Wednesday, June 20, 2012

Labor Deal Reached For $6 Billion Tappan Zee Project

An agreement with labor unions paves the way for Governor Cuomo's signature capital project, a new Tappan Zee Bridge costing $6 billion. The PLA reached with 14 labor organizations calls contains a no-strike pledge and includes $452 million in savings for the state, achieved via work-rule changes. Key provisions include a straight 40-hour work week, flexible scheduling, more apprentices allowed on the job; and standardized holidays.

The Cuomo administration has reached a deal with building trades unions that could save the state nearly half a billion dollars on its ambitious Tappan Zee Bridge project and guarantees that labor disruptions won't mar the construction.

The project labor agreement, or PLA, was approved after twice failing to gain the favor of the unions.

Labor leaders had opposed a state plan to cut, bend and fabricate the reinforcing steel for the bridge in an offsite factory instead of having the Metallic Lathers and Reinforcing Ironworkers Local 46 do the work on or near the bridge. The union feared the original state plan would deprive its members of $40 million in wages and benefits.

"Replacing the Tappan Zee Bridge represents one of the largest public infrastructure projects in the nation, and the agreement reached today will allow thousands of New York's working men and women to secure good jobs building a new, safer bridge," Mr. Cuomo said in a statement.

In addition to a no-strike pledge, the deal reached with 14 labor organizations includes $452 million in savings for the state, achieved via work-rule changes and other means. Local 46 gave the state the same 15% wage and benefit reduction it offered earlier this year in its private contracts.

Key provisions in the deal include a straight 40-hour work week, including flexible scheduling; more apprentices allowed on the job; and standardized holidays.

"I'm very happy the governor's office worked with the union to get the best possible deal for the taxpayers," said Terrence Moore, Local 46's business manager.

Howard Milstein, chairman of the New York State Thruway Authority, which has jurisdiction over the project, said the deal was good for both taxpayers and workers. "It ensures that we will have reliable, local labor for the duration of the construction project," he said.

Earlier this month, construction trades councils in Rockland and Westchester counties overwhelmingly voted down the PLA. But the Cuomo administration reversed course on moving work traditionally done by Local 46 upstate, paving the way for a deal.

It's not clear why the state pushed for the off-site rebar work, but one possibility is that it would have created jobs upstate and helped the governor sell the $6 billion project in sections of New York that might otherwise be skeptical of such a large downstate expenditure.

The move could have also lowered costs. The wages could have been significantly lower if the off-site jobs did not pay prevailing wages. 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 have pressed the Cuomo administration to use the Tappan Zee to help establish a new standard.

But after the councils voted the PLA down in early June, the Cuomo administration faced the possibility that labor turmoil could have disrupted its signature economic development initiative. It still needs to figure out how to finance the project, but at least one potential headache has now been alleviated.