I’m sure you’ve seen the commercials; they’ve been everywhere. “May the best car win,” advertisements proclaim followed by comparisons with competing brands. “Our car is better than the competition and it costs less,” is the message GM is sending.
While I applaud GM for its willingness to compete, it is also a bit surprising given the fact that the Company is a proud union shop. Their willingness to compete and be judged on a level playing field is surprising, especially when one considers how unions in California operate.
California unions go to great lengths to prevent competition. Their approach is to eliminate competition, have a monopoly, and hope nobody holds them accountable. A perfect illustration can be found in local public works projects. For decades, unions have promoted so-called Project Labor Agreements (PLAs) for public works projects and major private developments.
These agreements are nothing more than political payoffs that prevent licensed and qualified businesses from even having the chance to compete for the opportunity to build a road, park, senior center or power plant. It makes no difference if the company can deliver the best quality for the lowest cost. The PLA is designed only to make sure that union-only contractors get the business.
Proponents of PLAs claim that the agreements are needed to prevent strikes and assure a quality labor supply. They also claim that the agreements deliver accountability to state labor requirements. These arguments are nothing more than rhetorical Swiss cheese. One need only look to the City of Milpitas to see that PLAs don’t deliver on their promises.
The City of Milpitas entered into a PLA for the construction of its $39 million library project. City officials boasted of the benefits associated with the PLA in a letter to the union. They didn’t count on a third party conducting an independent audit of the project to see if the PLA ensured compliance with California labor compliance laws.
Associated Builders and Contractors, California Cooperation Committee through its Taxpayer Protection Project, conducted an independent labor compliance audit and identified a whopping 56 separate potential violations. These findings were submitted to the State of California Department of Industrial Relations for review and action.
When the state concluded its review of the audit findings, eight contractors were officially notified that they violated state labor laws during the library construction. Confirmed violations included failure to request apprentices, lack of proper ratios of journeymen to apprentices and improper use of apprentices. These infractions are significant as they could have contributed to project quality and worker safety issues. Furthermore, many contractors working on the project failed to provide records as required by law until after the audit and subsequent state inquiry.
Clearly, PLAs don’t deliver for local governments or taxpayers. They’re nothing more than special interest giveaways that eliminate competition. And that is the real goal behind PLAs…eliminating competition from licensed and qualified businesses.
So here’s where we tie this back into General Motors. The company is standing up and willing to compete on a level playing field to rebuild their business. Given Toyota’s recent struggles, it sure seems GM has a great opportunity should they be successful at producing quality cars at quality prices. And, frankly, I hope they succeed, because they will have set a precedent that destroys arguments for discriminatory contracting policies. If GM can build the best car at the best price, then they should be rewarded with loyal customers. The same goes for all taxpayer funded public works projects. General Motors could set the precedent that once and for all ends the PLA debate.
In the meantime, trade associations representing construction businesses are taking the PLA fight to the unions. In Orange County earlier this year, the Board of Supervisors unanimously voted to ban PLAs. PublicCEO.com awarded this action as its 2009 “Ordinance of the Year.” Next June, in Oceanside and Chula Vista, voters will have the chance to ensure that public works projects are awarded based on quality and cost, without PLAs. These efforts are being undertaken by civic, business and community leaders that want all businesses to have opportunity to create jobs and help people prosper.
In the coming months, the debate on PLAs will only escalate. Californians can no longer afford to deliver political payoffs in return for fewer services. And when the unions complain, we’ll point to General Motors and say, “If it’s good enough for the United Auto Workers, it’s good enough for you…may the best bid win.”
Kevin D. Korenthal is Executive Director of the Associated Builders and Contractors, California Cooperation Committee. He can be reached at email@example.com.