentage of sheet metal work performed by union contractors are small, but

the current portion is down from five years earlier. The 2004 percentage was 38 and is expected to

remain unchanged in 2005 (Figure 5). Percentage of union work is highest in the Midwest.




6
                                      Selected Work Categories


                             22     19.8
                             20
                             18
                             16
                   Percent   14                                     12.3
                             12                     10.5
                             10
                              8
                              6
                              4
                              2
                              0
                                  State Work   Davis Bacon Work     PLA


                                                                     Figure 6


                                         Jurisdictional Disputes




                                                                   Yes
                                                                   49%
                                  No
                                  51%
                                                                    Figure 7




Among special categories of work, state prevailing wage projects account for nearly 20 percent of

total volume (Figure 6). This includes Chapters reporting no state prevailing wage regulations. Work

under Project Labor Agreements was most common in the East where some Chapters reported this to

be the most prevalent way to contract work. Close to half of Chapters reported jurisdictional

challenges with other crafts to be a problem(Figure 7).




                                                                                                  7
                                    Cooperation with Local Union



           Very Cooperative                                                  51


      Somewhat Cooperative                                     37


                      Neutral              7


    Somewhat Uncooperative             4

                                0          10      20    30    40       50        60

                                               Percentage of Chapters
                                                                              Figure 8




Good relations with labor continue to be the norm. Almost 90 percent of Chapters rate relations as

either very or somewhat cooperative (Figure 8). All responses in the Midwest were in the two most

cooperative categories. Poorer labor-management cooperation tended to be associated with other

negative local industry characteristics




8
                                         Local Grievance Activity
                                          in Recent Years



                                                             Decline
                                                             35%



                                 Stable
                                 56%
                                                          Increase
                                                          9%                 Figure 9




Grievances are generally infrequent or declining. Stable activity was often noted to be no

grievances either now or in earlier years. Few or no grievances were identified as the result of good

labor-management relations (Figure 9).




                                                                                                9
                             Joint Labor-Management Committee


                                   No
                                   19%




                                                          Yes
                                                          81%



                                                                 Figure 10




Joint Labor-Management Committees are found in four of five areas. Their activities are viewed

favorably. Meetings are generally scheduled monthly or quarterly (Figure 10).




10
                                    Market Recovery Vehicles Available




           Targeting/Equality                                                           70




        Specialty Agreements                                                  60




               Resolution 78                                                        67



                                0      10    20    30     40    50       60        70



                                                                                   Figure 11




Most responding Chapters reported at least one of the available measures to make union

contractors more competitive with the nonunion segment of the industry. Prevalence is little changed

from a year earlier. Many areas without Equality Funds would like to have them (Figure 11).




                                                                                               11
Bargaining activity was relatively light in 2004 with a quarter of respondents reporting bargaining

results. The average first year increase was $1.70 or 4.6 percent, somewhat higher than the prior year.

Half of the settlements were for three years with the remainder for longer periods. The national

average first year settlement was held down by the average percentage in the Midwest. Use of

mutual gains/interest bargaining was widespread, usually with success. For 2005, 40 percent of

Chapters will be negotiating new agreements (Figures 12, 13, 14 and 15).




                                          2004 Negotiated Wage/Fringe Increases
                                                Compared to 2002 and 2003



                               5   4.5                                4.6
                                         4.3 4.3
                                                     4.1                     4
                               4                           3.7 3.8                 3.6
            Percent Increase




                               3

                               2

                               1

                               0                                                         Figure 12
                                         2002              2003             2004

                                         1st Year       2nd Year         3rd Year




12
      Regional First Year Sheet Metal
       Increases Negotiated in 2004
6
    4.8                               4.8
5
                     3.8
4

3

2

1

0
    East         Midwest             West

                                                       Figure 13




         Use of Mutal Gains/Interest Based
      Bargaining Techniques in 2004 Bargaining

          No
          27%




                                     Yes
                                     73%


                                                 Figure 14




                                                                   13
                              Percent of Chapters Negotiating New Contracts
                                    or Wage/Fringe Reopener in 2005




                                                                              Will Negotiate
                                                                              40%




                Will NOT Negotiate
                60%

                                                                                       Figure 15




                                      Percent of Area Agreements
                                     Containing Selected Provisions




     H&W Maint of Benefits                           37

            Preapprentices                                               65

        Alternative Pension                                         60

        Classified Workers                                      56

       Apprentice Rotation                     23

                                 0   10   20   30   40    50   60    70       80


                                                Percent


                                                                                           Figure 16




14
Other provisions are included in agreements to varying degrees. Related to manning, about two-

thirds of contracts permit Preapprentices and over half include Classified Workers (Figure 16).

Maintenance of benefits language for health and welfare benefits is included in about one-third of

areas.



All Chapters reported that retirees are covered by the health and welfare program whether the

individual retires early or at 65. It is most common for the cost of coverage to be divided between the

health and welfare program and the retiree (fund is subsidizing coverage). With one exception, funds

fully paying for retiree health benefits were in the East. Most plans increased the employer

contribution to health and welfare and adjusted benefits. The average increase in health and

welfare contribution was $.93(Figures 17, 18 and 19).




                                  Retiree Health & Welfare Coverage
                                  Retires Before Medicare Eligibility




                                                          Fund Fully Pays
                                                          13%


                                                                 Individual Fully Pays
                                                                 20%




                      Fund/Individual Split
                      67%
                                                                                         Figure 17




                                                                                                     15
                                Retiree Health & Welfare Coverage
                                  Retires At Medicare Eligibility




                                                        Fund Fully Pays
                                                        21%




                                                            Individual Fully Pays
                     Fund/Individual Split
                                                            17%
                     62%
                                                                                    Figure 18




                                       Recent Changes Made to
                                        Health & Welfare Plan



               100
                                       88

                80                                              74


                60
     Percent




                40


                20


                 0
                         Increased Contribution       Changed Provisions
                                                                                                Figure 19




16
Unlike many questions, there are different regional views on drug/substance abuse. Illegal drug use in

viewed as a serious problem or worse in about three-quarters of all areas, including all in the West.

Almost all Chapters, except in the East, have a negotiated alcohol/substance abuse policy (Figure

20).




                                          Illegal Drug Use Problem


                                    70                  63
                                    60
                                    50
                          Percent




                                    40
                                                                  28
                                    30
                                    20
                                              9
                                    10
                                    0
                                         Very Serious Serious   Minimal
                                                                          Figure 20




                                                                                                17
Random drug testing is widely permitted in most alcohol/substance abuse policies, especially when

required by owners. Random drug testing policies have become more prevalent in the last year.

Most areas reported some owners/general contractors required random testing, however it was

usually less than half. (Figures 21, 22, and 23).




                                  Negotiated Alcohol/Substance Abuse Policy




                                        No
                                        19%




                                                             Yes
                                                             81%              Figure 21




18
                                         Policy Provides for Random Drug Testing


                                                 No
                                                 20%




                                                                           Yes
                                                                                      Figure 22
                                                                           80%

*Many respondents that answered yes qualified that their policy provides for random drug testing when required by owners. SMACNA

estimates that 19 Chapter agreements include random drug testing regardless of owner requirements.




                                              Percent of General Contractors/Owners
                                                 Requiring Random Drug Testing




                                         60
                                                  51
                                         50

                                         40
                               Percent




                                         30                 23
                                                                                 20
                                         20

                                         10                            6

                                          0
                                                 0-24%    25-49%    50-74%    75-100%


                                                       Require Random Testing


                                                                                                     Figure 23




                                                                                                                        19
The most important labor relations challenges to be faced by contractors in the next few years were

identified as:



       1. Nonunion competition

       2. Recruiting new entrants/labor supply

       3. Labor cost.



Nonunion competition was again the number one issue and is related to labor cost. Health care

costs, last year’s number two issue, was mentioned by a number of respondents.



Relating to other issues, the A-701 version of the SFUA continues to experience increased usage

(Figure 24). For the first time it was identified by a majority of respondents in all regions. Manpower

shortages and provisions to enhance worker productivity were infrequently noted (Figures 25) . While

a majority of local unions have lost membership in the past 10 years, increases in the number of newly

indentured apprentices were reported in 31 percent of areas. Most of the positive responses were in

the West (Figure 26).


                                              Version of SFUA




                                  70     65
                                  60
                                  50
                        Percent




                                  40
                                  30
                                                       20
                                  20                             15
                                  10
                                   0
                                       A-7-01        A-3-91     Other
                                                                                     Figure 24
20
  Manpower Shortages


                    Yes
                    15%




 No                           Figure 25
 85%




  Local Union Membership Change
           Last 10 Years




Unchanged
16%
                            Increase
                            33%




                                  Figure 26

 Decrease
 51%




                                              21
Over three-quarters of Chapters reported the existence of labor-management programs that market

the benefits of the industry’s skilled craft training (Figure 27). Most programs appear to be customized

to reflect their area. In a related labor-management cooperative effort, 60 percent of areas

reported joint lobbying on issues.



About half of chapters reported that work is being sought in new markets. Most often mentioned

were residential and service. There were comments that in the current environment no opportunity

can be ignored.



Over 90 percent of Chapters, including all in the West, reported that their local participated in the

SMWIA’s Paid Organizer Program. At least some success in “stripping” workers from nonunion shops

was reported in most areas. Some success in organizing was also reported; however, two Chapters in

the West accounted for half the total number.



                                             Promotional Programs




                              Print Ad                                     45
                                Video                      27
                             Other Ad                    24
                            Radio/TV                            31
                      Public Relations                                38
                                Other          9

                                         0    10    20    30         40    50
                                                                                Figure 27
                                                    Percent




22
                                         Eastern Region


Measures of activity were weakest in the East. Only a third of responding Chapters reported higher

manhours in 2004 and an equal portion are expecting increases in 2005. The region reported the

lowest market share and highest bargaining results.



Southeast

Years of declining manhours have ended in Kentucky, but no reversal is seen in the coming year. The

result has been declining market share as the wage difference with nonunion has increased. This

could be mitigated with better crew mix and reduced work restrictions. Health and welfare

contributions increased while benefits were reduced. Retirees are covered by the plan, but at no

cost to the plan. In the coming years, efforts will be made to at least maintain the present market

share.




Work is plentiful in Central Florida, but so is nonunion competition. Manhours increased in 2004 at the

same rate as overall volume. A very cooperative relationship with labor through a labor-

management committee has resulted in a residential agreement and productivity advances.

Contract measures are in place to make union contractors more competitive. Retirees are covered

by the health and welfare program, but fully pay the cost themselves. There is also the need in the

area to replace older workers who will be retiring (apprentice indentures are steady).



South Florida has experienced increasing manhours with expansion anticipated to continue in 2005.

Advances have been insufficient to increase market share. Local labor relations are very

cooperative. A Joint Labor-Management Committee meets quarterly and has developed a


                                                                                                    23
residential contract and productivity surveys. The local agreement includes all measures to make

union contractors more competitive. Health and welfare contributions increased, benefits decreased

and co-payments were revised. Although there remain unemployed workers, shortages for certain

skills exist. There is a long-term need to replace aging workers and apprentice indentures have

increased.



Efforts to maintain market share in Jacksonville have been successful. The employment level is high.

Job targeting, organizing and marketing have all been utilized. The local agreement includes all

measures to make union contractors more competitive. Retirees are covered by the health and

welfare plan, if they pay the cost. Illegal drug use is viewed as a serious problem. While there is an

alcohol/substance abuse policy, it excludes drug testing. Contractors could be more competitive if

labor supply permitted contractual crew ratios. Local union membership and apprentices have

increased.



An improving economy in Georgia increased manhours in 2004 with further increases expected in

2005. Market share is stable and labor-management cooperation is excellent; however, there is no

Joint Labor-Management Committee. While some measures to assist contractor competitiveness

exist, a light commercial agreement is needed. Grievances are non-existent in the area. Managing

health and welfare costs has required many changes to the plan. A widening margin between

nonunion and union wage and benefit packages and concerns regarding productivity continue to

worry contractors in 2005.




24
North Central

Years of declining manhours are expected to end in 2005 in Dayton. A poor economy has reduced

construction activity. Management has found labor to be very cooperative. Through a labor-

management committee, a referral list has been developed which better matches skills to needs.

Contractors could be more competitive if an equity fund were negotiated and fringes were paid on

hours worked instead of hours paid.         Inertia from the rank and file is making it challenging in

overcoming competitive disadvantages.



Detroit is anticipating an upward turnaround in manhours in 2005. Market share is steady with state

prevailing wage work important in this market. Relations with labor are very cooperative which has

resulted in a decline in grievances. The health and welfare fund fully pays the benefits for all retirees.

Negotiations for a contract renewal are scheduled for 2005. There remains the need to more

effectively deal with nonunion competition.



A small upturn in manhours is anticipated in 2005 in Michiana, IN following years of declines. State

prevailing wage projects are significant in the area. An active Joint Labor-Management Committee

is promoting the industry. Contractors are being monitored more closely by the local union resulting in

increased grievances. The local agreement includes the 55/30 retirement plan and maintenance of

benefits for health and welfare contributions. While illegal drug use is a serious problem and the local

agreement has an alcohol/substance abuse policy, there is no random drug testing.



Manhours increased in 2004 in Evansville, but remain below five years earlier. Currently, employment

level is low. State prevailing wage work is important. Labor and management have a very

cooperative     relationship   and   a   Joint   Labor-Management    Committee     has   recently been



                                                                                                   25
implemented. Early retirement and worker attitude are issues to be faced in the coming years.

Contractors need help in being more competitive with nonunion, especially in the light commercial

and residential markets.



Northeast

There has been little year-to-year change in manhours in Northern New Jersey. As a result, union

contractors are performing less of the total work each year. State prevailing wage work is very

important to contractors. Few measures to make contractors more competitive with the nonunion

segment are included in the local agreement. A new agreement was negotiated in 2004 with

increases of $3 for each of two years. The largest portion of the first year increase was allocated to

the health and welfare fund. The fund fully pays for coverage of all retirees. Illegal drug use is

considered a serious problem and no general contractors or owners require random drug testing.



Years of increasing manhours in Central and Southern New Jersey were offset by a weak 2004. There

are many workers available for employment and share of union work is declining. Most union projects

are prevailing wage jobs. A Joint Labor-Management Committee has recently been formed.

Contract terms which assist contractors in combating nonunion competition are needed in the local

agreement. Residential construction is an untapped potential market.




26
Boston has experienced manhour declines, but the area is coming off an exceptionally strong period.

Percentage of work performed union is down and most projects are performed under Project Labor

Agreements. Almost no measures are included in the local agreement to enhance competitiveness

and there is the potential for increased labor-management cooperation. Jurisdictional challenges

between crafts are a problem in the area. Efforts are underway to implement a union promoted

local supplemental pension fund.        To enhance worker productivity, flex hours have been

implemented in shops.



With new projects started, years of declining manhours in New York City are expected to be reversed

in 2005. There is a high level of cooperation between labor and management and grievances are

infrequent. Many measures are included in the local agreement to increase competitiveness,

however, a Preapprentice or Classified Worker classification is needed. The labor agreement will be

renegotiated in 2005. There is a need to increase efforts to retain and expand market share.



A 2004 increase in manhours in Southeast New York is expected to continue in 2005 as the local

economy expands. The employment level is high and market share is increasing. Most work in the

area is performed under a Project Labor Agreement. There is a high level of cooperation between

labor and management. An active Joint Labor-Management Committee has implemented an

Equality Fund. A wide variety of contract language exists to assist contractors in being more

competitive. Supply of an adequate number of trained workers is of concern.




                                                                                                27
Years of declining manhours on Long Island, NY are anticipated to continue in 2005. Nonunion

competition has increased in recent years, but market share remains stable. There is the potential for

improved relations with labor. The local agreement includes few measures to make union contractors

more competitive with nonunion. If a worker retires before Medicare eligibility, the health and welfare

fund fully pays for coverage. This agreement will be renegotiated in 2005.



Public sector projects resulted in increased manhours in Buffalo in 2004 as well as full employment.

Expansion in the union sector has been matched by the nonunion. Some measures exist in the local

agreement to make contractors more competitive, but a light commercial and service agreement

would be helpful. Bargaining in 2004 resulted in a four year agreement with annual increases about

3.5 percent. The parties utilized mutual gains/interest bargaining techniques. Nonunion competition is

expected to continue to be a serious challenge.



Philadelphia experienced flat manhours in 2004, a trend that is expected to continue in 2005,

reflecting the local economy. An active Joint Labor-Management Committee is involved in a

number of initiatives. While the local agreement includes many measures to make union contractors

more competitive, there remains a need for a classified worker. Negotiations in 2004 resulted in a

three year agreement with increase of $3.25 each year. $2.00 of the first year increase was allocated

to health and welfare. There was some success in using mutual gains/interest bargaining techniques

during negotiations. Health care costs and possible withdrawal of the carpenters from the AFL-CIO

are of concern.




28
After years of decline, manhours in Connecticut have leveled off. There is considerable labor

available to meet any increased activity and market share has declined. Most work is performed

under Project Labor Agreements. There is the potential for improved cooperation with labor as

evidenced by increasing grievances. While some measures are available to assist contractor

competitiveness, the Equity Fund is inadequate. A large increase in the health and welfare

contribution was required in 2004. Negotiations are scheduled in 2005 in an environment of strong

nonunion competition.




                                                                                              29
                                          Midwest Region


Employment level and market share are highest in the Midwest. Half of Chapters reported that there

will be contract negotiations in 2005.


Midwest

Manhours in St. Louis leveled off in 2004 after years of increase and are expected to be little changed

in 2005. There is full employment and a stable market share. Some measures to assist union

contractor’s competitiveness are in the local agreement. Illegal drug use is considered a minimal

problem, partly due to a strong substance testing policy which includes random testing. Nonunion

competition is a long-term challenge. Next negotiations will occur in 2006. Both the size of

membership of the local union and the number of newly indentured apprentices are on the increase.

The sheet metal industry on its own, and in cooperation with other industry sectors, has been active in

industry promotion, including new area project agreements and a newspaper insert.



Iowa experienced growth in manhours in 2004 with expansion anticipated to continue in 2005. Some

areas are experiencing full employment. Projects are plentiful resulting in a steady percentage of

work for union contractors. Larger projects, especially all union, are prone to jurisdictional challenges

between crafts. There is a very cooperative relationship with labor and a Joint Labor-Management

Committee has promoted the industry and safety. Pre-apprentice language is widespread, but only

one agreement in the state includes a Classified Worker. There was one new settlement in 2004 for

three years with increases just over a dollar each year. Illegal drug use is a very serious problem. The

drug/alcohol program and emphasis on safety training are enhancing worker productivity.

Illowa has experienced years of declining manhours which are anticipated to continue in 2005.

Performance reflects the local economy. During this period there has also been a reduction in the


30
portion of work performed by union contractors. A Joint Labor-Management Committee, meeting

monthly, has promoted PLA’s , safety and the industry. A number of measures are included in the

local agreement to improve contractor competitiveness, but there remains the need for a job

targeting fund. A new agreement was negotiated in 2004 which resulted in increases of 3.5 percent

each year for five years. The group participates in an extensive area-wide program that markets the

benefits of the industry.



Years of significant reductions in hours worked are expected to be reversed in 2005 in Wichita. Losses

in market share are also expected to rebound. Relations with labor are very cooperative. There is no

Joint Labor-Management Committee in the area. Most measures to enhance union contractor

competitiveness are included in the labor agreement.



A poor economy, restricted state funding and improved capabilities of nonunion contractors have all

adversely affected the unionized sheet metal industry in Springfield, IL. State prevailing wage work is

very important in this market. There is no Joint Labor-Management Committee and some measures

are available to assist contractor competitiveness. Programs have been developed to facilitate

residential work. Labor and management are working on an alcohol/substance abuse policy to

address illegal drug use in the industry.



Chicago has experienced small yearly changes in manhours in recent years. The outlook for 2005 is

favorable. There is a high employment level and stable market share. To assist union contractors

become more competitive, a residential specialty agreement and Classified Worker are needed. The

agreement includes a drug/alcohol abuse policy and a random drug testing requirement by general




                                                                                                    31
contractors and owners is widespread.       Contractors in the Windy City remain concerned about

escalating health and welfare costs. There will be negotiations for a new agreement in 2005.



There has been a severe downturn in manhours in Central Ohio with a similar drop in market share.

The poor economy and nonunion competition have adversely effected the industry. Relations with

labor are very cooperative, however, more language in the local agreement to assist contractor

competitiveness is needed. Responsible health and welfare fund administration has maintained a

sound financial position. Illegal drug use is a very serious problem with most owners and general

contractors requiring random drug testing. The state of the local economy is making it very difficult

for the industry to thrive.



While manhours increased in 2004 in Cincinnati, they remain below those reported five years earlier.

No change is expected in 2005 with a stable market share. There is the potential for better relations

with labor and the creation of a labor-management committee. Few measures are included in the

local agreement to assist contractor competitiveness with an Equity Fund needed. Retirees fully pay

for their health benefits. Illegal drug use is a very serious problem. Half of general contractors require

random drug testing and this is included in the alcohol/substance abuse policy. Health care costs

remain a concern as is the need for more agreement flexibility.



There have been small annual changes in manhours in Central Indiana with the current trend

upward. Market share has, however, declined with state prevailing wage work important. There are

very cooperative relations with labor and an active Joint Labor-Management Committee. Many

measures are available to assist union contractor competitiveness, but an Equity Fund Program

would be helpful. Negotiations in 2004 resulted in a three year agreement with annual increases just



32
over three percent.     Mutual gains/interest bargaining techniques helped the initial phase of

negotiations. Control of fringe benefit costs will be a challenge in the coming years.



A weak economy in the past and a poor outlook are adversely affecting manhours in Michigan. The

employment level is low and market share is steady. While all measures to assist contractors become

more competitive are available, they are insufficient to offset lower nonunion labor costs. A variety of

factors will make it difficult for contractors to thrive in the coming years. Lack of work will make it

more difficult if the economy reverses as the workforce has decreased.



In Northeastern Illinois manhours declined in 2004 and are expected to remain at the current level in

2005. Market share is high and steady. Labor-management cooperation has the potential for

exceeding its current level. A Joint Labor-Management Committee is promoting the industry through

scholarships and marketing. The local agreement permits Preapprentices. A new agreement was

negotiated in 2004 providing increases of about $2.50 each year. Mutual gains/interest bargaining

techniques were utilized with some initial success. Escalating wage and fringe benefit costs will

challenge contractors as nonunion competition continues to grow.



A healthier economy in 2005 is expected to reverse years of declining manhours in Colorado. Market

share has also declined and state prevailing wage work is important. Labor and management have

a very cooperative relationship and a Joint Labor-Management Committee has implemented a

number of programs. The local agreement includes many measures to assist contractors to be more

competitive, however the gap between union and nonunion wages and fringes has widened. The

health and welfare fund covers, but does not pay for early retirees. Contract negotiations are

scheduled in 2005. Local union membership has declined, but apprentice indentures rose in 2004.



                                                                                                     33
South-Southwest

The past year was one of weak performance in Houston with some rebound in manhours anticipated

in 2005. Improved market share is also expected. Relations with labor are very cooperative and a

Joint Labor-Management Committee is focusing on continuing education programs. All measures to

assist union contractors in being more competitive are included in the local agreement. Negotiations

this year resulted in a moderate settlement with a reopener in 2005. Mutual gains/interest bargaining

techniques facilitated negotiation of improved ratios and specialty addenda.



Increased area building has resulted in years of growing manhours in North Texas/Dallas. There is full

employment and a stable market share. Some measures are included in the local agreement to

make union contractors more competitive, but better ratios and greater flexibility are still needed.

There is a “maintenance of benefits” clause for health and welfare contributions which is capped at

$.50. Health and welfare contributions remained unchanged in 2004 with a PPO option adopted.

Random drug testing is widely required by area general contractors and owners and is permitted in

the contract.



The market has been fairly steady in San Antonio with some expansion expected in 2005. The union

segment has maintained its share of the work. Most measures to assist union contractors be more

competitive are included in the local agreement, but the wage package remains an impediment to

increasing volume. Health and welfare contributions remained unchanged in 2004. There will be

contract negotiations in 2005. The upturn in demand for labor at the Toyota plant will impact labor

supply.




34
Manhours have and will remain steady in New Mexico. After dropping significantly, market share has

stabilized. Relations between labor and management are very cooperative. The agreement contains

most measures to make union contractors more competitive. A new agreement was negotiated in

2004 for four years which resulted in annual increases of four percent. The area has a history of

successfully utilizing mutual gains/interest bargaining techniques. Health and welfare contributions

increased significantly and fringe costs will continue to be an important issue.



North

Manhours are up in Fox Valley, WI, but remain below levels of five years ago. Earlier market share

losses have stabilized. A Joint Labor-Management Committee is now being formed. More measures

to assist union contractors competitiveness exists in the labor agreement are needed. At normal

retirement age, retirees pay for their own health and welfare coverage. Illegal drug use is a minimal

problem as the contract includes a substantive drug testing policy which includes random testing.

Competing with nonunion is and will continue to be a serious problem. Contract negotiations are

scheduled in 2005.



Manhours in Madison have been flat for a number of years as has market share. There is strong

nonunion competition in a sluggish economy. Some measures are in the local agreement to make

union contractors more competitive, but there remains the need to give contractors more crew

flexibility. Contractors believe that the local union’s lack of recognition of nonunion sector growth has

impacted competitiveness. Increased grievance activity and concerns regarding fringe benefits will

continue to be important issues in 2005.




                                                                                                      35
Twin City manhours and market share have been little changed in recent years at an overall weak

level of activity. There is a very cooperative relationship between labor and management and a

Joint Labor-Management Committee has hired a full-time lobbyist. Some measures exist to make

union contractors more competitive, including residential rebates. The low level of activity has

increased friction between labor and management. Health and welfare contributions have

increased and plan benefits are down. A new contract will be negotiated in 2005.




36
                                        Western Region

Prospects are most positive in the West. Almost two-thirds of Chapters experienced higher manhours

in 2004 and an equal portion expect further improvements in 2005. Illegal drug/alcohol use is a most

serious problem, but all contracts included a substance abuse policy, most with random testing when

required by the owner.




Coastal

Manhours in San Diego have been weak in recent years, reflecting the local economy. There is full

employment and architectural sheet metal workers, especially, are in short supply. The percentage

of union work remains about the same. Work volume is strongly influenced by state prevailing wage

projects. Relations with labor are very cooperative and there is no Joint Labor-Management

Committee. Using sheet metal technicians and technician trainees to perform nearly any task they

are qualified to perform is a competitive benefit. Health and welfare maintenance of benefits is

achieved by reallocating wages to fund contributions. There are continuing challenges in meeting

open shop competition.



Very weak manhours in recent years in Oregon are anticipated to be partially reversed in 2005 as

weakness in the tech industries is offset by growth of medical projects. A Joint Labor-Management

Committee has promoted community activities and partnering. The health and welfare fund is being

actively managed in order to remain solvent. The contract will be renegotiated in 2005. The future

looks favorable with improved work opportunities and a more cooperative Labor – Management

relationship.




                                                                                                 37
Years of declining manhours in Western Washington ended in 2004 with some improvement

expected in 2005. Recently, market share has been steady, but remains below the level of five years

earlier. There is a very cooperative relationship with labor and a Joint Labor-Management

Committee. Most measures to assist contractors in being more competitive have been incorporated

in the local agreement. In 2004, a new five year contract was negotiated with annual increases close

to three to four percent. Health and welfare maintenance of benefits language caps unilateral

employer increase with excess shared equally with workers. Fringe cost control will continue to be a

challenge in the coming years.



Due to the local economy, Tri-Counties, CA has experienced strong growth in manhours in the last

five years. The majority of the increase was in 2004 and manhours are expected to remain at the

2004 level in 2005. There is full employment and union contractors performed a greater percentage

of work in 2004. Very cooperative relations with labor have resulted in a labor-management

committee and no grievances. Negotations in 2004 resulted in a five and a half year agreement with

a large first year settlement and subsequent increases declining from five percent. There was some

success in utilizing mutual gains/interest bargaining techniques. In the current environment labor rates

and labor availability are of concern.



Sacramento has experienced strong growth in manhours, which is expected to continue into 2005.

There is full employment and a steady market share. State prevailing wage work is very important. A

very cooperative relationship with labor as well as an active Joint Labor-Management Committee

have implemented promotional and training programs. Most measures to make union contractors

more competitive are available. Service sector work is increasing steadily and there remains room for

additional growth.



38
Manhours increased in 2004 in Bay Area, CA, but not enough to offset five year declines. Further

gains are anticipated in 2005. A stable percentage of sheet metal work is performed by union

contractors. Labor-management cooperation is high and a Joint Labor-Management Committee is

working on a joint marketing program with other outreach programs tied in. Most contract provisions

to promote competitiveness are available to contractors. The local agreement will be renegotiated

in 2005. The areas joint marketing and training programs are designed to create greater awareness

of professionalism of the job.



While manhours remain below five years earlier in Orange Empire, CA, a strong 2004 is expected to

be followed by further gains in 2005. State prevailing wage work is very important. Although labor-

management cooperation has the potential for improvement, a Joint Labor-Management

Committee is progressing on a number of programs, including drug testing. Most measures to make

union contractors more competitive are included in the local agreement, but there could be better

implementation.



A long upward trend in manhours is expected to continue in 2005 in Los Angeles reflecting the local

economy. There is full employment and very cooperative relations with labor. Although the local

agreement includes most measures to make union contractors more competitive, the wage

differential makes competitiveness difficult. Contractors consider illegal drug use a very serious

problem.     While most owners and general contractors require random drug testing, the

alcohol/substance abuse policy does not provide for random testing. Although many challenges

face the industry, they are being addressed by labor and management.




                                                                                                39
The local economy in British Columbia is resulting in increased manhours and cooperation with labor

is resulting in increased market share. An active Joint Labor-Management Committee has focused

on industry promotion projects. The local agreement contains most measures to make union

contractors more competitive with nonunion. The agreement will be renegotiated in 2005. In the next

few years assuring a supply of qualified manpower will be of concern.



Manhours in the Northern San Joaquin Valley, CA are down slightly compared to the previous year. It

is hoped that considerable redevelopment work underway and planned will result in more work.

Relations with labor continue to be positive, but the impact of the nonunion sector continues to be a

problem.



Central Valley, CA has experienced a considerable drop in manhours in the past year even with

some pockets of heavy construction. A comprehensive promotional campaign is being developed

jointly with the mechanical and electrical segments. It will stress quality, safety, on time completion

and competitive cost.


Inland

Gains in manhours in Southern Nevada in 2004 are expected to continue in 2005, but remain below

the level of five years earlier. There is full employment and a high and steady market share. Relations

with labor are very cooperative and a Joint Labor-Management Committee has implemented

programs in safety, public relations and training. The local agreement includes most measures to

assist contractors to be more competitive, including sector addenda. Even with an increased health

and welfare contribution, costs to workers increased. The industry will be faced with challenges in

dealing with nonunion and exploiting opportunities in non-traditional markets. Organizing activities

have had some success.


40
Utah has experienced a number of years of declining manhours. In the present economic

environment no upturn is expected in 2005. There is a high level of labor-management cooperation.

Even without a formal labor-management committee, meetings are held to deal with industry issues.

The local agreement permits Preapprentices and Classified Workers. A number of steps have been

taken to manage health and welfare costs, including increasing the hourly contribution rate.

Contractors will be challenged to achieve a competitive wage and benefit package in upcoming

negotiations.



A declining manhour trend is beginning to reverse in Arizona. There is strong nonunion competition

and low market share. Relations with labor are very cooperative and the local agreement contains

most measures to assist contractors in their competitive position. Adjustments to health and welfare

benefits have contained fringe benefit costs. The contract may be reopened in 2005 depending on

manhours. There is a comprehensive labor-management program to market the benefits of skilled

craft training.


Inland Northwest Washington experienced some upturn in manhours in 2004 with flat activity

expected in 2005. Union contractors are performing a smaller share of the work and there is

considerable additional capacity available. Most projects are in the public sector. There is the

potential for improved cooperation between labor and management. There are some measures in

the agreement to promote union competitiveness. A three year agreement was negotiated in 2004

with annual increase under $1.50. Retirees are covered by the health and welfare plan, if they pay

the cost. It is a very difficult area for union contractors to thrive.




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