Simply doing the right thing for employees is the reason remodelers like Neil Kelly Co., in Portland, Ore., and Roeser Construction, in Kirkwood, Mo., have been using union labor from the get-go, but the companies benefit, too. “We thought it was the best way to go for employees as well as for ourselves,” Cindy Roeser says. Her husband, Joe, had been a union carpenter before they started the company in 1985, she says, so using union carpenters was a given. Similarly, Neil Kelly Co. founder Neil Kelly was instrumental in starting the carpenters union in Portland, says Monty Moore, vice president of production.
“The really great thing is you have an unlimited pool of trained labor,” says Tom Riggs, president of Riggs Construction and Design in St. Louis, referring to the apprentices who are available. “You're getting a young man who wants to be a union carpenter, and he doesn't cost very much.” Apprentices start out earning half of a journeyman's wage, then get a raise of 5% every six months. “If you have the right mix of apprentices, project managers, and journeymen, you can pay less for labor,” Riggs says.
He receives framing subcontracting jobs from other remodelers because they know “we can do it more efficiently and at less cost than their own guys.” The union refers a few jobs to Riggs every year when people ask for a union shop. Riggs employs about a dozen carpenters. Four of its five project managers started out as apprentice carpenters.
Union training goes beyond technical skills. “It's a big plus that they're trained on safety. Our workers' comp [rate] is one of the lowest in our peer review group. I think it's the result of the training,” Roeser says.
The quality of its union carpenters plus the ability to control its schedule has sold Walsh Construction in Portland, Ore., on using union labor. “Union carpenters and painters form a great core of talent, particularly in the high-end finishes. They're exceptional craftsmen,” general manager Andrew Beyer says. “And we know what our rates are and can get a project done on schedule.”
Neil Kelly Co. counts on the stability of its 40 union carpenters to accomplish its business plan, Moore says. “We pretty much know what labor costs will be and how to plan work without upsetting the business model.”
Another benefit to using union labor is less sweat over dealing with the thicket of health insurance and pension plans. “This has really become more important with the rising cost of health insurance. The union takes that out of the equation,” says Steve Scheipeter, president of S.W. Scheipeter Construction in St. Louis. Not dealing with negotiating and other administrative details of insurance and pension plans is “a big deal,” Scheipeter says.
Cost of Benefits Because unions mandate what health insurance and pension costs will be, “we don't have as much control over the benefit side of cost as in the rest of our business,” says Andrew Beyer, general manager for Walsh Construction.
And while Steve Scheipeter of S.W. Scheipeter Construction says he can't compete with one- and two-man shops, “in general, being union doesn't harm us with the bigger projects.”
Cindy Roeser of Roeser Construction takes a long-term view of the admittedly higher cost of being a union shop. “We probably make less as a company than a non-union [remodeler],” she says. “The benefits outweigh it. [Our workers] have to support families. That keeps them in the trades. If people don't have the salaries to support families, they'll quit going into trades.”
