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STREET SMARTS

Why the Union Can't Win

It's time for labor leaders to start thinking like business leaders.

Norm Brodsky is a veteran entrepreneur.

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I've been thinking a lot about rank-and-file union members lately, and I have to say it's a shame how the guys at the top have let them down. Union leaders must be the only people on the planet who haven't figured out that if you want to get anywhere today, you have to think and act like a businessperson. You have to market yourself. You have to make the case why someone should purchase your services. If what you want are jobs for union members, you need to treat employers like potential customers, not like adversaries you're going to force into submission. In a competitive economy, nobody buys because they're forced to. They buy because they want to. The notion of threatening a customer shouldn't even enter your mind.

These thoughts are prompted, of course, by my recent run-in with Ironworkers Local 361. As I mentioned last month, the problems began last July while I was on vacation. Our subcontractors had been working on the warehouse we were building down the block from my office in Brooklyn. On the Friday before I was due to come home, I got a call from Mike Coons, my construction foreman, who told me some union reps had come by, demanding to talk to someone in charge. They said they would start picketing the next day unless I contacted them that afternoon. I'm always willing to talk, so I dialed the number they'd left. I got a recording: "You have reached Local 361. No one is here to answer your call. Our summer hours are Monday through Thursday, 10 to 4."

Sure enough, the picket line went up the next morning, along with the giant inflatable rat that the union hauls around from site to site. "You're picketing without even talking to the guy?" Mike asked the leader of the group. "That's not fair."

"We couldn't find anyone to talk to," he said.

When Mike called me, I told him to inform the union people that I'd be happy to meet with them on Monday as long as they didn't do anything foolish beforehand. On Monday they put up the picket line again. I told Mike, "I'm not meeting with them. They're picketing unfairly. We can meet when they stop picketing for three days." On Wednesday, they pulled the pickets. We set up a meeting for the following Monday.

As loyal as I was to Walt -- the nonunion subcontractor I wrote about last month -- I went into the meeting with an open mind. I am not antiunion. Several of the other subcontractors I use are unionized. I pay more for their services than I would pay a nonunion subcontractor, but they cost me less in the long run because they show me better ways to do things. Macro Enterprises Ltd., for instance, does the piles for our buildings. Jeff Goodliffe, one of the owners, looked at our plans for the new warehouse and said, "This design is wrong. Let me talk to your engineer." He wound up saving me well into six figures. So what if he charged me 10% more than a nonunion subcontractor would have? He was worth every penny.

Unfortunately, not all union subcontractors measure up. I'd hired one to put up the steel framework of the first warehouse I built, and his poor performance had cost me more than $1.2 million. But eight years had passed since then, and I realized that things might have changed, and that I might want to consider hiring a union subcontractor to do the steel work on future warehouses. I was even willing to hire a couple of union guys to help out on the one I was building -- as a gesture of goodwill. It turned out, however, that goodwill was not the order of the day.

The head of the local and the business manager showed up at the appointed hour. We met in my office, joined by Mike and my nephew Andrew, whom I introduced as the next generation of Brodsky builders. I got straight to the point. I knew that the union guys had called my union subcontractors. "So you realize I'm not against unions," I said, "but I had a problem with the union sub I hired to do this work before." I told them the story.

The Local 361 business manager, Richard O'Kane, said, "We have a list of other guys we can suggest."

"Okay," I said. "I'll give them a fair shot. I'll sit down with them and talk about the next building. I do one every 18 months."

"That isn't good enough," O'Kane said. "We want to finish the building you're doing now."

"It's 75% finished," I said. "Besides, I have a contract with a guy already. I shook his hand and told him he had the job. You want me to tell him that my word is no good?"

"You do what you got to do," he said. "We have to get the rest of this job."

"If you threaten me, I promise you that no member of your local will work here for the next 60 years."

"Are you trying to threaten me?" I asked. "Let me tell you what a threat is. I have 10 more years of building left, and Andrew here has 50 after that. If you want to threaten me, I promise you that no member of your local will work here for the next 60 years. You don't want to push me to that."

"Like I said, you do what you got to do," he said. "We want this job."

I turned to Mike. "We're getting nowhere," I said. "Please escort these gentlemen out of the building."

So the battle was joined -- for no good reason. There was absolutely nothing that the union members could get out of picketing my work site other than maybe a few blisters and a good soaking when it rained. I can't imagine they were too happy about it. Mike and I tried to keep their spirits up. One morning, for example, we saw there were only three picketers and no rat. We called up the local and said, "This is a disgrace. Can't you guys even run a strike right?" Within an hour, the rat and 22 other picketers showed up.

They kept at it for three weeks, hauling the rat back every morning. Mike and I had our pictures taken with it and put up notices around the picketing site every evening, offering tips on how to run a picket line, things you can do while you're picketing, and so on. We even went online to get the salaries of the local's leaders -- the two top guys make about $150,000 each -- and posted them, too. The picketers usually tore the notices down when they arrived in the morning, but they left the salary list up and made sure everybody saw it.

That must have gotten somebody's goat. I can't see any other explanation for what followed. After three weeks of fruitless picketing, the union called off the picketers and had a truck drive around Brooklyn with a big sign displaying my name, an American flag, and some words that no one could read. Later, the sign was replaced by a new one, just as lavish, on which the message was printed in larger type. It said I was using out-of-state, nonunion workers because I don't care about people having health insurance and other nonsense.

None of that bothered me. Free publicity aside, the building was virtually finished by then. But what a waste of the union members' money. When you take into account the cost of the signs, the drivers' time, the use of the truck, and fuel, the local must have spent a couple of thousand dollars on this ridiculous stunt. And why? Because some union leader decided to take my little jabs at him personally.

Serious businesspeople don't make that mistake. We might do something peevish or vindictive, but we wouldn't spend a lot of someone else's money on it. Then again, serious businesspeople would have handled this whole deal differently.

They wouldn't have fought to get six or eight jobs on a project that was almost complete, thereby sacrificing a shot at all future projects, each of which would have been worth about $500,000 to a union subcontractor. Instead, they'd have said, "Mr. Brodsky, you know unionized companies do quality work. They cost a little more, but they're worth it. You had a problem with a subcontractor you used eight years ago? Part of it may have been that the subcontractor didn't know how to do this type of building back then. We have four companies that are great at it now. Here, let us show you some slides of what they've done. If you hire one of them, we'll make sure you get your money's worth. Plus, you'll be supporting local people and building your local reputation. We don't have to tell you that a great reputation is the most important asset a business can have."

Had the union guys said something like this, I would have listened. I wouldn't have kicked Walt off the job, but I would have had to think seriously about hiring a union subcontractor the next time. I'd also have come away with more respect for the union. I would have thought, "These guys are sharp. They bring something to the party I hadn't considered."

Instead, we got the same old song. I guess the tune won't change until the union members themselves decide to do something about it.

Norm Brodsky is a veteran entrepreneur whose six businesses include a three-time Inc. 500 company. His co-author is editor-at-large Bo Burlingham.

Last updated: Mar 1, 2005

Street Smarts columnist and senior contributing editor NORM BRODSKY is a veteran entrepreneur who has founded and grown six businesses.
@NormBrodsky




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