Monday, June 11, 2012

Cuomo's Tappan Zee Plan Triggers Union Backlash

Governor Cuomo's proposal for a new Tappan Zee Bridge, already criticized for its fuzzy funding plan and lack of mass transit, now has another problem: a rift with organized labor that threatens to throw the project into turmoil. Union leaders say members would lose $40 million in wages and benefits if the state relocates rebar work for the $6 billion Tappan Zee Bridge replacement.

Construction trades councils in Rockland and Westchester counties last week overwhelmingly voted down a project labor agreement, or PLA, proposed for the new bridge that would've eased union wage and work rules. The Cuomo administration's insistence on shifting much of the work away from Metallic Lathers and Reinforcing Ironworkers Local 46 prompted rejections by 30 of the 36 trades that voted.

The state wants to cut, bend and fabricate the reinforcing steel for the project off site, possibly upstate, instead of on or near the bridge. It's not exactly clear why, but one possibility is that it would create jobs upstate and help the governor sell the project in sections of New York that might otherwise be skeptical of such a large downstate expenditure. It could also mean a big payday for an upstate company, or a federally defined "disadvantaged business" that could be created there to do the work.

The state's move could also lower costs, though it's not clear by how much. Local 46 recently reopened its contract and agreed to cut wages and benefits by 15% on private projects and offered the same deal for the Tappan Zee. Even with the discount, the labor in a place like, say, Buffalo would could cost about $25 an hour less, though shipping the material nearly 400 miles to the bridge site would add an expense.

Also, if the union cuts its rates on the Tappan Zee, it would establish a new, lower prevailing wage that would save money on other public projects.

A push by business groups for any off site jobs not to pay prevailing wages is also possible. A letter to Mr. Cuomo last month by a statewide business coalition opposed extending prevailing wage to public works where materials are fabricated off site. It did not specifically mention the Tappan Zee project.

Local 46, whose jurisdiction includes New York City, has been a perennial target of major construction managers, who argue that its contracts protect an outdated business model. Labor sources believe some of those contractors may be pressuring the Cuomo administration to use the Tappan Zee to help establish a new standard.
The administration could also attribute an off site work plan to the Federal Highway Administration's insistence that no provision in the PLA may restrict competition. Other federal projects along Interstate 287 have included protections for Local 46 members, but they have not been as large as the Tappan Zee.

In a letter to Sen. Charles Schumer, Local 46 Business Manager Terrence Moore wrote that carving his members out of the cutting, bending and fabricating of rebar for the bridge would deprive them of more than $40 million in wages and benefits.
"It would be suicide for our local to support a PLA that deprived our members of much of the work that they should be doing in connection with this project," he wrote.

Last week, Mr. Moore gave a 50-minute speech before the vote by the Rockland County Building & Construction Trades Council and the Building and Construction Trades Council of Westchester and Putnam, swaying other unions to his side.

It's not clear how much the lack of a labor deal will affect or delay the project. Questions about whether the state is circumventing the competitive bidding process could also lead to legal challenges.